It’s often said that if you can define your idea and communicate it in a few short sentences, that idea is well-worth pursuing and developing further. Whether you aim to find an investor or a co-financier for your startup idea, writing an attractive elevator pitch can often make or break your initiative. According to Small Biz Genius, around 9% of startup businesses close each year, while only 8% are opened in contrast, with only 6% of US based startups which believe that organic growth will ensure their long-term funding.
Developing a viable elevator pitch and approaching potential investors, B2B partners and financiers is a great way to truly test your idea’s possibility of coming to fruition. Without it, your startup may be in financial trouble since no investor will know what exactly makes your brand different than a multitude of others in need of monetary aid. With that out of the way, let’s take a look at what makes elevator pitches so special in terms of fundraising and how you can create your own pitch in a successful manner right now.
Elevator Pitches and their Importance
So, what is an elevator pitch and why should you care about it as a startup CEO? Elevator pitches are defined as short spoken presentations in regards to your future business. Their aim is to help you deliver your ideas, goals, bottlenecks and requirements in a short time span – or during an elevator ride, if you will.
Anthony Brook, HR Specialist at Pick the Writer spoke on the matter recently: “I believe elevator pitches are more uniquely suited for business presentations due to their to-the-point nature. If you need a double-digit amount of slides in order to communicate your ideas across to potential backers, you should reevaluate your ideas’ viability.” According to Tech Jury, one third of startups in the US started with less than $5,000 in 2018, while about 90% of startups fail outright for numerous reasons such as mismanagement, lack of financial resources, lack of clear goals, etc.
It’s easy to see why elevator pitches are so popular in the startup market – after all, you may sometimes only have 60 seconds of time to present an idea before a lucrative financier has a cab to catch or a phone call to answer. As such, elevator pitches are important and advantageous to both you and people involved in your project for a number of reasons, including the following:
- Clearing up any noise and confusion in the startup idea
- Understand your own ideas to the fullest
- Ability to quickly and easily present your project to anyone
- Ability to share the startup idea on various online channels easily
- Turning abstract ideas into concrete plans with goals and requirements
Writing a Successful Startup Funding Elevator Pitch
- Find a Problem worth Solving
Now that we have a clearer understanding of what an elevator pitch can do for your startup’s funding, let’s dive into the “how” of the matter. Startups are generally created with a mission statement and long-term goals in mind. These are typically used to differentiate one startup from another and to allow clients and investors to identify with the brand more closely.
In the same vein, your startup’s elevator pitch should focus on a pressing problem present in local or global capacity. The problem you choose to focus on should be something you identify with personally since it will ensure that you are passionate enough about its solution to create a startup dedicated to its elimination. Anything from specialized software development to cloud-based services can be the focal point of your startup as long as you and your team agree that it is something you want to fight for in the foreseeable future.
- Define the Target Market
When writing an elevator pitch, you should always place yourself in the shoes of your potential financial backers. Once you present them with your initial idea, the question that will inevitably pop up will be in regards to the target market. Even the noblest of causes still needs financial stability and sustainability in order for the business to stay afloat. That’s why one of the most essential parts of business development is to define your target audience to avoid problems down the line.
“Who is your startup’s portfolio meant to target?” The question is simple yet difficult to answer, since the majority of your long-term finances will have to come from successful contracts and sales once the startup is up and running. Make sure that your initial idea has a concrete user, a client or someone who will benefit from your product or service.
- Audit the Competition
Whether you plan to create a startup in the IT sector, the HR or social engineering, there’s no doubt that competition will be a real challenge for your brand’s growth. In this regard, you should do a market audit before presenting your ideas to any potential backers. The reasons for this are twofold.
You will find out exactly who you are up against and what their portfolios look like in terms of products and services. Likewise, you will get a better idea of which financiers are already involved with your competitors and which ones might be interested in startup funding and are looking for potential candidates. Explore your target market carefully and gauge how much of a fight is in front of you should you go forward with your startup’s development as planned initially.
- Segment the Pitch into Milestones
Every good idea needs clearly defined steps of development in order to attract the funding it needs. You should be able to create a step-by-step development timeline for your elevator pitch in case anyone is interested in the minutia behind your startup.
Once you have a problem worth pursuing and a target audience which will be interested in your product or service, this shouldn’t be an issue. Assign deadlines to each step of your development timeline to further prove your case to potential funding backers in terms of your commitment to the idea.
- Introduce your Collaboration Team
Your elevator pitch should include a short segment on the people you will work with during your startup’s development. Anyone who you consider a part of your team, a cofounding partner or a mentor should be presented as such during your pitch to potential investors. This will ensure that you come off as prepared and will add a degree of certainty to your project in the eyes of backers.
It will also help you build an image of a team player and someone who respects the people they work with enough to include them in the elevator pitch. Don’t be afraid to introduce your coworkers and collaborators to funding partners and you will be one step closer to making your project come to life.
- Present the Financial Requirements
When it comes to brass tacks, your financiers will want to know how much you need, in what timespan and whether or not their commitment to your cause is a one-time or recurring deal. This is the trickiest part of the elevator pitch and should be left for the closing lines in order to ensure that your potential backers hear the full story beforehand. Try to come up with a realistic number when it comes to your funding requirements and whether or not you will need one or multiple financiers to launch your startup.
Financial backers should be informed on whether or not they are your sole supporters or whether you intend to seek help from multiple sources who will be listed equally in your documents. There is no way to sugarcoat the numbers required to help your startup get on its feet so you will undoubtedly come across financiers who are simply not ready to commit to your cause – and that’s okay. Make sure that you are prepared for an occasional “no” before you find the right people for your startup funding somewhere along the way.
- Ask for a Follow Up
Lastly, you should conclude your elevator pitch with a request for a follow up no matter how quick or detailed your conversation was. Follow ups are a great way to let the listener think about the information you’ve presented them with while also letting them sit on it for a day or two.
It’s good practice to prepare business cards with contact information and give them out to potential investors due to the nature of elevator pitches and their blink-and-you’ll-miss-it nature. Communication channels such as email and phone are always welcome and can be backed up by your LinkedIn profile or any other info you think is useful. Don’t wait for the investor to offer you a follow-up and take the initiative instead to increase your chances at landing a funding deal your startup needs.
While they may seem unprofessional or surface-level at first, elevator pitches are sometimes the only way to present your startup idea to potential financiers. Find creative ways to truncate your development idea into several short but informative sentences with concrete goals and requirements. Once you do, it will be far easier to find the right funding partners for your startup than it would be through other communication channels.
About the Author:
Estelle Liotard is a seasoned content writer and a blogger, with years of experience in different fields of marketing. She is a content editor at Trust My Paper and loves every second of it. Her passion is teaching people how to overcome digital marketing obstacles and help businesses communicate their messages to their customers.