Pitching to your prospective stakeholders, whether it’s the first angel investor or a potential cofounder – is one of the most crucial and the toughest phase in a startup journey. As the true propeller and a must-have element for any business growth, these stakeholders will help shape your idea into a tangible being. They will buy into your dream and help you achieve it. Basis my experience, I comprehend that almost all of the above stakeholders will raise variety of questions at the pitch desk, however, their evaluation parameters remain common at the base level. Parenthetically, it’s not just the ‘Big Idea’ that everyone is looking for, but lots more than what meets the eye.
The first and foremost parameter, I believe is the startup story that underlines the real problem statement with emphasis on what motivated the founder to take upon himself/herself to solve the problem. There is nothing that can move someone more than a personal story. The only area one needs to be cautious about whether the problem statement is real. The hypothesis can be easily tested by talking to potential customers. If they reply with an ‘I need this’ answer then you are on the right path but if it’s an ‘I don’t mind this’ then one should dig deeper to understand the problem.
The problem statement will flow then into the addressable market or the market size. A large addressable market never hurts, but there is an investor for every problem – big or small.
Second parameter, is the passion. Indeed, startup days are tougher as there is so much noise out there. Then, how does a founder break through this clutter? For us, it’s always the founder’s passion and commitment. Your stakeholders – whether they are the investors or your team – all love to associate with a passionate founder who can sell a dream. How can you showcase that is something you would need to come up with.
Third follows the areas where the startup excels at. Exhibiting excellence in preferably one of the key areas for instance, customer experience, process, technology and product among others – can work to your advantage. In short, building an anchor area on your execution capabilities will undoubtedly build confidence on the execution capabilities of the team.
Next comes, the KPI metrics. Displaying early traction is key. However, early traction should not be confused with only top-line growth. Metrics such as customer satisfaction scores, repeat rates, et al. are all very important. They validate the power in the solution.
In addition, with having the business aspects perfectly woven in a pitch, it’s important to pay attention to the softer elements as well that are watched by stakeholders. The first can be creating a favorable impression and a spark of enthusiasm. Others are office environment, work culture and manpower development among others. Stronger the teams illustration the better it is! Additionally, it is very important for a founder to be well networked and have the ability to leverage media/Public Relations to get his business noticed.
In the end, here’s a qualifying statement. Every stakeholder would be ready to jump on the boat if it really solves a problem and passes the sniff test of having the right culture.
Originally published with The Economic Times.