A perfect elevator pitch is no pitch at all. It is a working product with an audience. Success and small wins sell themselves, and need little explaining. If you can show that your product is working, and performing a necessary function for its intended audience, then the only thing you have to “sell” investors on is your vision of where the product will go from here (i.e. how will it scale), and the notion that you and your team are the ones to make it happen.
Venture capital helps businesses to scale, it will not validate whether you have a good business or not. This is why it is important to get as far as you possibly can before you look to raise outside funding—it should be a step on your road forward, not as an end goal in itself.
A pitch can go bad for a number of reasons, though I’ve seen a few common pitfalls that first time founders regularly step into, including:
“I need to […insert important sounding activity…] before I show it off.”
Fear of rejection is natural. Too often, first time founders especially will find excuses to delay showing off their product as long as possible because they fear it will be criticized, mocked or even copied. Tackle this early, talk about and show off your product well before you feel comfortable doing so. You will get no better feedback, and find no better alternative for improving your likelihood of success. And investors will want to know that your audience desires, and will ideally pay for, what you are building.
“Anyone could use this.”
You have an addressable market, and it is not “everyone.” I cringe whenever an entrepreneur says that their product is so versatile that anyone can use it—that usually means they have not put enough thought into who could benefit the most from whatever it is they are building. Does your product solve a problem that some small segment of the population or industry is having? Or does it benefit a particular segment more than another? Target audience is the group of people that could benefit the most from what you are building, and have a willingness to pay for it. Focus your work on helping them.
“No one else is doing this right now.”
Everyone has competition. There may be no business—that you are aware of—serving your particular market, or approaching the problem in exactly the same way that you are, but you DO have competition. Every minute that someone is supposed to spend with your product is a minute they are choosing not to spend with another product or service. That is competition. I often see entrepreneurs overlook this fact, and even more so, miss clear competitors found with a simple Google search. Know your competition, and face the question from investors head on—if they bring a competitor to your attention during your meeting, the meeting is essentially over.
You will inevitably have limited time to pitch investors, so make sure that your product does a good deal of the work for you before you ever enter the room. Paul Graham put it best when he said “build something that people want.” Once you have that, consider what you need to help it scale, and craft your story accordingly.