The Elevator Pitch

An elevator pitch is a brief summary of your business idea to an investor. It is called an elevator’s pitch because the time required to deliver the pitch is within the time span of an elevator ride (say, thirty seconds to a minute). The application of the elevator’s pitch is to convince an investor to fund your business. Within that moment, the investor will probe you and judge your idea and team based on the quality of the pitch. If the investor is convinced that your idea is worth pursuing, he or she will grant you a meeting to take the discussion further. So what should you say within that one minute to attract your investor? Here are some tips to help you do that.

The way to make the most efficient elevator pitch is to start with the following constraints. Imagine that you find yourself in an elevator with a potential investor for your startup company, you are only given sixty seconds to pitch your idea. If you are scientific about the whole thing, a minute pitch is approximately 150 words, which can be condensed into three short paragraphs. The cardinal rule for such a pitch is to be straight to the point and never repeat yourself. In reality, there exist cases where elevator pitches can be more than a minute. In some networking events, there exist a pitching session where a few entrepreneurs are selected by the event organizers to pitch their ideas without powerpoint slides.

So, why is the elevator pitch important to an entrepreneur? This can be answered from two points of view. From the viewpoint of an investor (venture capitalist or business angel), he is tired and irritated of getting a hundred people telling him their grandmother stories about their business idea. The investor is convinced that if you cannot explain your business idea simply and elegantly, it means that you cannot sell your idea to potential customers. Someone once tell me that if you cannot explain the theory of everything to your grandmother in the simplest fashion, it is a failure on your part not to sell the ideas properly. For the entrepreneur, it’s also a test in persuasion whether you really know what you are selling. It condenses your product, idea or business into a simple pitch and help you focus what is important to your team.

Some people term the elevator pitch as a shortened executive summary. Here is how they will break up the entire pitch into. First, you tell them the problem and opportunity for a business idea. That can come in the form of a statistic, for example, “Do you know five out of ten women buys clubbing wear?” or a problem, “the nuclear power industry has the problem of removing nuclear waste that will cause harm to the population living around there.” Once you set the stage, you throw your idea or product as a solution to the problem. By presenting that, you construct to your investor in how you can use your product to exploit the market opportunity. After that, the next part is to tell your investor who your competitors are and what is your competitive advantage against them. Finally, you just have to state the total funding required and exit strategy. In some cases, you also give the valuation and equity offered to the investor. However, these are secondary to the investor.

There are a couple of things to bear in mind for an elevator pitch. Let’s start with the best practices first. You should always begin and end with your name, for example, “I am Ben Goh, from (your company name). I will like to pitch an idea to you. (start the ball rolling from here)” and “if you are interested to invest in us, please contact me at bengoh@email or refer to this homepage url.”

You should also incorporate a memorable phrase or image to your investor. Using taglines to brand your business idea or product helps to create the impression in the investor. It also gives the investor some idea on what your business is about. You need to make sure that your investor knows what are the benefits in the investment. Of course, personality plays a part. You should be passionate, tangible and diplomatic. I included diplomatic for situations when an investor just shut the door on you.

Of course, there are the things which you should not do. First, do not go beyond sixty seconds. Second, do not be the solution that is in search of a problem. You should never use jargon like “optimization algorithms and Monte Carlo methods”, “polymerase chain reaction (PCR)” or “silicon tetraoxide” to explain technology nor give a detailed description of your product. You should just say, “The technology we develops solves the problem (which you have mentioned earlier).” or “Using the state of the art technologies in quantum devices, our product does (describe what it do) this”. Of course, you must not use long sentences. Finally, you should not stop or go back. If you make a misake, just carry on. If you convince the investor, he will ask you to clarify further.

With all these notes in mind, here are my last words to you. Once you have your elevator pitch ready, you should practice it out loud to your family, friends and fools. If you are shy, do it in front of a mirror a hundred times. You should time yourself and see how how you can deliver with poise and style. For safety reasons, always keep the executive summary in the form of a folded A4 paper in your pocket. Just in case, your investor is interested, you know what to give him.

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