Envestors: How to be a Pyjama Pitcher
Introducing the pyjama pitchers—the adaptable, intuitive and determined entrepreneurs who secure investment without ever leaving their living rooms.
Pyjama pitchers say ‘not going out? No problem!’ and successfully woo their counterparts – the armchair investors – to win the funds they need to build up the successful companies of tomorrow.
Sounds easy? It isn’t.
Being a pyjama pitcher is not about the pizzazz of your PJs, the opulence of your onesie or even your ability to strut in your slippers – it’s all about your investment proposition. When you can’t get out there and shake hands and charm potential investors, you’ve got to have a rock solid proposal that makes it clear why – out of all the deals they could invest in – yours is a one-of-a-kind, can’t-miss opportunity.
Here, we share with you the secrets of successful pyjama pitchers so that you can join their ranks and take your company to the next level.
Anchor their attention
Most businesses spend considerable time perfecting their elevator pitch, which is basically thirty seconds that sum you up and get your audience interested. Pyjama pitchers look back on the day of the elevator pitch with a nostalgic smile. Today, you’ve got to take that 30 seconds and squash it down. Investors sit in front of their computers all day, so you’ve got seconds – literally one sip of tea, one bite of a hot cross bun – to capture their attention. Once you’ve got them, work hard to keep them, because once they like the idea of your business, they are going to scrutinise the hell out of it. What you’re aiming for is a paragraph – of two or three make or break sentences – that’s so compelling, it’s going to convince them to look deeper.
Take a test run
First, take whatever you’ve written and get your children (they are bored anyway) or parents (same) to read it and reiterate it back. Don’t frown at them when they don’t understand your lingo. We see pitches all the time, and often we sit there – with furrowed brows – trying to figure out what an assay is or what ablation means. No one is going to get a dictionary out and look it up, least of all in times like these. They are just going to do something else, so it’s vital to make it clear and effortless. You should also avoid the trap of making it meaningless. Don’t tell me you’re making life better for the elderly or giving peace of mind to new mums – that doesn’t tell me anything. Explain in one clear, jargon-free sentence what you’re about. Then, you can tell me more.
Validate your valuation
Consider investors looking at deals on their computer being like online dating. They are looking for every reason to swipe left. Number one reason –a big hairy valuation. An unrealistic valuation is the Tinder equivalent of being an unabashed Comicon fan – for instance, having a fake picture or the dreaded shirtless photo. See the process as a high-risk game. Investors understand that much of their portfolios will amount to much of nothing, so help them minimise that risk by being fair with your valuation.
In the last recession, the start-ups that weathered the storm had considerably reduced valuations; the smartest pyjama pitchers will have cottoned on to the fact that a conservative – low even – valuation is key, especially when you’re seeking equity finance in 2020. The same goes for your sales forecasts and path to profitability – you’ll need draft a realistic contingency plan, such as reconsidering any expensive growth or international expansion strategies while we’re still in the grip of the pandemic uncertainty.
- Practice perfecting your pitch online
You’re going to be pitching from home. That’s great news. You’ll be more comfortable in your space which means less nerves. Assuming your dog doesn’t decide it’s a particularly good time to bark and your children don’t come charging in, you’re all set to deliver the performance of your life, but…
Pitching online is fundamentally different than in person.
Let’s get to the technical difficulties first. Web conferencing software is great, yet not perfect. There could be an echo, a delay which means your face doesn’t match your voice and the requisite recitations of ‘can you hear me now?’. All of this will throw you off.
The second problem is the vacuum effect. You’ll be pitching to people, but it won’t feel that way – you won’t be able to read their body language, gauge if they understand what you’re talking about or even if they’re interested.
Experienced pyjama pitchers know that practice makes perfect, particularly with so many disconcerting aspects to factor in. So, first you’ll need to rehearse your pitch as you normally would. Once you’ve got that down, practice online. Get an audience – any audience – and do several dry runs before you even think about going live.
Get to the point
Most people would not open a browser to do some online shopping or check their emails during your pitch – in person. Online, this is not the case. It is very common for people at the computer to multi-task so, in terms of maintaining the attention of potential investors, you’re competing with everything else on the internet. This means you need get to the point, quickly and clearly – in other words, unless you want your pitch deck to resemble a bedtime lullaby, stick to the essentials.
Begin with a very quick introduction which includes what your product is, what your current stage is (revenue generating, beta testing etc) and how much investment is being sought. If you follow the checklist below – one or two sentences to cover each point – you should be on the right track:
- Market Overview: What is the problem and how big is the market?
- What is your product/solution to point 1?
- Business revenue model: how do you actually make money?
- Traction: Who are your clients? How many do you have? Do you have a sales pipeline?
- Overview of management team: track record, sector knowledge etc.
- Competition: Compare yourself to your key competitors.
- Financial Projections Summary
- Investment Offer: How much investment are you seeking? What is your pre-money valuation? What will the proceeds be used for?
- Exit strategy: What is it and what are some examples of recent exits in your market.
Make it easy for investors
Pyjama pitchers don’t wait to be asked. They are like an intuitive spouse who brings you a cup of tea before you’ve realised you wanted one or makes you a sandwich just before you start to feel hungry.
Pyjama pitchers make life easy for investors by anticipating their needs.
So, what do investors need? They need information about your investment opportunity. Savvy pyjama pitchers have an online portal where investors can access their documents, on-demand, 24/7 – without having to request them. They don’t worry about who’s reading them, because good platforms have secure data rooms and secondary levels of security for the highest confidentiality documents. They also know what keeps investors happy once they’ve funded you – if they’ve swiped right, make it more than just a one-night stand. This means regular and honest contact, such as company updates, good news – or bad – or anything that will show them the love they deserve.
If you don’t have this already, several investment networks offer it or you can subscribe to your own. Using a digital platform will also ensure that you’re not going to cause any legality nightmares – such as being compliant with FCA regulations – meaning more time to relax in your robe and put your slippers up.
Ready to switch off the snooze button? See how we can help you here