Crucial elements of a winning elevator pitch
By Pauline Muindi | July 21st 2021
When it comes to gaining the interest of valuable investors, you have just a few minutes to make a great impression. This is where preparing a killer elevator pitch comes in handy.
An entrepreneur elevator pitch is a short speech, usually less than a minute, detailing a business idea, an existing business, or product. The idea is that a great elevator pitch should be able to hook an investor in the time it takes to ride an elevator.
When planning your elevator pitch, therefore, think about what you’d say to hook an investor in the minute or so it takes to ride an elevator from one or two floors. Simply put, what would you say to an investor if you bumped into them in the elevator? What could you say to get them interested in your business and probably want to invest in it?
For this reason, you should have a powerful opening and then dive right into your main point in your elevator pitch. Think of an elevator pitch as an executive summary that gives a quick overview of your business and details why you are going to be successful.
Bear in mind that there are different kinds of elevator pitches. However, there are some parts that are common in all of them. After all, all are marketing and sales pitches. With that in mind, here are some tips to help you give a powerful elevator pitch.
Answer How Your Product/Business Solves a Problem
In your enthusiasm, you might easily forget to give a potential investor a good overview of how your product or business solves a problem. Investors don’t want to hear the cool features that come with your products or how you decided to go into business instead of following other career paths. There will be time for that after they’re hooked.
Instead, they want to know what gap your business is filling in the market place to alleviate a pain point for customers. However, don’t get into long, winded descriptions of the problem. Make it as simple as possible in a sentence or two and explain how you’re solving it. If possible, add information or quote statistics that show value in what you do.
Before you start writing your elevator pitch, ask yourself this question: what do I want the potential investor to remember most. A good hook isn’t a boring statement of facts. It should be exciting and show your enthusiasm and passion for the business.
Define your Target Audience
While defining the problem you are solving, you are naturally thinking of a specific audience that your business will serve. Who are they? Although your customer segments might expand later in business, it is important to focus on those who you can reach first.
Some entrepreneurs also make the mistake of including all and sundry as their target market. While this might sound great, it simply isn’t true. There’s no business or product that targets “everyone”.
For example, if you are making leather shoes, you might be tempted to say that you are targeting everyone. Because everyone has feet and therefore need shoes, right? But realistically, you can’t provide shoes for everyone. You must have a specific target audience in mind, such as office workers or school children. The price you set for your products also further defines the target audience: are they lower, middle, or upper class?
Next, estimate how much an average person in your target audience is willing and able to spend on your product. You can do this by researching how much they are already spending on the available solution to the problem. Detailing the average spend of your potential customers is a powerful way to pique the interest of a potential investor.
Acknowledge the Competition
Unless your idea is exceptionally unique you probably have some competition for your business or product. Mention them briefly and why they haven’t been able to solve the problem for the customer. This shows a potential investor that you have done your market research and understand that you will face competition.
It is also a great opportunity to define the unique selling point for your business or product. Is it better, cheaper, or faster? Why would a potential customer choose you over the competition? Make sure that the investor has a clear understanding of your unique value proposition.
Talk About Your Team
Think of your employees and partners as a sports team. For example, if you were an Olympics coach, you would want to boast of the star players in your team. Investors will be interested in cutting you a cheque if they know that you are working with top-notch players in the field.
Talk about why you and your business partners are the right people to execute the vision. Explain the kind of people you have in your team and why their skill set is precisely what is needed to lead the company to success. After all, no matter how great or unique your solution is, it won’t be perfectly executed without the right people on board.
Give a Financial Summary
An elevator pitch doesn’t give you enough time to deliver an in-depth business financial report to a potential investor. But you can briefly touch on your expense budget and sales forecast. Although you don’t need and won’t have time for detailed explanations, it makes sense to have a detailed report prepared that you can easily share if requested. Ensure that you have all the key numbers at your fingertips to adequately answer a potential investor’s questions.
Now that you have an idea regarding what to include in your elevator pitch, distil the information into a few lines. You should also create a one-sentence elevator pitch. Spend time perfecting your pitch to make it sound right. This way, you will be prepared to deliver a perfect, concise elevator pitch when opportunity comes knocking.
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