2 min read A start-up’s ability to close an investor can make or break the company; to tie up the deal successfully and efficiently, you have to think like an investor. Understanding what an investor is looking for in a company and its end goal will help you tailor your pitch and supporting documents to appeal to their specific wants and needs. Below, we share with you what investors really want and how investors and venture capitalists make decisions. Continue reading to set yourself up for success. What Investors Really Want Most investors look for startups in which they can find a return on their investment. In the diligence and funding process, what the investor wants is not to lose all their money. Essentially, they want to reduce their risk to zero. As a startup raising funding, you can help the investor find confidence in you by showing the risk mitigation you have put in place. For each concern, you should show how you’ve mitigated that particular risk. For example, when asked: “How do we know the team will execute?” Respond with: “We’ve demonstrated execution so far with these results…” When asked: “How do we know we can sell the product?” Respond with: “We’ve sold X amount so far and will continue using the same process.” Remember where the investor is coming from and show how the risk has been reduced, even though it’s not zero. How Investors Make Decisions Entrepreneurs look at the opportunity in the deal. Investors look at the risk. Two factors help the investor decide to invest or not. The first is the worst-case scenario approach. They look at the worst-case scenario. Oftentimes, this is them losing their entire investment or being stuck in a deal for the next decade with little to no return. However, if the investor can live with the worst-case scenario, then they move forward. The second factor investors weigh when deciding whether to make a deal is reputation. How will this deal impact their reputation? Many have a standing in the community and their investor circle, and this reputation impacts how other investors treat them. They don’t want to be seen as the fool, and if the deal turns out to be a dud or even goes sideways, their reputation takes a ding. In presenting your deal to an investor, consider how the investor will view the deal and its impact on them. How VCs Make Decisions Venture Capital investors make investment decisions as a group. Therefore, you must convince the team to move forward with the deal. After the initial pitch to a VC investor, the startup meets the rest of the investment team and pitches the entire group. The team decides together to pursue diligence. With the diligence results, the team again comes together to make a go/no-go decision. The advocate for the startup makes a case for moving forward with the investment. It’s best to arm your advocate with enough information to make your case. The startup should also remember that the advocate is taking both a reputation and financial risk on the startup, which is never easy. Read more in the TEN Capital eGuide: http://staging.startupfundingespresso.com/closing-the-investor/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

2 min read Writing an Elevator Pitch In pitching your startup for funding, you’ll find many opportunities to engage investors. However, not all opportunities will provide substantial time and attention to investors. Develop an elevator pitch for those times when you have only a few moments to capture the investors’ interest. In this article, we break down the elevator pitch for you. What is it? What’s the best way to write it? And how do you clean it up to make it sound as professional as possible? Read on below to find out. What Is an Elevator Pitch? An elevator pitch is best used when engaging investors in situations where the slides are not available and the time is short. It’s useful for setting up a more formal presentation by giving the investor a reason to take the meeting. In addition, the elevator pitch demonstrates you have a startup that is worth exploring for an investment. This pitch is most often used when being introduced to an investor by a mutual connection, meeting someone at a networking event, and during online meetings when participants are asked to introduce themselves and say a few words about their company. The key to a good elevator pitch is to generate interest from the listener and make them want to learn more. Since there’s not enough time to tell the listener everything, you need to focus on two or three key points. Start with the problem you are solving and how it’s a big pain point. Then, show how you solve the problem, how it benefits the customer, and wrap up with a high-level version of your fundraising ask. You should use keywords and phrases to communicate the value propositions you have in your deal. Don’t rush the pitch, and talk naturally. Practice makes perfect. The Intro In crafting an elevator pitch, the intro is the most important part. You must grab their attention and make them want to hear more. Start with a problem and show how big and costly it is. Generate curiosity in the listener by telling them you have a solution to that problem. Finally, demonstrate your solution to the problem and the benefits that come out of it. Use numbers to strengthen your case. Numbers demonstrate your knowledge of the problem itself. Investors will ask questions, so be prepared with short, to-the-point, answers. If by chance they don’t ask any questions, then you should ask a question to continue the conversation. Best Practices Before delivering your pitch, learn something about your audience. What are their care abouts? What motivates them? Customize your pitch for your audience. Don’t try to tell them everything. Instead, tell them just enough. Focus on the benefits of your product or service and not the features, and capture their attention with a question or problem description. Describe your solution in one sentence. At the end, set up your follow-up by offering to send them more information or set up a call to discuss in more detail. Write out your elevator pitch and replace the filler words with more descriptive words. Wordsmith the pitch so it’s tight and flows well. Practice it so you know it by heart and can customize it when necessary. It’s important to take time to craft a good elevator pitch. Polishing It Off Here are some key points to consider: Start with the problem you are tackling and how big and costly it is. Make it easy for the investor to grasp what you are doing. Say what you do in just one sentence. Investors need context and will find it difficult to follow until they know what you do. Avoid telling a story in your elevator pitch as there’s not enough time. Instead, just give them the conclusion. Some founders believe the investor can’t understand the startup unless they know the technology or science behind it. Avoid going into the details of how the product works. Focus in short order on the benefits of it. Founders often suffer from the curse of knowledge. They know everything about their work and implicitly assume the investor knows more than they actually do. Read more in the TEN Capital eGuide: http://staging.startupfundingespresso.com/closing-the-investor/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group