The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What’s the best way to pitch a startup idea to investors?” is written by Ryan Emmons, founder of Waiakea Hawaiian Volcanic Water.
Growing up, my mother always talked about the “you factor.” When we had guests over for dinner, she’d say, “Practice the you factor.” Before a job interview: “Don’t forget the you factor.” And when the time came for me to pitch my brand to investors, she didn’t have to remind me anymore. Of course I was going to practice the “you factor.”
People love to talk about themselves. By asking individuals pointed, personal questions, you put them at ease and establish a more comfortable dialogue. This strategy has been especially useful in my fundraising. When you start by allowing investors to discuss themselves, you break a barrier that positions you favorably and proves you’re after something much more substantial (and real) than their money.
It’s helpful to remember that investors invest in entrepreneurs—not just ideas—so being able to establish a relationship with great conversation is extremely important. But a stuffy conference room is no place to build a relationship. One of my most successful pitches took place in an ordinary beachside coffee shop. The casual atmosphere innately made the meeting less pressured. I of course began with the “you factor,” asking my potential investor about his interests, his thoughts, and gaining an overall understanding of what he found to be valuable in life. What he didn’t realize was that in those five minutes of discussing himself, he was essentially revealing to me exactly what parts of my startup would resonate with him most.
When the moment came for me to pitch my brand, I knew he was a numbers man, that he valued organization and brevity, and that honesty was of utmost importance to him. Following his lead, I kept my pitch brief, I made statistics and data the focal points, and when he asked me a question I wasn’t prepared for, I didn’t scramble for the first response I could think of. Instead, I was honest and told him I did not know the answer at the moment, but promised to get back to him with the proper information later that day. That evening, when I called him to follow through on this promise, I learned I had just gained a game-changing investor for my company.
To really seal the deal, utilize visuals whenever possible. Many times, the investors will find it difficult to truly grasp a concept until they see it in person, or in a similar format (like video chats or photos). That’s why it’s always smart to have a minimum viable product to demo. Demonstrating your product effectively will help you to leave a lasting impression, and that is what this is truly all about. At the end of the day, when your potential investor goes home and kicks off his or her shoes, you want to be top of mind. Again, investors are investing in the entrepreneur more than the idea. If they think back on your pitch as not only informative and accurate, but also genuinely enjoyable, then you’re most certainly going to get those funds.
Born and raised in California while spending winters and summers with his family in Hawai’i, Ryan Emmons gained an incredible appreciation for the environment and the active lifestyle. This, and his longstanding charity efforts in Africa, led him to begin developing the concept for Waiākea Hawaiian Volcanic Water after discovering his Hawaiian family had access to one of the most naturally healthy, pure, and sustainable water sources in the world.