How to pitch to investors: insider tips to get funded

You’re itching to pitch. You’re ready to raise. You believe wholeheartedly in your company’s potential to achieve success… but how do you actually get investors to believe in you and become seriously interested in investing in your company?

Raising startup funding is a cut-throat endeavour. At SeedLegals, we’re dedicated to simplifying the startup funding journey so we’ve created this article to help you perfect your pitch.

Below, we’ll share insights on what investors look for and our top tips on how to pitch to them based on research gathered from venture capitalists and angel investors. And don’t miss the video interview with investment expert, Phil McSweeney of AngelThink.

• What investors look for
• Early stage vs growth state
• How to pitch to investors
   – Know your audience
   – Perfect your pitch deck
   – Talk up your team
   – Use storytelling and keep it engaging
   – Focus on why not what
   – Demonstrate why the market needs you
   – Know your competition
   – Shout about your success
   – Show how you’ll attract and retain talent
   – Talk about your exit strategy
   – Be clear about what you need
   – Follow up fast
• Watch videos:
  – How angel investors think – get inside their heads and influence their decisions
  – How to pitch in the current VC landscape
• Talk to the experts

What investors look for

What a lot of investors look for comes down to a global, sustainable, under-served (or unmet) market need:

Global – ambitions to expand outside the startup’s country
Sustainable – business model that will last, in principle, forever
Under-served – there could be competitors, but the market is large enough for multiple suppliers
Unmet – if the need is unmet, then the startup may have to educate the market (a frighteningly expensive prospect) or the market may not be ready – compare the Apple Newton with the iPad – similar products but introduced 17 years apart, and the iPad has been 10,000 times more successful
Market – the product/service is capable of being profitably monetised
Need – the market has a need, not a wish or desire

But what each investor looks for specifically (both angels and VCs) is unique to their personal goals and interests. Ultimately, they’re all looking for a return on their investment and a capable team to invest in. We’ve asked some investors what they look for in a pitch.

Early stage vs growth stage

Early stage pitches will look different to growth stage pitches. While the same tactics apply to both, there will be some key differences in your pitch content. Early stage pitching is more focused on proving that you’re investable people, while growth stage pitching is about proving that you’re an investable business based on what you’ve already achieved.

Early stage

Focus on the team and the people behind your company. You have fewer successes behind you because you’re very new, so you’ll need to show that the people on your team are capable of creating your future success. Key points in an early stage pitch include:

• Size of the market
• Why the market needs you
• Why you’re the right team to meet this need
• Any achievements you have gained this far

Growth stage

When you raise at Series A (and B, C and beyond) you’ll need to focus more on what you’ve already achieved and how you plan to double, triple or 10x this. Growth stage pitches are more reliant on metrics. Key points in a growth stage pitch include:

• Milestones you’ve hit
• Milestones you intend to hit
• Revenue you’re currently generating and intend to generate in the future
• New markets you intend to enter and how you’ll enter them

Another key difference between early and growth stage pitching is who you pitch to; at early stage, it’s more likely to be angel investors, and at growth stage, VC funds. More on that in the section below – keep reading.

How to pitch to investors

We’ve gathered insights from multiple investors and thousands of founders who’ve successfully raised funding to compile our top tips on how to pitch. These tips apply to both early stage and growth stage companies.

Know your audience

Sure, you believe in your company, and you think it’s a great idea – but investors are used to seeing a lot of ideas. So before you contact an investor or pitch to them, here are some points to consider.

Angel vs VC

The first thing to do is figure out whether you’re looking for angel investment or venture capital funding. If you’re in the very early stages and looking for pre-seed or seed funding, you’ll probably be more successful if you seek angel investment. One of the most common problems we see at SeedLegals is founders pitching to VC funds too early and being told by investors, ‘Love what you’re doing – but come back later.’

Do your research to understand which type of investor you need to pitch to. There are some VC funds in the UK that invest at early stages, though, so find out if there are VC funds that align with your company at this stage.

Consider the investor’s goals

If you were the investor, what goals would you be aiming to achieve by investing in a company? It’s important to do your research on each investor to understand more about their goals and interests.

💻Do they invest in your particular industry?
✊Do they want to invest in a good cause?
🌿Are they interested in ESG issues that your company helps solve?
💸How is your company going to give them a return on their investment?

Don’t waste time

Investors and founders are busy people. Neither of you has time to waste. Before making contact with an investor, make sure:

✅They haven’t invested in direct competitors
✅They can invest the amount you’re looking for
✅They invest in the stage of growth your company is in (ie early stage or growth stage)

If an investor shows interest in your company, make sure that they’re seriously considering investing in you before moving forward, and remember to keep things as brief and to the point as possible in your communication.

Always think from the perspective of what’s in it for them

Remember throughout your pitch and in any communication with potential investors, bring every point back to what they can gain from investing in your company. When you pitch, what’s in it for you is always secondary.

