What is an elevator pitch for start up and how to communicate a business idea?

elevator pitch
Image Source: Google Image

An elevator pitch, simply called pitch is a short presentation of your business idea to a potential investor or lender. Elevator lift means: imagine, then, that you are in an elevator with those who might fund your project and have a few seconds, or not more than a few minutes, to inform him of your business idea and convince him to invest in your start up.

The times of elevator pitch can vary from 2-5 minutes in the big competition pitch sessions , in which usually makes an initial selection of the most interesting projects considered, to a maximum of one hour, in which you’ll have most of the attention of investors focused on you.

Ten, in fact, are the highlights of an effective pitch deck, or topics that may influence an investor to take you seriously and be interested in your startup.

The order may vary, with the exception of points 1, 2, which must necessarily be addressed first and in succession, and the point 10, which closes the pitch.

Problem

From what need does your idea? Explain what the problem you have identified is and how it is relevant to your target. This point serves to justify the need of the startup.

You’ll have to explain:

  • What’s the problem;
  • And because it is a significant problem for the reference target;
  • How widespread this problem.

Solution

Here’s how your start up solves the problem, thus responding to a specific need.

This slide set before:

  • What do you propose;
  • Like your idea solves the problem;
  • Because your solution is better than the other.

The colon problem and solutions are fundamental. Investors must perceive the problem as real, and the solution must make it clear that your startup has a real raisin.

To draw investors attention is necessary to involve him from this moment. Use of techniques storytelling can be crucial for creating a contact between you and the audience / partner, since by definition a story that functions describes an arc that goes from a certain reality in its evolution. In this case, needless to say, it will be a successful conclusion.

Business model

How do you earn money from your startup? Remember: Cash is the King. Those who invest in something today wants to first know what tomorrow will be able to obtain. The exposure should be as concise and understandable as possible, and to demonstrate to investors how much your startup can generate a secure income.

The topic of this section will be:

  • How your startup will earn?

 You may also like to read another article on heygom: Management: 5 tips that you should not follow to become an entrepreneur

Operation / technology used

You have to explain the ways in which your start-up can be usable by users so that they can solve their “problem”, and what the value of your product or service in your target’s perspective.

  • Use an existing technology and pruned of all?
  • You have developed unique proprietary technology?
  • How you will defend this technology so that it is not replicated by others?
  • From where?
  • What are its strengths compared to existing technologies or similar solutions (Unique Selling Proposition)?
 elevator pitch
Image Source: Google Image

Marketing and sales

How your target audience will know your start-up? Have you thought about a price or a fee? Who will have to pay in exchange for what? How do you get him to pay to use the product or service you offer your startup?

To resolve all these issues, you will need to deal with these points:

  • The marketing strategy that you thought
  • The expected price
  • These sales
  • The advantages and guarantees you offer to those who buy / pay for your vision
  • Methods of promotion and publicity provided

Competition

The competitive analysis is essential to validate the competitive advantage of the startup and its sustainability. One of the most frequent mistakes during a pitch desk is just to ignore or underestimate their competitors, with the result to appear superficial and naive eyes of potential investors.

It shows that you’ve done your “homework” and that you’re prepared to explain what the real competitive advantage of your idea and how your offering differs from that of competitors.

Therefore concentrates on:

  • The main and their positioning on the market
  • What advantage / strength you have on them
  • As this benefit is measurable
  • The advantage is sustainable or temporary? It is relative or absolute?
  • How could your competitors react? Have you evaluated your counter?

 You may also like to read another article on heygom: Negotiation Techniques: 5 Key points for the entrepreneur

Team

Without a team that supports you, hardly anyone will invest in your project. For a startup, team is all about. This point is crucial to your pitch. You must prove that you have selected your team based on the specific requirements of your business idea, explaining succinctly and clearly, what are the roles of each and how it is structured map of who-does-what.

Make sure you provide all the necessary information about each team member, including descriptions also a picture: it helps to humanize and personalize the team.

There will therefore be missing:

  • Name, position and pictures of the team members
  • Most significant experience (just a couple of lines)
  • Workload and commitment
  • Figures to management and / or support of startups (executives, advisors, supporters …)
  • Demonstration of the consistency of team skills for successful startup
elevator pitch
Image Source: Google Image

Forecasts and economic prospects

At this point, you will have to explain in a few lines what are the development of your business forecasts and how the competitive advantage would be maintained and / or regenerated over time. The presentation must be concise but detailed. You can use bullet points, numbers, charts and cakes provided they are extremely clear and easy to understand.

Then you will describe:

  • Market scenarios
  • Projections based on the assumptions made in the preceding paragraphs
  • Accurate estimation of required resources and costs
  • Sensitivity analysis (such as the value of the business may vary depending on the variation of certain external parameters)
  • Including target market ratio and ease / difficulty of achieving the economic and financial break-even point (break-even costs and revenues)

Current State of the art and development times

It is the time to present your roadmap showing how far you are and how you’re going to continue. If your business can also have a development at the international level, it is time to say loud and clear.

In this slide, you will need to talk about:

  • What are the implementation steps foreseen;
  • What metrics will be used to measure the various planned targets;
  • Intermediate objectives, resources and expected costs for each target;
  • How each step determines the structure of the economic and financial projections previously analyzed.

General Synthesis and call to action

And here we are at the fateful moment when you have to take stock and move forward your request.

The phase of fund raising request is mentioned by all the major influencers, while hardly ever appears in the deck pitch examples “illustrate” (Airbnb, WeWork), probably because it was removed due to confidentiality issues. It is an essential component of the pitch deck, because it is the same reason for which the pitch has been made.

You have attracted the attention of investors, have given him good reason to invest in your startup, and now is the time to tell him what amount you are talking about.

Insert:

  • Overall summary of your presentation;
  • Quantification of the investment required;
  • Detailed Usage of the funds requested;
  • Ability to generate value through the allocated funds.

Finals Tips

  • Be concise and engaging (it uses storytelling to introduce your start-up);
  • Learn to manage your time at your disposal;
  • Edit your pitch and evolve depending on how you evolve your startup and market scenarios (you can pitch several before finding the right investor);
  • Get ready to answer any question you may mail. Keep handy backup slide should you learn a certain subject or detail;
  • Adapt your pitch to the audience that will listen to you. Business angels, incubators, venture capitalists, seed capital, all have different goals and priorities;
  • Practice with your friends, with your mentor, with the resources that you find online (PitchBot, case studies, etc.).
  • Rely on a Presentation Designer. It is his job, will help you get the most from your presentation.

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