Pitching to Investors: Best Practices During the COVID-19 Crisis

Certainly, it will not be an exaggeration to say that the year 2020 has been an unprecedented one for startup companies in the U.S. and globally. While venture funding across the globe fell around 6% in the first six months of 2019, the first half of 2020 witnessed a sharp fall of 17%.

In the U.S. market, the impact of the COVID-19 crisis continues to unfold in startup funding. While startup deals reduced by around 16% following the 2008 financial crisis, funding deals in the first quarter of 2020 declined by around 6%.

At the same time, the U.S. accounted for 97% of the overall funding in North America in the first half of 2020 – with the major share of funding going toward late-stage financing and technology domains.

 
Image source: Crunchbase

While the COVID-19 crisis has negatively impacted venture capital for tech startup funding, it has certainly not spelled the death knell for the startup industry. Having said that, American startup founders and business owners do face plenty of challenges on how to generate the next round of funding for their businesses. 

Among the latest trends in startup funding, entrepreneurs have taken to remote pitching – to get funding from investors. As an active angel investor and entrepreneur, Chenoa Farnswith presents seven tips on how to gain an investor’s attention during a virtual pitch. 

As Chenoa quotes it explicitly,

“not all investors are writing checks right now.”

Despite having a great idea or product, every investor may not be willing to put their money into your startup. Before agreeing to the pitch, do your homework in finding the right investor – including their previous investments, interests, and the type of business model that would excite them.

“It’s almost always harder to raise capital than you thought it would be, and it always takes longer. So, plan for that.”

– Richard Harroch, Venture Capitalist

Once you find the right investor, how do you go about pitching your business? Here are four of the best practices that you can adopt – keeping the COVID factor in mind.

1. Look for hidden opportunities in the current crisis

As a business owner, you do not need to wait for the current crisis to end – before pitching to potential investors. As a rule, start looking for business opportunities that have become relevant – thanks to the ongoing crisis. 

For example, Kognition – an enterprise-level AI solution provider for smart buildings – presented the design for a thermal camera that used image recognition to screen the body temperature of people entering a building. The company also offered a limited trial period of thermal camera technology for free – something that would not be thought of in the pre-COVID world.

2. Create the perfect pitch deck

Next, you need to create the perfect pitch deck – with 15 to 20 slides – that covers all aspects of your business including the problem to be solved, your solution, product details, targeted consumers, and business strategy. Above all, your slide presentation should complement your business story and presentation – and not just be about putting all the information on a presentation deck.

Entrepreneur and investor, Rizwan Virk, shares an interesting take on a story for selling a video game – comprising of the following talking points:

  • The growing market for mobile games
  • Having over a million active players daily
  • Why players love our game?
  • About how they are making their profits – and so soon!
  • And finally, about how to make more money by investing in their proposed plan.

3. Prepare yourself for a remote (or virtual) pitch

Having a face-to-face meeting seems just a distant reality in today’s COVID environment. 

Remote work is likely to continue even in the post-COVID era – as confirmed by the findings of the 2020 State of Remote Report where 98% of the surveyed workers plan to work remotely (at least partially) for the rest of their careers.

So, what are the best practices when it comes to remote pitching to investors? First, avoid any cold business emails to investors, as they simply do not work. Share your presentation deck beforehand with the investor to get them interested in meeting you – and ask questions.

Second, before the pitch, make sure your Wi-Fi Internet is working – and you are familiar with how video conferencing tools like Zoom work. Plus, talk about all your presentation slides – that you have shared with your investor – during the video sessions.

4. What investors check for in your first interview?

Preparing for your first interview with a potential investor? What do they really look for? Business metrics like customer acquisition cost (CAC) and lifetime value (LTV) can be a good start. Also, show how quickly you can acquire new customers. A case study shows how Shared inbox company, Front raised over $10 million in the first round of funding – by showing their organic growth – and another $59 million in subsequent funding rounds.

Image source: Startup Freak

When it comes to investing in product startups, technical expertise and product readiness are what most investors expect from you. For example, if you have developed a fintech product, then make sure your pitching team knows everything about the fintech industry.    

Bonus tips

Here are a few more bonus tips for you to create the perfect pitch for your potential investors!

  • Funding for a product company? Do remember to talk about what your product does.
  • Anticipate the investor questions that you will be asked – and prepare to answer them and dispel other common concerns.
  • And finally, when it comes to money, be clear on how much money or capital you are expecting from this round of funding.

Need help in preparing pitch decks? 

Here are some useful tools that can help you prepare effective pitch decks:

  • Prezi: A presentation sharing tool that was ranked as the most innovative tool by PC World in 2018.
  • Haiku Deck: a fast and user-friendly free tool for preparing presentation decks – with a functionality that matches MS PowerPoint.
  • Google Slides: a low-cost solution from Google that is easy to use for making and sharing high-quality decks.

Conclusion

As startup investors tighten their pockets, the right pitch can help you succeed in getting the right amount of startup funding to take your business to the next level. Hope the best practices and tools presented in this article help you achieve your goals.

KiwiTech has helped hundreds of entrepreneurs connect with investors through its various pitch events including demo days, techathons and venture fairs. If you are actively raising capital and seeking opportunities to pitch to angel investors, VCs or family offices, find a KiwiTech event tailored for your startup stage!

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