“A great elevator pitch can be the one thing that launches your startup business from vague garage-based business to a fully-funded market-busting mac”. – Bianca Male
Picture this scenario: You visited a friend’s office and as you enter the building’s elevator, you recognize an African entrepreneur and billionaire, Tony Elumelu. Here you are with a fantastic business idea to share with him and you’ll like to get financial support from him. What will you say?
In order for you to raise capital for your small business, you as a business owner must get comfortable with making elevator pitches even at a spot.
Simply put, an elevator pitch is a short speech in a space of 20-30 seconds that serves to persuade someone to take an action.
When done correctly, elevator pitches stimulate investors and convince them to give up a business card, schedule a more detailed meeting, or if you’re really good, demand to put capital into the business right there on the spot.
It’s a treasurable few minutes where you have the complete attention of your dream investor, and he or she is interested in hearing about your business.
So you may want to perfect it before you run into any of them.
Unfortunately, the elevator pitch always presents a few hitches that bring down many entrepreneurs when they need arises.
Generally, for an investor to listen to you. You must grab his or her attention with a compelling hook.
It is advisable to make it humorous, captivating, shocking — whatever the kind or type of business, just ensure there’s no loss end and a proper transition to what your company’s doing.
Do not screw it up! For this to happen, there are a few principles to follow in order to create a content-rich, compelling, and persuasive elevator pitch.
Let’s dive right in…
1. Keep It Short
First and foremost, the most significant aspect of an elevator pitch is obvious – keep it short.
Remember that seeing every aspect and details of your business idea which you consider to be captivating, does not mean that your potential investors will.
You should take time to carefully scrutinize every component of your elevator pitch. Evaluate to ensure it is really helping you to make your case.
Not every pitch is going to happen in a time-pressured atmosphere, but people with money tend to be busy so think short.
It is advisable that you have different versions of your elevator pitch If possible – one around 30 seconds, 60 seconds, and a more detailed but still lean, not exceeding one and a half minutes.
You can then weigh options to see which one you have time for.
2. Distinguish your Business
Investors are always impressed by business owners who know their onions (exactly what the business does), who the business serves, and most importantly, why it is the best business of its kind.
Again, it’s important to be as specific here. And, whatever you do, be assertive in your proposal (you must walk the fine line between confidence and arrogance, but no one has ever gotten anything by playing down their skills).
Ensure you sell yourself and business to the fullest degree possible. “I think I’m good at helping people with their maths lessons” is just not going to grab an investor’s attention.
Compare it to something like this below:
“We offer the most customized math tutoring available for high school students in danger of not being able to graduate.
We take the all-inclusive student – his or her personality, interests and emotional needs – into account when designing a comprehensive tutoring program.”
3. Mention Your Track Record and Proof of Future Demand
Considering best case scenario, your business is prospering and you have some money forming at your doorstep which also has huge potential for more growth – if only you had the capital to expand.
In reality, would-be entrepreneurs and new small business owners often lack tangible sales to refer to.
The good news is this: a lack of assurance of this kind is the price that investors pay for trading with this sort of investment.
If they wanted to invest in a 100% sure-fire, well-proven business with proven full-proof year-on-year growth, they would look to the stock markets.
In truth, the risk is part of the game when investing in small businesses, and your job is to sell people your dream as much as related numbers.
That being said, serious investors will reply well to tangible proof points about the current success of your business – or the proven claim for your product.
As such, your elevator pitch should include at least one clear realistic statement that backs up your potential.
Examples include a deep-rooted, strong growth statistics, unbelievable operating margins, or even something as apparently unrelated as a huge online following for your food/fashion blog.
In continuation of the math tutoring example stated above, imagine that this business doesn’t exist yet but the tutor in the example has a popular online blog that caters for educational things in his vicinity.
His pitch could be something like this:
“My business offers the most customized math tutoring available for high school students in a threat of not being able to graduate.
We consider a broad student – his or her character, interests and emotional needs – into account when designing a comprehensive tutoring program.
