How to pitch… and win

Looking for practical tips on how to successfully pitch to an investor?

We’ve got you covered with expert advice from Stevie Spring CBE, Chairman of the British Council, on how to get funding for your business. With so much riding on your investment pitch, you want to get it right. Especially when you know your business idea or product is spot on, and just needs financial backing to get off the ground. Yet despite the incredible wealth of talent among female entrepreneurs, our data shows the percentage of female-led companies successfully securing funding from investors is low. Way too low in fact. Of the 1.3 million UK investments our report identified, just 11.9% went to female-led companies. This compares to 66.1% which went to male-led companies.

There are various reasons for this, including the unconscious and conscious biases women face going through the pitching process. As Julia Elliott Brown, founder and CEO of Enter the Arena explains here, many male investors have made up their mind about a female founder’s capabilities before even meeting them.

This is a gender bias experienced pitcher and pitchee, Stevie Spring CBE knows only too well. A portfolio director, investor and PE adviser, Stevie Chairs both the British Council and Mind, is on the board for the Cooperative Group and is an investor/ advisor to tech scale ups Kino-mo and the ITG Group. She says, “The more data points; the more we talk about the disparity between (mediocre) male ideas being funded ahead of (better ) female ones; the more we encourage female representation into the investment teams, the more we’ll see change at pace.” When it comes to your pitch, Stevie has lots of brilliant advice which she shared on the podcast Fundraising as a Female Founder. Crucially, while many gender biases are out of your control (we’re working hard to end them through our real-time data!), there are practical things you can do to increase your success in front of an investor. Stevie says, “When people come to you for investment you’re buying them first. Whether we like it or not, first impressions count. Especially if it’s someone you don’t know. As an investor, you’re asking yourself: ‘Can I trust this person with my money and my vision?’” Here are Stevie’s top seven tips for a successful pitch…

1. Have a great investment deck Struggling to get a meeting with an investor? Then it could be time to refresh your investment deck. Stevie says, “The aim of your deck is not to get a cheque, it’s to get a meeting. So don’t treat it as a one-stop sell. Instead, leave the potential investor wanting to know more by giving them a teaser of what your business or product is. And don’t forget to have some competitive tension in your deck too – we all want a piece of what someone else wants!” She also recommends emphasising how you’ll run your business. “The world isn’t short on good ideas, but it is short on people who can implement those ideas. So add details in your deck on what you’ll do around implementation.”

2. Do your homework Just as you’ve gone over your business plan in huge detail, you need to do the same level of prep for your investment pitch. “There is no substitute for homework”, says Stevie. “It’s like doing an exam and cramming to answer 10 questions. Even if you only get to answer one, the confidence you get from understanding the perspective of the person sitting on the other side of the table is incalculable.” She adds, “If you’re making a strategic pitch, work out where you fit in their landscape. Do your homework so you can talk with confidence about how it can take the company in a slightly different way, what their corporate vision and purpose is and how what you’re proposing fits with that.”

3. Focus on the finances Knowing your figures is key in any investment pitch. Stevie says, “This is a huge generalisation but from my experience, I think men tend to understand the game better. In other words, when talking to a funder they are talking the language of investment returns, risk and leaving something on the table for the next iteration. This is another generalisation, but women often want to talk rich ideas and possibilities. This means they’re not coming over as hard-nosed spreadsheet manipulators and financial engineers which a lot of private equity want to see. This could leave investors asking, ‘Do they understand the fundamentals and have they got an eye on the money?’”

4. Be realistic about how much funding you need If you’re a start-up, it’s often a challenge knowing how much money you need from a potential funder. But nailing this figure is key… and Stevie has the solution.

“Ask for as much as you humanly possibly can without laughing! But be realistic about what you need. You might be able to get by on £500,000 for the next year but actually what you really want is a clear runway to see you through the next two years.”

Asking for the right amount will mean you can focus on your business. She adds, “We all underestimate how much money we’re going to need. Women in particular go for the lowest number rather than highest as it feels easier to ask for. But in reality it’s as hard to get £10m as it is £1m. Underfunding and continuous fundraising is exhausting, stressful and takes your eye off the ball so know how much you need from the off.”

5. Go for the right sort of funding for your business From Angel Investors to VCs and private equity, there are a number of different investment routes. But not all will be right for your business. By picking the right kind of funder, you’ll increase your chance of success.

Stevie says, “Private equity is a spreadsheet manipulation: if I invest here, I leverage up to there, I’ll exit there and I’ll get 80% of the upside. VC is: I’m going to spread invest and I’m going to back the person as much as the idea. And that’s about shortening the odds – have they done it before, have they got a success story, do they understand the fundamentals and have they got an eye on the money? Are they in an area of such high growth that even if I don’t get to profit I’ll be able to get to an exit?

An angel investor is slightly different. It’s invariably people who already know, love and trust you and will invest in you, no matter what you bring them. And the last element is crowdsourcing and crowdfunding. That’s people taking a punt and having a bit of fun but you can raise quite serious amounts of money doing that. Quite a lot of venture funds watch crowdfunding to see what happens quite quickly. It’s almost the wisdom of crowds: if everyone is piling into that maybe it’s a good idea and maybe I should take a stake.”

6. Have an exit plan Any potential investor will want to know not only how you’ll use their funding, but also when they’ll get their money back… and their return.

Understanding what sort of investment you are – and pitching yourself as that – is also key, adds Stevie. “Are you “growth stock” which might not be throwing off cash but has growth potential that means you’re going to get in a relatively short term exit and someone else takes it to profit? Or are you an investment the investor can fold into another division? Or are you an acqui-hire, with fantastic people the investor is prepared to buy through the business? Above all, remember that cash is king.”

7. Back yourself Pitching can be intimidating. But you’re there for a reason (you’ve got a great business!) so Stevie’s final tip is one of the most important… “Go in there with confidence and back yourself financially in the same way men do. I’d also like to see more female-founded businesses founded for positive reasons rather than negative ones. So rather than saying, ‘I left the workforce because of this reason and I’ve now set up my business’, emphasise that you founding your business is a positive choice.” Good luck!