How to Write an Elevator Pitch (In 5 Easy Steps).
An executive summary, also sometimes known as an, "elevator pitch," is a quick and focused overview of your business, typically designed to help you recruit talent or attract investors to your new enterprise. Regardless of which stage your company is in, the elevator pitch should capture the passion of the founders, the basic function of the operation, and the vitality of the financial goals of your firm. This may seem like a lot of information to convey in a brief pitch. That's why it is so important to remember that your goal is to generate curiosity, rather than convey complexities.
To help you get started, we've developed a definitive guide to writing a powerful elevator pitch that will help your startup get noticed by the right people.
Step 1: Know your audience.
Before you begin writing your pitch, first you should zoom all the way out and consider who you are trying to reach. Obviously, your goal is to use your time wisely and get your idea in front of key contacts who can help your business succeed. There are several types of people who may fit this role, from venture capital partners, to talent recruiting agencies, to potential joint venture relationships. That said, you should always know who your audience is and frame your pitch in a way that speaks to their own goals or objectives. By presenting your idea in a way that makes sense to them, your chances of capturing their active attention increase dramatically.
Venture capitalist: Speaking to a venture capital partner about your business plan can be intimidating. After all, these are the folks with the deep pockets. The key to dealing with this anxiety is to remember that, in their eyes, you represent an opportunity to make those pockets even deeper. The goal of the venture capitalist is to invest in private companies, offering capital in exchange for equity, and facilitating opportunities for that equity to grow.
Now, in what ways can you leverage this knowledge to make your pitch more compelling? You should speak in terms of market size, scalability, and competition. You should have one sentence devoted to each aspect of the DuPont Framework (profit margin, asset turnover, and leverage). Know your ratios, especially cash conversion cycle. These are the metrics a venture capitalist will want to know about, because these metrics speak directly to their fundamental objective: turning money into more money.
Angel investor: Similar to venture capital partners, angel investors are looking to deploy their capital onto the front lines and hope they come home with more. However, there are some key differences between angel investors and venture capitalists, and you should be aware of them (for a detailed comparison, click here).
The key difference is that angel investors will often invest at earlier stages than venture capitalists. This means that angel investors also tend to invest a lot less money, as their investments are more speculative in nature. If you are pitching to angel investors, you likely have less financial data to report. Therefore, you should demonstrate the vitality of your startup by focusing on your own credentials (more on this later), as well as any previous relationships which you bring to the table that will help your business succeed. Round this off with a brief discussion about the ease of scalability and resiliency of your idea. Because you have limited financial data to impress the angel investor, you must convey yourself as the company's strongest asset.
Talent recruiter: When you are building your enterprise, it will be critical that you attract the right kind of talent to your firm. Since competent and passionate leaders are a limited resource, you will need to recruit these individuals by demonstrating your value relative to other firms they are considering. These people will be interested in the opportunity to grow with a company from the ground floor and make a difference in their industry. As they hear your pitch, they should imagine themselves shaping the future. If you lack the financial ability to offer a competitive salary, consider offering stock options.
Joint venture partner: One of the best ways to help your startup grow is to develop joint venture partnerships with other businesses that serve your ideal customer. By sharing customers via cross-promotional methods, your joint venture partnership reduces your marketing expenses and your cost per new customer acquisition. The key to locking down joint venture relationships is to make them an offer they can't refuse. Remember again to consider the goal of your audience. Your prospective joint venture partner must believe that you offer a quality product with integrity, as their reputation will be linked to yours through the joint venture.
After considering this step, you will likely realize that your pitch should be tweaked for each type of partner that you are approaching. Place your idea in the context of their own goals and you will benefit greatly.
step 1 action items:
Write a list of the goals and objectives of each type of person you are going to pitch.
Consider how your startup helps meet their goals. What are they trying to achieve, and how does your firm fit that vision?
Tailor your pitch to fit their needs and emphasize relevant strengths.
Step 2: Know yourself.
Now that you have considered your audience, you should have a great idea of what each type of partner is looking for. Just as you should introduce your idea in a way that strategically highlights its strengths, so should you introduce yourself. There is a significant perceived correlation between the integrity of a leader and the culture of the organization under his/her leadership. Now is the time to do a deep dive into your own self and ask the question: which of my qualities would make me a reliable partner?
This process can be somewhat intensive. As entrepreneurs, we are often so focused on understanding and influencing the external world that we sometimes forget to put in the same work on ourselves. Here is a good exercise to start figuring out which characteristics make you an excellent leader:
Consider some of the biggest challenges you have faced over the years. How did you solve them? What qualities did you rely on to change your circumstances from dire to prosperous? Instruct each of your team members to complete this exercise as well. Once you have finished, put these ideas together and figure out what are the key qualities that you bring to the table.
Venture capitalists are interested in teams that work well together. Specifically, they are looking for a combination of talent, experience, respect, follow through, adaptability, and resilience. You should come up with situations in which your team has come together to embody all of these concepts. Although you shouldn't share these stories during your elevator pitch, you should have them available, as any interested investor will likely ask you for examples.
Once you have come up with a deeper understanding of the intrinsic value of your team, work together to come up with a modest yet declarative statement that portrays your strengths. Here is an example:
"With over 45 years of collective experience, our team is well aware of the lesser-known intricacies of our industry. We leverage this expertise towards innovation by maintaining a strong emphasis on mutual respect and follow through."
Step 2 Action Items:
Reflect on past challenges and how you solved them to discover your core qualities as a leader.
Work with your team to come up with a list of personal attributes that make your firm highly valuable in the eyes of a VC.
Distill these qualities into a precise statement about the intrinsic value of your team.