I am assured of demand for this service because I run a popular local blog on educational outings for children and I have over 5,000 visits per month with a mailing list of over 19,000 parents.
I emailed my list about my business idea and secured a $70 deposit from over 500 parents who wanted to reserve a place for their child.”
Note: If you have prior experience in the field, or have previously set up successful businesses, you definitely want to include that here too.
4. Be Specific
Investors will definitely be turned off by ambiguous requests for “a lot of capital” or “some money to build my business with.”
These generalizations suggest that the business owner has not done his or her research well enough.
If you have ever watched Shark Tank, you’ll see that investors want an exact number and they want that number to be clearly tied to a specific, tangible purpose.
Again, compare “I’d like some money to please” with the below statement:
“My business offers the most customized math tutoring available for high school students in threat of not being able to graduate.
We consider a broad student – his or her character, interests and emotional needs – into account when designing a full tutoring program.
I am assured regarding the demand for my service because I run an educational blog which is very popular with children and the blog attracts an average of 5,000 monthly visits.
Also, I have an email list of over 19,000 parents.
I did an email and emailed it my list about my business idea and secured a $70 deposit from over 500 parents who have already reserve a place for their child.
Am committed to raising $100,000 for physical premises, permits, staffing and the necessary equipment needed.”
Note: There is some variance about whether or not to embrace this kind of clear request for financing while presenting your elevator pitch.
As the old fundraising adage goes, “Ask for money and you get advice; ask for advice and you get money”.
After all, said and done, you’ll need to see out each investor – and each state – on a case-by-case basis.
Some investors will react well to this kind of straight approach and you’ll disqualify a great many investors for whom the number of facts is off-putting,
so there is a certain benefit to this kind of “blunt” approach.
5. Why the Investor?
another key element to note is that your elevator pitch is not just about you.
It’s about getting the investor to say yes and feel good, that will lead to an investment in your business.
Educate them to know why they would be a perfect fit for your business – why it is that “out of the all the elevators, in all the world, you’re so glad you walked into this one”.
In reality, this insight often comes down to research.
Make sure to thoroughly research the landscape of investors who may be right for your business.
Often this won’t be as daunting a task as you may think. The number of capable investors in Nigeria who support new quick-service businesses is smaller than you may even think.
What’s new, these consortiums can be astonishingly tight-knit, so with the right people-focused approach to fundraising, you should be able to inform yourself as soon as possible.
6. The Call-To-Action (CTA)
As any marketer knows, all the content in the world is worth next to nothing if you don’t follow with a clear call to action.
You need to tell your investor what action you’re looking for him to take.
“I’ll like to send you an email with the details of my business plan” or “I’d love to schedule a meeting with you to speak with you in more detail about my business plans”.
The right CTA will always do the magic, again, situation-dependent, so think carefully through the best next step and ensure to have a plan ready.
Here’s the full elevator pitch for our math’s tutor friend:
“My business offers the most customized math tutoring available for high school student who faced the danger of not being able to graduate.
We take the entire student – his or her character, interests and emotional needs – into account when designing a comprehensive tutoring program.
This has given me the confidence that the service will be in demand because I run a very popular educational blog for children and I have over 5,000 monthly visits and a mailing list of over 18,000 parents based locally.
I write an email to my list about my business idea and secured a $70 deposit from over 500 parents who wanted to reserve a place for their child.
I’m committed to raising $100,000 for commercial sites, licenses, enlistment and the necessary equipment to aid daily activities.
Given your track record in this kind of service business, I will like to get your advice and support. Would you be free for a launch date at some point within the week?”
Note, your elevator pitch does not necessarily have to cover everything. Just do enough to secure further interest.
There are quite a million questions that any investor will have your answer before they’ll consider any investment – and you’ll have to answer them all.
- how and when do you propose to provide a sufficient return on investment?
- What financial statements do you have available?
- Who else is investing/has invested?
The good news is that if you’re hearing these questions, it’s because you’ve made it over the first hurdle – you piqued their interest.
Thank you for reading to this point. I believe it was a valuable read.
KIndly share it to help someone out there. Thank you!