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Create a Pitch to Angel Investors

It is important to remember that the purpose of your video pitch is to get a person interested enough to read your business plan. Your goal is to hook them with the video pitch, real them in with your executive summary and then net them in with your business plan. So to re-emphasize, don’t use your video pitch to go into great detail about your business plan! All you want to do is get their interest.

How to Create a Compelling Pitch to Angel Investors

Video Tips For Making a Pitch to Angel Investors

Now lets get down to the nuts and bolts of writing the script for your video pitch. The elements of this script contain many of the same things that are in your business executive summary. However, the format is completely different. Imagine getting up in front of a bunch of angel investors and reading your executive summary from the beginning to end. After about 15 minutes you’d probably have everybody slumped over and sleeping in their chairs.

So you are probably asking yourself, why do a video pitch in the first place? If my video pitch has some but not all of the information in the executive summary, why not just give out the summary and skip the pitch? It’s a tempting thought, especially if your not fond of public speaking. However, your executive summary cannot convey your personality or your passion for your business. Remember that the single most important thing the investor will be investing in is you and your team. They want to know that you’re passionate about your company. They also have to be convinced that you have the commitment and fortitude to stick with it till the end and not bale when things get tough.

Another thing you must convey in your video pitch is integrity. Rightly or wrongly, during your video pitch they will be judging your body language to determine if they can trust you. As a result, during your pitch make sure that you always maintain eye contact with the camera. Avoid looking down or away from the camera. Don’t fidget or squirm in your seat. When you are delivering your video pitch try to picture yourself at a cocktail party having a conversation with someone about your business opportunity. Investors want to know if you are an honest person. That’s why it is so important that you don’t have any incongruities within your pitch.

Don’t exaggerate! Make sure your financial projections are realistic! Don’t tell them that your product or service has no competitors. If you do, they’ll think that you were too lazy to do your market research. There is always competition, even if it’s the old way of doing business.

Most effective video pitches start with an attention grabbing statement called the elevator pitch. Always remember that you have approximately 30 seconds to hook the viewer to watch the rest of your video. If you don’t do it in that amount of time, they will be off surfing the internet for more interesting material to view.

So what is an elevator pitch? Its name comes from the idea that you should be able to deliver a concise, compelling description of your business opportunity in the time it takes to ride an elevator up a few floors—approximately 30 seconds. The formula for the perfect elevator pitch involves describing three things as succinctly and precisely as possible, these are the problem your business solves, the solution your company provides, and the potential market size of your product or service.

After using the elevator pitch to get the Angel investor’s attention, you need to describe your market. Who are your customers? What major problem are they having that is not being fully solved with what is available in the marketplace today? How many potential customers are there? Who are your competitors and what are they charging for a product or service that is similar to yours? How are your competitors coming up short in solving this problem? If you are already selling your product or service, this is a good place to describe the success you’ve achieved so far. If not, do you have any market testing to gauge how customers will react to your product or service? This is the area in your pitch where you want to describe your competitive advantages. Also state if you have any patents, trademarks or copyrights that will prevent your competitors from copying your idea.

The next item in your pitch should be a brief description of your product or service. Keep your product description brief! Remember that investors are mainly concerned about how your business is structured. For example, they’ll want to know if your company is making your product or are you outsourcing manufacturing. Who is distributing your product? Are there any retailers that have already expressed an interest in selling your product? Are there any consumables, like ink cartridges in printers, that will provide your company an ongoing income stream? Who’s going to service your customers after they buy your product? Do you have any other products or services in the pipeline that can be sold to your existing customers?

Now that you’ve gotten the viewer excited about your business opportunity, you need convince them that your team has the experience and skills to execute your business plan. Have you or someone else on your team ever done this kind of thing before? An angel investor will be much more inclined to invest in your company if you have executives on board who have taken a company from the beginning to the end. They also want to see that you’ve had prior experience in creating an organization. They know that having a great idea for an product or service and developing a successful company that will deliver it, are two very different things. You need to ask yourself right now….do you have a credible management team that launch a company and develop it into a thriving business? If not, don’t even bother doing your pitch. It will be a waste of time.

When you’re describing your business team it is a good idea to list any significant company names and major management positions held by any of your team members. Also describe any important corporate relationships that are vital to your business plan. These could be manufacturers, distributers or retailers. Having corporate partners will often validate your business opportunity.

So far you have been ramping up the emotional intensity of your pitch. First you described the major problem that your company will solve. Next you showed that there will be a huge demand for your product or service. After that you described how your product or service will be vastly superior to anything available in the market today.

Then you showed that you and your management team have what it takes to make this all happen. Now you’re ready to deliver the exciting conclusion, the home run that will hit it out of the ball park. This is where you describe how the investor will make boatloads of money by investing in your company. This is done by describing your financials in broad terms. In this section you’ll show how much money your business is projected to make over the next four or five years. It’s a good idea to initially describe the costs, pricing and profit for a single transaction. Then describe the projected number of sales over the next four years. End this section by summarizing the expected yearly gross sales and profits you expect to achieve on year four.

Hopefully by now, the viewer has his checkbook out ready to write you a check. Wow, wouldn’t it be nice if it was that simple. Realistically, your hope is that they interested enough to look at your business opportunity in more detail.

After describing how much money your company will probably make, the investors are going to want to know the current valuation of your Company and how much money you are trying to raise. Before you do this, describe the current capital structure of your company. You do this by describing in broad terms how much money you, your family, your friends, your management team have invested so far. Also report any Angel investment in your business? Please note that investors want to see that you have significant skin in the game. If you’re not willing to invest in your company, why should anyone else.

After describing your funding needs, you need to describe what the money will be used for. The best way to do this is by listing milestones and the money needed to reach each milestone. Investors like to see milestones since it shows them you understand the progressive steps that need to be accomplished in your business. They will also be asking themselves if the stated money needed to reach each goal is credible and realistic.

After thanking the viewer for their kind attention, there’s one final item that you need to put into your video business pitch. That is a call for action. Always end your pitch with a prompt that asks the viewer to read the executive summary of your business plan in order to get more information about your business opportunity. So I’ll give you an example of a good video pitch ending. “Thank you for you kind attention. I would urge you to review our executive summary and our business plan in order to obtain a more in depth description of our business opportunity.

Now let’s get into the nuts and bolts of actually recording your video pitch. The first step in doing your video pitch is to break the script into 15-30 second sections. Memorize the basic points of the script so that when you deliver it, it flows. If you find that the wording in a particular part your script keeps tripping you up, reword it so that it doesn’t. Keep modifying your script until it flows naturally as if you were having a conversation with someone.

Practice each section a number of times, preferably with a home video camera. When doing your pitch look at the camera as if it were a person. It sometime helps to have a supportive business associate or friend stand behind the camera so that it will be like speaking to them when you are recording your video. Make sure you keep eye contact with the camera. Try to avoid looking stiff and use appropriate facial expressions during your delivery. It is also important to dress the part and look professional.

In most cases a video that frames your head and shoulders works best. Make sure that the lighting is adequate but not glaring. You want clear audio. Therefore, use a good microphone and eliminate any background noise.

Regarding your PowerPoint slide presentation. Keep it simple. Don’t display slides with long and wordy bullet lists. Instead of a bullet list, you might want to just display a title. A picture of your product or a slide that convey’s your service would be a good slide to include in your presentation. I would definitely include grafts and tables that illustrate your financials. However, keep them simple!


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