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Pitching a business to potential investors is a crucial stage for founders. Many forms of capital raising require you to craft and deliver a pitch successfully. The process is not easy as businesses compete for investment. You will create a pitch to secure funding from an angel investor, venture capital firm, or bank. This article will explain the contents of a successful pitch, how you can captivate your audience, and further considerations when pitching to investors.
Key Elements Every Pitch Should Include
The following table outlines some key elements any pitch should include.
| Pitch Element | Explanation |
| Your business idea | Explain your business idea. Captivate your investors with your business’s background, mission, and the details of what inspired you to start it. |
| The problem | Demonstrate the problem your business and its products or services aim to solve. |
| Your team | Highlight the key members of your existing team. Briefly outline their roles and responsibilities. Show evidence that your team are efficient and successful in their roles. |
| Market competition | You will need to demonstrate to investors that your business has substantial market opportunity. Address your competitors and show how your business is different. |
| Business model | Display your business model and show potential investors that you have deeply considered your business plan. |
| Financial forecast | Investors will be particularly interested in your business’s financial forecast. Some investors, particularly venture capital firms, will be most interested in generating a profit from your business before exiting. |
| Previous investors | Successfully obtaining funding indicates that other investors respect your idea and its place in the market. Tell the investors if you have previously secured funding and where this has come from. |
| Funding plan | Explain what you plan to do with the funding you obtain and how this aligns with your business plan. |
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Storytelling and Narrative
Storytelling is a key aspect of a captivating pitch. Make it memorable. You want your business to stand out. The investors you pitch to will frequently listen to other entrepreneurs do the same. Create a strong narrative and weave this through your pitch deck. Repeatedly practice your pitch and enter the real thing with confidence, knowing that nobody knows your business better than you.
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Pitch Deck Legal Considerations
There are several key legal considerations that you should consider when crafting your pitch for investors and entering funding rounds.
1. Ownership
Remember that while it can be compelling to seek large amounts of funding, you may have to give away a portion of ownership to your investors. Each type of investor is different, and their expectations vary. Familiarise yourself with their different qualities so you can make an informed decision about the most suitable form of financing. If you decide to dilute your ownership, enter the funding round with a clear understanding of the level of ownership you are willing to give and the implications of dilution.
When you secure funding, ensure that you clearly outline the terms of the investment, including equity, exit, and any other financial arrangements. Seek professional advice if necessary. You need to ensure that you and the investor are on the same page about any prospective arrangement.
2. Legal Advice
You should seek professional advice and consult with experienced startup lawyers when considering forms of financing. A lawyer can also help you:
- negotiate the terms of the investment deal;
- review documents; and
- mitigate legal risks at the start of your business journey.
Essential legal documentation you need to prepare during the investment process includes:
- a term sheet;
- an Investment and Shareholder’s Agreement; and
- new Articles of Association.
Be mindful of any contracts and agreements you enter into in the pitching stage. Read, understand, and seek advice about any document before signing it. A lawyer can draft and review these documents to ensure a legally sound foundation for your developing business.
3. Due Diligence
Be prepared for investors to conduct due diligence. Prospective investors will want to make an informed decision about investing in your business and be aware of potential risks. Be honest and transparent throughout the pitching process.
Key Takeaways
Raising capital is an exciting milestone for founders. A pitch deck will be critical to your funding success. Essential aspects of a compelling pitch include a solid overarching narrative, a clear explanation of your business, a financial forecast, and an outline of competition and market opportunity.
There are several vital legal considerations surrounding this stage of investment. These include:
- being aware of the potential for dilution of your ownership;
- seeking legal advice about the different types of investment and ownership;
- preparing key legal documents; and
- being prepared for investors to conduct their due diligence.
If you need help finding the right funding option for your startup, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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