The Elevator Pitch — how to create an elevator pitch to get investor attention
What is a startup elevator pitch?
An elevator pitch is a brief summary of your business, product or idea. It should be no more than 30 seconds and be easy to understand i.e. no jargon.
There will be time for more detail later, this is a teaser to get an investor interested. Keep it short and sweet. Use The Pyramid Principle to help you focus on what really matters.
Every entrepreneur should have an elevator pitch
Writing an elevator pitch is a great exercise for any founder to clearly frame the company’s purpose and current progress. Don’t skip it.
Structure of a good elevator pitch
A startup elevator pitch should be structured to include four main areas:
- What problem have you identified?
- What does your company do to solve this problem?
- How big is the market you operate in?
- How much traction does your business currently have?
1) What problem have you identified?
The icebreaker should be a brief and clear overview of the problem you have identified and plan to solve.
Keep it simple enough for anyone to understand, whether the audience is a Venture Capital firm or your mum.
If the problem is really complex, just provide a very high-level summary. Once you have an investor’s interest you can go into more detail later.
Tip: Review and confirm you are not using jargon in this section. For example, your business is working on open banking, instead of talking about encryption protocols and APIs keep the language simple — words like; ‘talk’, ‘connect’, ‘secure’ are much more clearly understood.
2) What does your company do to solve this problem?
You have defined the problem, now you need one sentence explaining how your company solves it.
As with the problem above, this should be clear and easy to understand. For example; Wikipedia could say “we offer a free online encyclopedia so every human can freely share in the sum of all knowledge”; Slack might say ‘we help organisations and businesses communicate over a simple chat interface’
At Pitch Hive we “We help businesses improve their fundraising presentations”.
Section 3: How big is the market you operate in?
Investors in early-stage companies are very focused on market size. The probability of failure is very high, especially in early funding rounds often called ‘pre-seed’ and ‘seed’ rounds so the potential opportunity needs to be large enough to compensate for the risk.
As a rule of thumb if you are looking to raise serious money then you might need a market that is £250-£1bn+.
Not sure how to assess your market size? Check out Visible VC’s post to get to grips with this important concept.
Section 4: How much traction does your business have?
Investors will often want evidence of ‘traction’ before investing. At the very least, they will want evidence of some form of progress.
What does ‘traction’ mean for your business?
Traction will most likely be some sort of Key Performance Indicator (KPI) that you will be tracking. If you are still ‘pre-launch’ then this might just show how much progress you are building and testing behind the scenes.
Pick just one or two key variables here. Research what metrics investors want to see in your sector and weigh it up versus your most flattering numbers.
Your elevator pitch is the 30-second pitch you carry around in your head to generate initial interest from investors, the press and anyone who will listen. Get prepared and get it right.
3 Golden rules:
- Keep it under 30 sections
- Keep it simple
- Practise, practise, practise…
Got your elevator pitch done? Why not get some feedback before you start approaching investors. Book a free pitch practise session today.
Pitch Smarter. Raise Money Faster.