Step 3: Why? (The problem)
This is where you move beyond understanding your partner audience and the unique strengths of your team and actually move into a brief discussion about the industry in which your startup operates. To begin this step, think back to when you first started your new business. What was the observation that preceded your idea? In other words, what is the problem that your startup aims to solve?
Why does your startup need to exist in the first place?
All successful enterprises are built in response to a specific and well defined need. This can be as simple as the need for a cheaper, better cup of coffee in your hometown, or as advanced as the need for access to malaria vaccinations in the developing world. Your potential investor will want to know the nature of the problem that your firm is able to profitably solve.
However, simply establishing the need is only half the equation. Next, you must define the outer limits of that need. Specifically, how many people are in your potential market? What is the overall purchasing power of that market? What is their willingness to pay for a solution to this need? Don't get too hung up on specific demographics and things of that nature. Remember, this is a pitch, not a business plan. The point is to convey 1) there is a problem 2) there are enough people suffering from the problem that it would be profitable and scalable to build a business around solving it.
This step is all about conveying the size and accessibility of your potential market to the investor. Do not begin discussing the solution that your firm brings to the table just yet. Instead, focus on establishing the need. You will have a chance to discuss your solution (as well as what the competition, if any, is doing wrong) in later sections.
Step 3 Action Items:
Describe the problem or need that your startup aims to solve.
Define the outer limits of that problem. How big of a market does this need represent?
Answer the question, "why does your startup need to exist in the first place?"
Step 4: How? (The solution)
At this point, it is time for you to address how your startup solves the problem that you established in the previous step. The trick is to express the solution with surgical precision; do not get caught up in the details. Instead, focus on the essence of your solution. Try to explain it as though you are talking to someone who is a stranger to your industry.
As Ben Franklin once said, "If I'd had more time, I would have written a shorter letter." There is value in brevity. If you are able to convey your solution in just a few short phrases, you will demonstrate to your audience that you have a high level understanding of your own work. Many times, entrepreneurs get caught up in a linear way of thinking which traps them into thinking that details are bigger than they really are.
Communicating your solution is different from listing all of your products and services. Whenever you find yourself making this mistake, revert back to the more abstract form of your solution. What is the fundamental solution that your startup brings to the table?
You should also demonstrate that your solution has built in desirable features, such as: scalability, resilience to competition, network effects, viral marketability, robust supply chain, etc (these are just examples). Your audience will want to know about these aspects of your business, as they translate into profits.
The solution section should be focused on building value and generating interest, rather than sharing details or action plans. The latter topics are reserved for follow-up discussions and strategy sessions, which take place after you have already secured the curiosity of your investor audience. Many startup founders make this mistake: they assume that their investor audience is already interested in their idea, and skip directly into the details of their business plan. This is wrong. The elevator pitch is called a "pitch" for a reason, you are performing a sales role when you deliver it. Therefore, you should always emphasize benefits, rather than features, when explaining your solution to a prospective investor.
Step 4 Action Items:
Write your solution to the problem which you identified in the previous step. How does your startup solve the problem?
In a few short phrases, explain how your solution is unique and scalable. Use compelling language. This is a sales pitch.
Don't get caught up on explaining the "features" of your solution. Instead, translate them into benefits.
Step 5: The conclusion
The conclusion is arguably the most important aspect of your elevator pitch. When done correctly, the conclusion should lead your audience to ask follow up questions about the key aspects of you, your team, and your business.
After reading your elevator pitch, the prospective investor should decide, "Yes, I want to know more about this."
And that's really it.
If you can accomplish that, then your work has been a success.
Therefore, writing a good conclusion is extremely important. In the conclusion portion of your elevator pitch, you should briefly summarize the strengths of your startup. Following this summary, you should confidently declare the expectations that you have for your enterprise in the future.
As you outline the benchmarks of your future performance goals, remember that you should never overestimate your abilities. Most investors can tell when someone is being overly extravagant, and this will do nothing but hurt your chances of connecting. So, while you do want to create a grand vision of your startup's future, make sure to base these projections in reality.
Finally, you should end your conclusion with an invitation to connect. This is also known as a call-to-action. We discourage entrepreneurs from making an actual equity offering in the elevator pitch. Instead, we recommend that you say something along the lines of, "We are currently interviewing potential partners who would like to participate in the future growth of our organization."
Step 5 Action Items:
Summarize the strengths of your startup.
Outline the future performance objectives of your enterprise.
Include a call-to-action and an invitation to connect, along with contact information.
Final thoughts on the elevator pitch.
In our experience of working with over 10,000 venture capital and private equity firms around the world, we have discovered that the elevator pitch is arguably more important than the business plan itself. These investors receive thousands upon thousands of business plans each year, many of which are delegated to the interns for review and processing. Because of this, many plans never make it onto the desk of a single qualified decision maker.
Elevator pitches, on the other hand, are easy for investors to quickly review. As we mentioned in Step 5, all your elevator pitch needs to do is get the investor to say, "Yes, I want to know more about this." Once you have accomplished that simple task, you have established a connection with a potential partner. From that point forward, you won't be fighting for their attention. You will already have it. And only once that has been achieved can you successfully begin a conversation about the business plan and, most importantly, any possible investments.
Our final point on elevator pitches would be the following: A well written elevator pitch is absolutely useless if it isn't being actively distributed to the right avenues. This is the "uncomfortable" part for many entrepreneurs. When it comes time to get your elevator pitch in front of qualified investors who have capital on reserve for your industry, you must do your research. Our firm has deep dive analytic data on the internal operations of thousands of venture capital firms. We have direct contact with many limited and general partners, as well as angel investors. We know who is looking for what, and how soon they need it. If you are ready to take the next step of bravely putting your elevator pitch into the hands of someone who might actually do something with it, then you should get in touch with one of our consultants today. We are here to help you grow.
The Syntiq Team