Show your route to ROI

Investors need to know they’ll get a return on their investment. Make sure that your pitch is clear about how investors will see that return. Focus on:

• How you plan to make money (your revenue streams)
• Where you intend the company to be in five to seven years

Perfect your pitch deck

Your pitch deck is your opportunity to tell an engaging story and sell your idea. Investors either lose or gain interest within the first few slides of your pitch deck, so it’s essential to get it right:

• Tell a story
• Focus on the solution
• Don’t use too many words – bold statements and bullet points are ideal
• Keep it high-level
• Use high quality imagery and video

To read more about what to include in your pitch deck and download our free pitch deck template (which includes step-by-step guidance and expert tips) check out Startup pitch deck: free template with investor tips.

Talk up your team

Your team is one of the top priorities for investors when deciding whether or not to invest in a company. You need the right team to be able to execute your idea successfully. To gain the trust of investors, they need to see experience, expertise and industry knowledge in your team.

Make sure you show off your brilliant team in your pitch deck (closer to the front of the deck is better than leaving it until the end) and dedicate enough time to talk about their expertise and achievements. You can also mention advisors and mentors to emphasise how the company benefits from their ongoing expert support.

Use storytelling and keep it engaging

Investors want to feel excited about an opportunity during and after a pitch. Don’t just talk through your slides. Your pitch should tell a story about what your company is doing. Show your passion to leave them inspired and excited.

Think about how you can keep investors as engaged as an audience watching a trailer for a new movie blockbuster:

• Keep your pitch deck light and high-level so you don’t have to go deep into details. Your pitch should be informative but with passion and excitement at the core. Intricate details can come later.
• Ask questions and interact with your audience.
• Create an irresistible elevator pitch (a 100-word explanation of what problem your company solves and how)

Focus on why, not what

So how do you create an engaging story for your pitch? Every story needs drama. When you pitch, the ‘drama’ in your story is the problem you’re solving. This should be the driving force of your narrative.

Investors are interested in the problem you solve for your customer. They’ll lose interest quickly if you talk through complex details about what you do. Tell them why you exist, what problem you’re solving and why your solution to this problem is so exciting. Be clear about how you’re solving the problem and avoid abstract ideas.

Demonstrate why the market needs you

Investors want to see that your product or service will fulfil a need in the market because that’s how you’ll generate revenue and give them their return on investment. When you pitch, make sure that you’re clear about:

• The need in the market
• How you satisfy that need
• Other market opportunities you can capitalise on down the line

Know your competition

You need to show that you understand your competition. Investors want to know what competition you’re facing in the market and they want to be confident that you’ve got an advantage over your competition. In your pitch, briefly cover who your competitors are and how your solution is more appealing than theirs (in terms of pricing, experience and quality).

Shout about your success

What have you achieved so far? If your company has experienced some success already, you’ll want to share that in your pitch. This will help investors feel confident and excited about your company. Include successes such as:

• Traction gained (like acquiring users and breaking into your market)
• Awards won
• Customer testimonials (customer interest and satisfaction is a huge plus point for investors so you’ll definitely want to talk about this)
• Challenges overcome
• Revenue – if you’re already making money

Show how you’ll attract and retain talent

Building a strong workforce is integral to success. If you can show investors that you’re committed to attracting and retaining top talent and getting your employees aligned with company goals, they’ll be more confident in your ability to achieve success.

In your pitch, it’s worth mentioning how you plan to attract, retain and motivate talent through benefits such as share option schemes.

Talk about your exit strategy

If you have an exit strategy, you’ll want to talk through that at a high level. You’ll be at an advantage if investors can see a clear route to exit (in other words, when they get their ROI).

If you’re in the early stages, don’t worry if you don’t have an exit strategy. For growth stage companies though, it’s a good idea to cover your exit strategy in your pitch.

Do you plan to:

• Go public? (IPO)
• Be acquired (sale or merger)
• Have a management buyout (where the staff buy the founders’ shares)

Be clear about what you need

One of the most important parts of your pitch is ‘the ask.’ This is where you tell investors what you need from them. Include a deal summary slide in your pitch deck to cover:

• Amount you’re raising
• Minimum investment amount
• Whether you’re S/EIS eligible
  This is important so they know they can get tax relief by investing in your company.
• What investor protections you’re offering
  Such as drag along, tag along and preemption rights (read about what these mean in How do I select my key deal terms?)

Follow up fast

After you pitch to investors, if they liked what they heard, they’ll ask for follow-up information. Make sure you follow up as soon as possible.

Sometimes they’ll ask you to come back after you’ve hit a certain milestone (for example, made your first sale) so focus on what you need to achieve and follow up again as soon as you’re ready.

Watch videos

How angel investors think – get inside their heads and influence their decisions

In this video, watch the webinar recording of our CEO Anthony Rose talking to coach, mentor and founder of AngelThink, Phil McSweeney. Find out how to understand what investors are looking for, how to craft the perfect pitch to tap into their desires (of both the head and the heart) and how to secure their investment and ongoing support.

How to pitch in the current VC landscape

In this video, Anthony Rose from SeedLegals and prolific investor Marc Cohen from unbundled.vc help show how to do cold intros, find the right investors, tell a great story, and get investors on board. Marc is well known for providing honest and actionable investor feedback. He shares the lowdown on decoding investor feedback, and more.

Talk to the experts

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✅ Understand your funding options
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