Get All Access for $5/mo

How To Avoid Messing Up Your Pitch To Investors Many start-ups pitch their businesses thinking the investors in the room understand what they're saying – when the exact opposite is actually true. Here's how to ensure you're getting your point across

By Gavin Reardon

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.

Bigstock

There is often a mismatch between how start-up founders think they've communicated and how they actually communicate with prospective investors.

Start-up founders often either shoot through a rehearsed presentation at lightning speed (so fast that an intercepted question derails their train of thought) or they are so unprepared that they spend way too much time on their introduction, trying to convince the investor of the problem in the first place.

This means that the founder fails to get to the real nuts and bolts of why their solution is so important in solving a billion dollar problem. In either case the founder risks losing the interest of the investor.

Related: Vusi Thembekwayo's 7 Rules of Pitching

It's true: A good first impression only happens once.

Preparation is Everything

For a founder, preparation is paramount. It can be nerve-racking to pitch your business to anyone, let alone a potential investor. Preparation (not rehearsing) will allow you to speak with confidence and interact in a meaningful way with your investor.

And be prepared for questions: When an investor asks questions, that's a good sign. It means he or she is engaging with you.

How you answer is critical. Make sure you listen to the whole of the question from the investor. Don't just answer the first thing that comes to mind because you think you know what he or she meant to ask.

An investor who asks questions is trying to engage with you to better understand where you fit in his or her mind, and the relevance your start-up might have in his or her network.

Related: How Investors Choose Who To Invest In

Not listening properly and failing to answer the question directly, will cause you to lose the interest of your potential investor. So take a breath, ask to hear the question again, and then answer.

Every investor wants to know these four things in the shortest amount of time possible:

  1. What problem are you addressing?
  2. What is your solution and what is unique about it?
  3. Who are you and why are you or your team best suited to solve this problem?
  4. What's your traction like in the market?

Pulling it all together

You should be able to answer these four questions in under two minutes. Being concise and having clear thoughts does not happen by accident. It takes preparation, and lots of it.

Spend time answering these questions – but be aware the wording might be different when you're actually pitching.

Record your answers, and then tell anyone who will listen what they are – pay careful attention to what they understood, and what you needed to explain in a different way or expand on.

And most of all, keep practicing.

Good luck.

Related: Choosing Your Investors Wisely

Gavin Reardon

Investor and Entrepreneur

Gavin Reardon is the Founder and General Partner of Kingson Capital, a registered Section 12J Venture Capital Company (VCC) founded in 2015. Kingson invests in entrepreneurs who have unique and scalable business concepts, whose products change the current landscape and existing business models. Gavin provides strategic leadership to the development of the Kingson funds and portfolio construction of the underlying businesses.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Side Hustle

'I Just Hustled': She Earned More Than $300,000 Wrapping Gifts Last Year — and It All Started With a Side Hustle

When Michelle Hensley lost her husband to cancer, she needed to figure out how to earn an income for her family.

Starting a Business

5 Different Types Of South African Business Structures

Do you know which type of business will suit your South African business idea best? Here are the five different types you can register your business as.

Leadership

27 Quotes to Change How You Think About Problems

Great minds give you the benefit of their experience.

Entrepreneurs

26 Of The Richest People in South Africa

Here are 26 of South Africa's richest people, but how did they achieve this level of wealth? Find out here.

Finance

Seed Capital Funding For South African Start-Up Businesses

Want to kickstart your business, but don't have enough funds in the bank? You can unlock capital through seed investment from one of these local seed finance firms.