Vikas Shah is a venture-investor in technology businesses. He told us what he looks for in a pitch from an entrepreneur.
Get to the point
I often see entrepreneurs spend half of their pitch time talking about how they came up with their idea, before they tell the audience what they do.
From early on, the audience should know which problem you’re solving. The rest of the pitch should be about why that matters, and why the audience should be supporting the product or idea.
The most successful pitch understands its audience. A generic pitch, which is less successful, talks about your favourite parts of business but doesn't talk about the audience and what they want.
Prove that you have a market for your product
You have to show the investor that buyers think your idea is worth their time or money.
Your business might be trying to solve a problem for young parents, but unless you can prove that young parents care, you’ve got no market.
You need evidence. It could be a list of people who have indicated interest via your website holding page. It could be that you’ve had a preliminary conversation with a company, and they are interested. It could be the results of a street survey. It doesn’t need to be very scientific or detailed.
Set up a website or holding page. It could say ‘coming soon….’ Then, promote it on social media, and ask people to register if they're interested. If people are willing to part with their data by registering, they are interested in what you’re doing.
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Show what makes you and your idea special
If you have a good idea, someone else has probably had the same idea.
How can you bring it to market? How will you protect it, and make it grow faster than the competition? Tell the investor early in the pitch.
Don't take everyone's advice
You don't have to take someone's advice just because they're successful.
You’re the creator, and the product wouldn't exist if you hadn't thought of it and tested it. You have to decide which advice to take, and which advice to leave.
Find an investor who will believe in you
Your business might need more money, or a new prototype. If the investor believes in you, they will be more inclined to help. If not, they might pull their money out. Investors will usually take a board seat, also.
If you know that the investor doesn’t believe in your product, maybe they’re not the right investor.
People invest in people as much as ideas
Sometimes I watch a pitch by an entrepreneur who doesn’t seem very confident or polished, but they’ve created something wonderful. They might have seen a problem, and put ten years' work and several prototypes into fixing it. That is rare and inspiring, and it often translates to a successful idea.
Resilience is one of the most important qualities of an entrepreneur. If your pitch shows that you can handle the pressures of entrepreneurship, it makes a massive difference to the investor.
As an investor, the hardest thing to get over is bringing your own biases to the table. But it's important, because a new market might see an opportunity that an investor doesn't see. Airbnb is a classic example. Investors thought that no one would sleep on someone else's couch, but a lot of people disagreed.
Entrepreneurs can apply for our global #IdeasChangeLives competition. Winners get £20,000 investment in their idea, support and mentorship.
Follow @MrVikas on Twitter and at his website Vikas Shah MBE.