If you plan on presenting your small business to angel investors or venture capitalists to get funding, you’ll need to create a good elevator pitch. An elevator pitch is a 3-minute verbal presentation that explains your business and your track record. A great elevator speech should be designed to sell your business to potential investors. By the end of a great pitch, angel investors and venture capitalists should have a good idea of whether or not they want to invest in your business.
The perfect elevator pitch will result in angel investors and venture capitalists wanting to see an executive summary or full business plan that further explains your business idea. In this blog I describe the key components of an effective elevator pitch. I give you 5 tips to creating an effective elevator pitch that will get your business funded. By the time you are done reading, you will know how to create the perfect pitch for a potential investor.
Tip #1 – Explain What You’re Doing
Immediately explain what industry the business operates in and what products or services the business sells. Angel investors and venture capitalists need to quickly understand what you are doing to determine if it’s something they have an interest in. How well you explain what you are doing (and why you are doing) is a key factor in successfully persuading potential investors to fund your company. You should be able to clearly explain what you’re doing in 60 seconds. Keep in mind that elevator pitches are only 3 minutes. All key points need to be covered clearly, concisely, and with ease (so you sound like an expert).
Tip #2 – Explain Your Experience and How It’s Connected to What You’re Doing
Track record is extremely important. Immediately after explaining your industry and the products or services your sell, you need to discuss your track record. You track record consists of the background and experience of the management team. It also includes discuss the current profitability of the company (if it’s already established). The point is to make angel investors and venture capitalists feel like you have enough experience and skin in the game to be able to ask them for funding. If they feel like you aren’t an expert in your industry or you don’t have a significant track, you can forget persuading them to invest in your company. You should spend about 60 seconds discussing your track record.
Tip #3 – Explain How the Business Will Make Money & Generate an ROI for Investors
This is the juicy part of an effective elevator pitch. Talking about the money. Angel investors and venture capitalists will want to know how your business will generate revenue, how profitable it will be and how they will generate a return on their investment. You really need to sell the potential success and profitability of the company here. Nailing this part of a perfect pitch means you need to have a very good understanding of the financial and accounting aspect of the business. If you deliver this part of your elevator pitch correctly, you’ll know whether or not an angel investor or venture capitalist will want to invest in your company by the time 3 minutes have passed.
Tip #4 – Enthusiasm & Optimism is Great but be Realistic
Don’t kid yourself. Most angel investors and venture capitalists have enough experience to spot a failure right away. It’s good to be enthusiastic and optimistic when pitching your business to potential investors but you should also be realistic. And what I mean by that is you need to be realistic about what your business can accomplish in terms of profits. Angel investors and venture capitalists are a part of the “big league” of business financiers. They will know if you are selling dreams and telling fairy-tales. Have you ever watched ABC’s Shark Tank? Shark Tank investors quickly dismiss anyone that isn’t realistic about the potential profitability of their business.
Tip # 5 – Use the Business Model Canvas by Strategyzer to Create a Good Pitch
I recently discussed how to create a good elevator pitch using the business model canvas template created by Strategyzer. The business model canvas consists of nine key elements that are used to describe your business. Those nine key elements covers everything angel investors and venture capitalists will want to know when you are pitching your business to them. If you want to create a good business elevator pitch, you can use the business model canvas to guide you.
LenCred Can Help You Get Capital without the Elevator Pitch
Business plans and elevator pitches are always needed when you are approaching angel investors and venture capitalists for funding. However, they are not always needed to get funding from a bank or lender. LenCred can help you obtain funding for your business and you will not need to do an elevator pitch or present a business plan. If you work with LenCred, you can obtain funding for your business strictly based on your personal credit history. If you have a well-established, well-managed credit history, you will likely qualify for financing.
Why You Don’t Need an Elevator Pitch to Get Funded with LenCred’s – Keep it Simple
The LenCred team is dedicated to simplifying the process of obtaining funding for all business owners that choose to work with the company. LenCred’s network of funders don’t require you to verbally present your business to them. All you have to do is meet the minimum personal credit criteria to get approved and submit an application. If you meet the credit criteria chances are you will be approved. And when you work with LenCred you could get an approval in as little as one week.
How Much Funding Can LenCred Help Me Obtain for My Business?
The average business owner receives $30,000 to $50,000 in funding with LenCred’s help. Other business owners have obtained as much as $750,000 with LenCred’s help. How much you can obtain all depends on your business needs, personal credit history, and business track record. If you’re interested in learning more about how LenCred may be able to help you obtain funding for your business (without doing an elevator pitch), contact the team today.