Startup Elevator Pitch and SIF
Almost as important as PMF
It’s common knowledge that startups should have a prepared short pitch to investors that they may meet in a casual setting. This could be at a networking event or a conference. There is a lot going on and you both want to meet at least a few other useful people so you need to quickly and efficiently convey information to each other.
What the investor is looking for:
Is this startup at a stage where I may want to invest?
Is this startup solving a large problem?
Am I impressed with what they have done so far?
Is this the right team to do this?
Do I like/trust them and want to work with them for many years?
What the founder (should be) is looking for:
Is this really an investor? Many folks say they are but don’t really write checks…
What size check do they write?
Is my startup a good fit for them?
What are the expectations of this investor?
How quickly do I think I can close them?
Do I like/trust them and want to work with them for many years?
What both parties are trying to do here is understand whether there is startup/investor fit (SIF).
The reason that I put “should be” in parentheses above is that many founders are not asking questions to profile the investor. They get too focused on pitching their startup and not enough on profiling. What’s the point in pitching to an investor who will never give you money?
Ask more questions, raise more money.
If your main goal is to raise money NOW then you should be focused on investors who can write checks quickly. This is usually Angels and Family Offices, NOT VCs. I see way too many early stage investors focusing on VCs when they are at least a year away from qualifying for investment from them. For most early stage startups you should be around 80%/20% Angels/FOs vs. VCs on your outreach to investors. 6 months is fairly quick from first meeting to money in the bank for VCs, while I’ve seen Angels wire money to my startups in 2 days.
Here is the elevator pitch template (Caps designate where you customize):
“Hi, I’m NAME, POSITION of COMPANY. COMPANY provides/does/solves PROBLEM for CUSTOMER. Over the past TIME, COMPANY has TRACTION and we’re GROWING AT METRIC. Now is the time to invest in this business because WHY NOW? And we are the team to do it because AMAZING TEAM CV’s. ASK”
Here’s a fake example:
“Hi, I’m Travis, CEO and cofounder of Uber. Uber is an app that replaces taxi rides with a private driver. Our rides arrive 30% faster and cost 20% less than taxis while at the same time being more pleasant and safer. You pay by credit card and there is no tipping! Over the past 12 months we’ve facilitated over 10,000 rides and generated over USD1 million in revenue. We’re growing at 32% month over month.
The taxi system in America is broken and now is the time to disrupt that legacy business with new technology. I’ve built 3 startups over the past 7 years, 2 of which were acquired through successful exits and have raised capital from top tier investors like Paul Graham and Google Ventures”*
Assuming you’re fundraising you also need an elevator fundraising pitch at the end (the “ask”, always have one). Here’s a template for that. I will cover this topic in more detail in another post.
“We’re currently raising $XXX to DO WHAT?, which will get us to NEW AWESOME METRIC by DATE. We’re connecting with WHO? who would like to part part of the journey as COMPANY CHANGES THE WORLD.”
Another fake example continuing on from the previous fake example:
“We’re currently raising $3 million to expand into 3 more cities and expand our fleet by 500% in the next 6 months, targeting annual revenue of USD10 million from the current USD1 million by the end of the year". Existing investors have already committed USD500k. We’re looking for a lead investor as well as others who would like to join the round. By 2015 Uber will be American’s preferred form of urban car transport from coast to coast”
*Many people don’t know that Uber was originally a private car hire app and did not do ride sharing until after their Series A round.
**Also please ignore the weirdly long finger on the lady in the elevator… DALL-E WIP… the man also seems to have 4 fingers on his left hand. It’s interesting that hands are hard both for human artists and for GenAI.