4 Things Founders Should Know Before Pitching An Investor

As a startup founder, raising money is one of your most important tasks. Funding can help you scale operations, hire new team members, launch marketing initiatives and more. Having money often makes the difference between being in business and being out of business.

In order to successfully raise funding, you need to convince people outside your organization that your idea merits investment. What goes into a great pitch to investors?

Let’s break down 4 tips from someone who hears pitches all day long: Kevin O’Leary, aka Mr. Wonderful, the renowned host and investor on Shark Tank (and StartEngine’s Strategic Advisor).

Make It Snappy

This is one of Mr. Wonderful’s top tips: get the core idea of your business out in 90 seconds or less. That means delivering the most concise, compact version of your pitch there is. In that time, you need to convey what your company is about, how it works, and what the investment opportunity is. As Mr. Wonderful says, “Explain it to me so I understand it right away.” If you can’t do that in 90 seconds, you may lose the investor’s attention.

Market Yourself

Mr. Wonderful wants to know why you and your co-founders are the best people out there to execute your idea. In addition to establishing your credentials, don’t shy away from sharing details that could convince an investor to fund your idea. “Is it in your family? Did you try [to start a business] before and you’ve learned from your failure?” Mr. Wonderful has asked in the past.

Give investors reason to believe in you specifically, that you are more qualified than anyone else to build your idea, that you care more than anyone else about the specific problem you are working to solve.

Have Your Research at the Ready

Know your numbers, as Mr. Wonderful likes to say. Beyond knowing your own business, you should demonstrate that you know the industry like the back of your hand. Come prepared with data: on the size of your industry, who the competition is, your revenue, how much it costs to make your product, and where you might widen your margins.

Mr. Wonderful also advises that you research your investor: “Know everything about the business people to whom you’re pitching. Get the prospectus; read the website; Google the hell out of them. You can’t simply wing it in the Tank, or in the boardroom.”

Keep Gimmicks to a Minimum

Although you should strive to present your pitch in a creative way, when it comes to props, less is more, says Mr. Wonderful. “There’s a big difference between a solid pitch that happens to dazzle, and one that needs to dazzle to hide its lack of substance,” he explains. “Less is usually more. If yours is a good idea, it won’t need bells and whistles to make the grade.”

Now that you know how to perfect your pitch, are you ready to pitch your business to a live audience?

StartEngine’s quarterly live pitch competition returns this October, giving founders the opportunity to pitch their startup to Mr. Wonderful himself. Five companies will pitch LIVE to Mr. Wonderful. One company will walk away with:

• A $25K grant from Mr. Wonderful
• A 1:1 business consultation with Activision and StartEngine founder Howard Marks
• Playbook onboarding, the Plug and Play digital innovation platform with access to business development opportunities and events
• Mentorship session with a Plug and Play Ventures/Investment Partner and will be granted 6 months of desk space at the Plug and Play headquarters in Sunnyvale
• A 50,000 point sign up bonus and priority onboarding with Brex
• A 50% discount on TriNet service fees

The Crowd’s favorite company will take home $5K!

Enter the StartEngine pitch competition here! The deadline to apply is October 8th at 12pm PT.

Kevin O’Leary is a paid spokesperson for StartEngine. Read the 17(b) disclosure here.