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Fast Track Thinking: The art of the ‘elevator pitch’

The art of the elevator pitch

An elevator pitch is a great way to summarise – impactfully – your business and idea to an Angel or equity investor. But what is the formula for a successful one? Mark Gibbons, senior access to finance specialist at Access to Finance Lancashire, offers some helpful pointers.

First thoughts of an elevator pitch may bring memories of nervous entrepreneurs literally in an elevator ascending to take on the Dragons of the popular TV show Dragons’ Den.

So, what is an elevator pitch?

An elevator pitch, or elevator speech, is a brief description of an idea, product, or company that explains the concept in a way such that a listener can easily understand it in a short period of time. It is a really good method of summarising your business and idea to an Angel or equity investor in an impactful way when seeking equity investment.

Think of it as a shop window: you want customers to stop, look and then be enticed inside to see more. In this case, entrepreneurs want to grab the attention of the investor and tempt them to take a closer look. But what is the formula for a successful elevator pitch? We will look at a few areas to focus on.

Be clear and succinct

If a proposition, is over-complicated or contains too much jargon this will probably switch an investor off. The pitch is not a full business plan but needs to clearly highlight the problem your business is solving, how it will generate income and any potential exit strategy identified.

Avoid excessive use of acronyms – and if you do choose to use them, take the time to explain the longer name or phrase, rather than assume it will be understood.

Create a well-presented presentation

Obviously, the presentation needs to be neat and well-ordered, without too much text or cluttered with images. Use the presentation slides as a prompt for you to talk around the proposition with enthusiasm and not simply reading a script.

Pitch presentations often work well with a brief overview or introduction that includes the investment ask.

Management Team & Credentials

Names, roles and relevant experience in the form of an organigram give a snapshot of the management team – and highlight a gap in the management team – as well as any potential hires, if identified, that will strengthen the team.

Don’t underestimate the value that the investor will put on an experienced management team. In a survey undertaken by the UKBAA, investors were asked to rate the importance of key factors that influence an Angel’s decision to invest in a business.

The entrepreneurial team having the relevant skills or experience came in first, at 93%; interestingly, ahead of other factors such as a disruptive product/service, and even expected returns! Also don’t forget, personality is also key. Investors are looking for people they can work with.

Getting the numbers right

Financial projections are critical. These will usually include an integrated set of financials comprising a profit and loss, balance sheet statement and cashflow. The assumptions will need to be backed up by thorough and robust market research and costings.

Understanding the time and cash required to complete objectives is essential; giving the impression grandiose milestones can be achieved on a shoe-string budget risks losing credibility with the investor and the proposition being under-capitalised.

Explain the funding position

Providing a background to the funding position of your opportunity will provide a great insight into what funds have been used and how they have been invested or spent to date. Demonstrating progress achieved on funding to date instils confidence that you can deliver on your goals.

Clearly explaining the funding required and the purpose for the funding supports the funding requirement. If the Angel investment is intended to be part of a funding package, break down the percentage and values of the investor, debt and grant funding.

Don’t forget management contribution. The burning question of how much the shareholders have invested can be answered before inevitably being asked.

Whilst this is not an exhaustive list of guidance, taking on board these few areas will get your elevator pitch off to a great start and grab the attention of the investor… and entice them to take a closer look, and reach for the cheque book! Mark Gibbons

If you are based in Lancashire, you can access fully funded, tailored support through the Access to Finance Lancashire team which has significant knowledge of the funding landscape and extensive relationships with Business Angel networks, Venture Capital, Public Sector Funds, and Alternative emerging sources such as International Investors (via UK Home Office Innovator Visas).

Would you benefit from funding support to help grow your Lancashire business? Call Boost on 0800 488 0057 or complete our quick form and a member of the Boost team will be in touch to start your growth conversation.

The original version of this article first appeared on the Insider NW website.


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