How To Walk Away With An Investment in 3 Minutes

 

Recently, I’ve been getting more connected with investors around my area. The last time I was at an event filled with investors, I decided to capitalize on the opportunity.

 

 

It was a small event by the beach and the investors wanted 5 entrepreneurs to pitch their product or service in 3 minutes or less. With hundreds of entrepreneurs trying to present themselves, only 5 were given the opportunity to go up there and do it.

 

 

Lucky for me, I somehow maneuvered my way on stage as I was 1 of the 5 people picked to go on stage. They gave us less than 5 minutes to prepare our elevator pitch. There were hundreds of entrepreneurs, dozens of investors, and a few very nervous presenters in the audience.

 

 

Even though I did not walk away with an investment in 3 minutes, my presentation got a lot of praise from the investors and other entrepreneurs in the building. Not only that, but there was an elderly lady who was able to walk away with a 6 figure investment in 3 minutes.

 

 

I was able to talk first hand with each of the investors and was able to get some really good information out of them. They told me why the lady won the investment in 3 minutes and how anyone can do the same. Here’s what I learned from my day at the beach:

 

 

Bring It

 

When you’re pitching in a 3 minute setting, it’s more likely that you need the investors money and help than they need you. Your whole presentation needs to be upbeat and show them how passionate you are about your product.

 

 

If you cannot get excited about your own product, don’t expect others to do the same. Even though the investors or panel may be watching you during the 3 minutes, it doesn’t mean they are really listening.

 

 

You need to go out there and catch their attention by bringing it. Show them the potential of the product or service through your own passion and delivery. Catch their attention by being energetic and exciting them about your business.

 

 

Connect The Dots

 

3 minutes isn’t a lot of time. However, investors want to know what personally drew you to the product or service that you have created. You should take 30 seconds to give them a brief summary of your background and how it led to the creation of what you are presenting.

 

 

If you have a compelling story or reason why you created the business, you can really emotionally appeal to the investors. At some point, you need to make a connection with the investors on a personal level because that’s what really sells them to invest.

 

 

Say What You Do, Without Saying It

 

One of the biggest reasons why entrepreneurs do not walk away with an investment in 3 minutes is simply because they cannot simplify their product or service. When you have 3 minutes, it should not take you more than 1 minute to clearly summarize what your company does.

 

 

You don’t need to tell them every nitty gritty detail about how things work. You simply need to address the need or problem in the world and give a clear answer on how your business solves that pressing issue.

 

 

In your 3 minute pitch, you need to answer many different questions that the investors want to know. You cannot bore the audience by explaining everything about your product or service. Keep it short, sweet, and most importantly, simple.

 

 

Talk Numbers

 

If you have ever watched Shark Tank, you know that investors love money. They want to know why their investment in your product is going to net them a large return. You need to talk numbers, show statistics, and give factual data that backs your presentation.

 

 

The best way to talk numbers with an investor is to give them the numbers that matter. They don’t care about the problems you have faced, they want to know how long your business has been out and how much revenue/profit you have generated.

 

 

If your business is an early stage company, don’t give them profit or revenue numbers. You may want to talk about things like a ‘patent’ that you may have on the innovation or the size of the market, which would make it appealing to investors.

 

 

At the end of the day, the investors are sitting in that room listening to you because they want $10 back for every $1 they give you. While most companies cannot net them a large return like that, they need to believe that your company is different.

 

 

Data is the biggest way to move an audience. If you can shock the audience by providing factual evidence that really backs your product, you have a better chance of walking away with an investment.

 

 

Think Past Today

 

Investors care about the future, you should too. Stop flexing your muscles and saying what you have already accomplished. The money that you have made will not make the investors any wealthier.

 

 

They want to know what your exit strategy is, future plans for growth, and how they can trust that your business is stable. You need to show them in less than 30 seconds that you have put considerable thought into the future and how you will leverage it.

 

 

Investors want to know they are making a secure investment. The greatest way to show security is to prepare a plan for the future. If you can show the investors you not only have a plan for the future, but you can bail them out if things do fail, their chances of investing are much higher.

 

 

Scale or Fail

 

If your business cannot scale fairly quickly, you have a lot of issues. Investors want businesses that can scale rapidly. You need to show your investors in about 15 seconds that you have plans for using their investment to scale the business.

 

 

One of the mistakes I made during my presentation was focusing too much on how their money would be used to sell what we have already created. However, one of the investors told me he would have been far more interested if I could have shown him ways to scale the product within the next 6 months using his money.

 

 

If a product is not scalable, it’s a very risky investment. Risky investments are the last thing investors want to make unless the numbers are really favorable. Before you begin pitching, create crystal-clear ways to scale your product or service.

 

 

Punch Line

 

At the end of your presentation, you need to do two key things. First, you need to tell them how much money you are asking for and what equity you are willing to give them. Before you value your business at a ridiculous amount, be realistic.

 

 

Investors know what your company is worth and so do you. Don’t go into an elevator pitch unless you are serious about acquiring an investment. If you’re business is worth $100,000 and you’re looking for a $40,000 investment, expect 40% of your business to be taken.

 

 

It’s real simple math. The biggest reason why investors say no is because the entrepreneur tries to rip them off. Before you go into the presentation, know how much money you want, what you will do with their money, and what they will get in return.

 

 

Lastly, before ending the presentation you need to drop a punch line. Something that will make them remember you, your product, and why they should invest in you. Everything you have said for the last 2 minutes and 50 seconds is splendid, but the last thing you say needs to keep them up at night for not investing in you.

 

 

The last thing you say on the stage is what everyone will remember about your presentation. Finish strong and give everyone something to think about after you leave.

 

 

Conclusion

 

Walking away with an investment in 3 minutes is really an art. It’s more than just being a great salesman, you actually have to show value in what you say.

 

 

If you’re serious about locking in an investor in a short pitch, you need to employ a lot of the strategies mentioned above. You may not be successful the first few times because it takes a lot of practice to become good at pitching.

 

 

However, using the techniques mentioned above and a ton of practice, you can get an investment in less than 3 minutes like many others have. Good luck!

 

 

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