One of the biggest challenges to Middle Eastern entrepreneurs continues to be funding. Luckily, as the investor ecosystem in the Middle East and North Africa slowly grows, and new organizations dedicated to supporting entrepreneurs and connecting them to funding opportunities open their doors, this obstacle is beginning to disappear.
However, competition for seed funding and other forms of investment remains stiff, and entrepreneurs in search of capital need to focus on making pitches that will win over investors. One of the most important pitches that small business owners need to perfect is the so-called “elevator pitch.” A very short explanation of the product, the elevator pitch aims to get people interested and wanting to know more in less than a minute. The following are some key tips for developing an elevator pitch that will impress investors in the Middle East:
1. Understand the purpose of the elevator pitch
If innovators look at the elevator pitch as the chance to convince people to invest in their company, then they will likely carry on for too long and lose their chance for additional conversation. At the end of an elevator pitch, the investor should not be sold on the idea. For a commitment to be made, much more information needs to be exchanged. Instead, entrepreneurs should aim for a “Tell me more!” at the end of the pitch. With this imperative, the entrepreneur then has the chance to convey additional information and make a longer, more persuasive argument that can seal the deal.
Elevator pitches can either bring an old idea to a new person or a novel idea to a known investor. Each model requires a slightly different approach. In the latter example, the entrepreneur should study the investor to learn information about what he or she likes to better tailor the pitch.
2. Walk into the situation with confidence
In the Middle East, deference can stand in the way of the elevator pitch. At entrepreneurial conferences, it is not uncommon for someone with a business idea to meet an investor and then simply walk away, even after the investor has asked what they can do for the entrepreneur. Selling an idea takes a great deal of confidence, but entrepreneurs need that drive if they hope to realize success.
When individuals meet someone who could help them, either financially or with advice, this is the time to give the elevator pitch. Because the speech lasts only about one minute, people will not feel like their time was wasted if they are not interested. More importantly, they may want to know more about the new venture. Either way, the outcome is not something to fear.
3. Make the three critical pitch points
Delivering an elevator pitch is more of an art than a science, and many disagree about exactly how to approach or deliver the pitch. Regardless of whether one chooses to make the speech interactive or make it more traditional, all successful elevator pitches include the following three key pieces of information:
- The problem the idea plans to solve—In other words, what benefit will the company produce for the customer. With this piece of information, an entrepreneur underscores to the viability of the idea. If the company has no benefit for the consumer, then it will not succeed. If, on the other hand, the idea can revolutionize the consumer’s life, it has great potential and will likely capture an investor’s interest. When conveying this information, it is important to focus on the big picture rather than getting caught up in the details.
- The solution offered by the idea—Entrepreneurs need to describe exactly how they plan to solve the problem mentioned in the first point. Entrepreneurs can claim that their product will end hunger, but without a clear and logical plan to get to that point, investors will soon lose interest. Entrepreneurs need to focus on the feasibility of their plan and pitch it in a clear, succinct manner. If the investor still does not understand what exactly the company plans to do, then the pitch was not effective.
- The call to action—At this stage, business owners point to where they are, where they want to go, and what they need to get there. Entrepreneurs should be blunt about their needs. Sometimes, individuals are looking for seed funding. Other times, they may want first- or second-round funding. This information gives investors a better idea of how much money the company needs. Sometimes, entrepreneurs are simply looking for advice or strategic partners. By making this intention clear, the investor can react appropriately. It is important to note that commitment is not the goal. Instead, individuals should look for the opportunity to follow up on the conversation.Be ready for the follow-up conversation
4. Be ready for the follow-up conversation
Because the goal of the elevator pitch is to get an opportunity to make a more thorough presentation, individuals need to be ready to do so immediately. Usually, investors with piqued interest will set a later time and date for the follow-up conversation, but some may want to have the discussion immediately. If the entrepreneur is unprepared, the investor will not take the pitch seriously. Even if the larger pitch does not follow immediately, the investor may ask some questions to judge the viability of the plan. Entrepreneurs need to walk into the situation understanding who their main competitors are, why the industry they plan to target will grow, and what protections they plan to put in place to guarantee the idea’s success. When entrepreneurs can offer quantified data, they demonstrate that they are serious about the future of their company.