Cut the Bullsh*t & Get to the Point: How to Turn Your Winning Pitch into an Effective Online Raise
Mr. Wonderful here –
Look, I’ve sat through thousands of pitches. Don’t believe me? This year, Shark Tank is going in its 15th season. Add to that the countless investment ideas I’ve heard for my own portfolio and the now 50 companies I’ve judged in StartEngine’s Quarterly Pitch Comp, and you get a sense of what I’m talking about.
Every company that gets funding from me does the same three things – not some of the time, all of the time. They articulate the opportunity in 90 seconds or less. They explain what’s so special about their team that can take this idea and execute on it. And finally, they know their numbers.
What’s true for your pitch is true for your online raise.
I’ve been preaching the three key elements of a startup pitch for years now because I believe in entrepreneurs and I want to see them succeed. So when I go onto equity crowdfunding sites like StartEngine, and I read offering pages that feel more like a bad novel than a tight pitch, it kills me inside. Odds are those founders will struggle to eek out even a modest sum – they certainly wouldn’t get a cent of my money.
So how can you take your startup pitch and turn it into an effective online raise? Never fear – as usual, your rich Uncle Kevin is here to explain.
1) You have three sentences to grab my attention.
Think 90 seconds is a short amount of time? Online, you need to explain the opportunity even faster. You don’t have the luxury of a captive audience here, so you need to do in the first three sentences – or less – what you normally would in the first minute-and-a-half of a pitch:
- What do you do?
- Why does it work?
- Why is it such a huge opportunity?
Every founder’s first, second, and third job is sales. So if you can’t clearly explain the opportunity to me, as your future investor, how can I trust that you’ll explain it to customers? That means keep it short, cut the jargon, and put it in words a layperson can understand.
2) Tell me your relevant experience, not your entire CV.
Investors need to know what’s so special about you that you’re the person or team to execute on this opportunity – and that they shouldn’t look for someone else to do the job instead.
- Do you already have experience in this space?
- Have you tried a similar venture before?
- Show us that you have what it takes to persevere and go the distance.
If you have a personal connection to your product or service, now’s the time to share it. That tells me as the investor that you’re motivated and you won’t jump ship at the first roadblock. What I don’t want is a list of every job you and your team have ever held – to me that says you’re unfocused and you don’t know where to pour the gas.
3) Don’t make me hunt for your numbers.
In a pitch, when it comes time to get down to brass tacks and I ask a founder for their CAC/LTV ratio, gross margins, best acquisition channels, CAGR, you name it – I’m not looking for their life-story. Neither are prospective investors reading at your online raise.
Yes, there’s a time and place to share your story (as it relates to the business) – but remember this isn’t your e-commerce store, it’s an investment opportunity. So you should make it easy for me as the investor to understand the performance of your company. A simple way to do this: use bullets, put the numbers up front, and again, keep it short.
Still pre-revenue? That’s fine. Startup investors like me are looking for early stage businesses, but we still want to know the numbers. How many patents / years under development? What are the margins like for similar businesses? How big is the market?
If a founder can’t tell me their numbers, I make it a point to put them in hell in perpetuity – and smart investors will too. So don’t bury the numbers under paragraphs of text online, or your funding round is going to suffer.
Let’s just look at an example, shall we?
We believe the nexus of our expert team, paradigm-shifting IP, and omni-channel distribution strategy will make us the ultimate disruptors and ultimately lead to a CAGR of 200% over five years.
As far as I’m concerned someone should take this jargon-filled turd of a sentence behind the barn and shoot it. Here’s how you can say what I actually want to know as an investor:
- 20+ years – the combined experience of our team in the field
- 8 patents filed – and 4 more pending – protect our IP
- 10+ nationwide retailers – have agreed to distribute our product
- 200% – our projected CAGR over the next five years
No one said funding a startup is easy.
Starting as a young buckaroo businessman launching Softkey, I’ve been through the mill dozens of times. Trust me, I know it’s not easy to secure funding. My advice? Lean on the experts – folks like the team at StartEngine. All they do is think about the best ways to raise capital from the crowd and how to do it compliantly (not a simple feat). In the long run – when you’re, say, sitting on a giant pile of cash – you’ll be glad you followed their lead.
Kevin O’Leary is a paid spokesperson for StartEngine. View the details here.