Entrepreneurs who actively seek funding for their business ideas usually memorize and practice their elevator pitches in advance. There are numerous platforms and events where such pitches are made to an audience of possible investors. For instance, startup incubator programs may finish with a demo day event during which a founding member of the team, typically the CEO, delivers the company's pitch.
Elevator pitches may be utilized as a type of competition at some events, with speakers competing for prizes that can help them advance their ideas. This may include providing small amounts of financing or company services, as well as coaching by business veterans. Regardless of whether they win, the opportunity to present their ideas to an audience of angel investors, venture capitalists, and other potential investors can be viewed as a substantial benefit of the pitch.
Startup Elevator Pitch
The concept of an "elevator pitch" is straightforward. Assume you're commuting in an elevator with prospective investors. You just have a few seconds to sell your brilliant concept. What would you say about the time it takes to ride a 30-second elevator? Let us examine it in greater depth.
What is an Elevator Pitch?
The term "elevator pitch" is slang for a brief speech outlining a product, service, or initiative concept. The term "elevator speech" refers to the idea that the speech should be made during the brief duration of an elevator trip. A decent rule of thumb is that an elevator pitch should last no more than 30 seconds and no longer than 60 seconds.
An elevator pitch is a term used in the financial industry to describe an entrepreneur's attempt to persuade a venture capitalist that a business idea is worth investing in. In most cases, a great pitch will stimulate an investor's interest and pave the way for a follow-up meeting. During this meeting, the entrepreneur will make a more formal presentation to the investor with the aim of raising seed financing.
Venture capitalists evaluate the quality of an elevator pitch to determine whether to proceed to the next step of potentially investing in a startup. Additionally, project managers, salespeople, and job seekers use the pitch for advertising themselves or their ideas. Being a startup, your elevator pitch should include an explanation of why your product, idea, or project is worth investing in, including features, benefits, and cost savings.
Importance of an Elevator Pitch in Startups
The key point to remember about an elevator pitch is that its objective is not to detail every detail of your business plan. Rather than that, its purpose is to build interest in your company, product, or service in order to facilitate the connection, following interest, and, hopefully, the future meeting during which you can discuss your business in greater depth.
To help facilitate the next meeting, you should communicate the market opportunity, as well as what makes your organization unique and different, as clearly as feasible. The ideal situation is to persuade someone in a single line or two that what you're doing is important and that your organization is well-positioned to capitalize on this opportunity.
How to Write a Perfect Elevator Pitch?
Your pitch can be thought of as an executive summary that summarizes your company and explains why you will succeed. It describes a concept, product, or company. However, we'll be focused on the company/startup version of this.
So, with all the needed information, your pitch should be enough to spark an investor's interest. An elevator pitch can be a speech (preferably 60 seconds or less), a pitch presentation, or a one-page description of your firm.
Tips to prepare an elevator pitch for your startup
Whether you're looking to seek money for your firm from angel investors or venture capitalists or simply want to improve your business plan, a strong elevator presentation is essential for success. The following are some strategies for writing your pitch.
Start with the question: "Ask yourself if you are better off now than you were four years ago," Ronald Reagan famously stated. This neatly summarized the campaign's central message.
Steve Jobs is renowned for his superior presenting skills and for delivering one of the best elevator pitches. While urging John Sculley to leave Pepsi Co. for Apple Inc., Steve Jobs questioned, "Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?" - So always ask and question before you even start.
State the problem: The essential first step is to identify an issue worth tackling. If your product or service does not address a need identified by potential customers, you lack a sustainable business model. Reduce the complexity of your customer's problem to its simplest form. In an ideal world, you should be able to summarize the problem you're tackling in one or two phrases or possibly in a few bullet points. While your business may eventually handle several consumer problems, you will be more successful if you initially focus on a single core problem and state it in your speech.
Define the solution you provide: The benefit to the listener must be compelling. Why should the individual care about what you do? Concentrate on the listener and the benefit that your proposition provides to him or her. Inform them of the product or service you want to deliver to the client. Be specific about the outcomes and solutions the individual can anticipate, but avoid selling to them.
Know your market: The target market section of your elevator pitch is where you'll identify precisely who has the problem you're solving and how many potential clients you'll be attempting to sell to. You should attempt to segment your target market—the smaller groups of people to whom you intend to market. While it's natural to want to define your target market as broadly as possible, this does not make for a compelling proposal. After you've developed a solid list of target market segments, you'll need to conduct some market research and estimation to determine the population size of each category.
Explain competitors: Every enterprise faces competition. Even if no one else has proposed a solution similar to yours, your potential clients are resolving their problems in some other way. Defining your main differentiators from your competitors is an excellent activity that guarantees you are developing a unique solution that clients will likely choose over other options. Additionally, these differentiators will assist you in focusing your marketing efforts on the critical value proposition that you provide, and your competitors do not.
Describe your team: Even though your idea is fantastic, only the appropriate team will be able to execute it effectively and develop a great company. In the "team" section of your elevator pitch, you should explain why you and your business partners are the ideal teams to carry out your vision and why your team's skill set is exactly what your firm needs to succeed. People frequently assert that the leadership team of a business is more crucial than the idea—and this is frequently accurate. No matter how innovative or unusual your solution is, without the proper people on board, you will be unable to see it through to completion.
Your financial summary: A strong pitch does not require a detailed five-year financial outlook. What is necessary is that you comprehend your business concept. While the term "business model" may sound complicated, it is not. You'll want to ensure that your assumptions allow you to develop a lucrative business. However, you will not be required to offer a thorough forecast in your elevator pitch. You should absolutely have a prediction created so that you can discuss the numbers with possible investors who are interested in knowing more about your firm.
Make a good presentation: Not only the content of the pitch but also the presenter's whole presentation and personality have an effect on how people react to pitches. This is a private exchange, and it should feel natural. It should not sound overly scripted. The pitch should be conversational and give audience members room to ask questions and express their perspectives.
Things to Avoid While Writing Your Startup Elevator Pitch
Avoid rambling or providing excessive information. Bear in mind that a successful elevator pitch is brief.
Avoid using jargon and technical terms. A good pitch is straightforward enough for anyone to comprehend.
Don't give away too much. Provide key information, but say just enough to engage your audience's interest.
Avoid sounding stiff or overly rehearsed. A successful pitch demands strong communication abilities.
Avoid becoming overbearing. Nobody likes feeling pressed or as though they are dealing with an aggressive sales representative.
Writing the perfect elevator pitch needs passion and an understanding of the art and science of this small but vital component of any fundraising campaign or business start-up idea. Although there are no hard and fast rules for a good pitch, you must grasp the fundamental need, outcome, and outcomes you need from the interaction.
While following successful companies and start-up founders' pitch deck examples are a wonderful idea, use them simply to gain inspiration and understanding about how the pitch should sound. There are no "correct" or "incorrect" elevator pitches. It all relies on your ability to differentiate your service and capture the potential investor's attention.