Investors are very time poor, and this means as a founder looking to raise capital or secure funding for your startup or small business, it’s imperative to grab their entire attention (and hold it!) while you tell your story. And what better way to do this, than with a video?
Kickstarter statistics have shown that a project with a video is 147% more likely to reach its funding goal, than a project without one.
When investing in businesses for equity, investors are effectively betting thousands of dollars on your team and vision. The stakes are bigger, so your Pitch can’t just be good: you need to know it out of the park to inspire confidence in investors.
A great pitch video will help you capture potential investor attention, and not only get them excited about your business, but confident in you and your team.
Why make a video?
Why is there such radical difference between the success rates of capital raises with videos and those without? Differences in capital raising success rates can be attributed to a number of varying factors.
- A video, especially one featuring you and your team, helps investors engage with your business on a personal level.
As humans, we are hardwired to respond to faces, emotion and other people. By showing a human element to your business you can begin to establish a relationship with potential investors, and engage them with your vision.
- A video confers legitimacy to a capital raise.
Putting not only your name and brand, but your face, to a capital raise makes the project appear much more legitimate to potential investors considering giving their money to a stranger.
- A video requires full attention, so investors will engage better with them.
A good video can command an investor’s full attention for as long as they’re watching. This means that you have an opportunity to sell the idea of your business.
- A video demonstrates your committment to the raise and the business.
Your video and your Pitch is a direct reflection of your business. A well produced video will prove to investors that you’re serious about raising capital, and serious about building and marketing a great business.
What does your video need to have in it?
The purpose of your video is to get investors enthused about your capital raise, and so needs to address a couple of key areas. Your video isn’t a traditional kickstarter video: you’re not only selling your product or service, but your business model as well.
Think of your pitch video as a compelling executive summary, in video form.
- Your 'why' - the problem, and your solution
Outline why you started the business, your passion and your vision. Doing this as a story can create a memorable experience that investors will remember, and help them connect with your brand.
- The target market, and your unique selling position (USP)
Next, talk about who your target market is, and why you think these people will want your product or service. Discuss your USP (your ‘unfair advantage’) and how that will help your business succeed.
- Market Opportunity
Make sure you clearly communicate to investors the market opportunity, and how your business is uniquely poised to take advantage of it.
- Sales, Revenue and Business Model
Briefly discuss how you plan to make money from your distinctly competitive product or service. This is especially important for those startups with unconventional business models.
- Traction - Customers and Patents
Talk about what traction you’ve already experienced. Discuss any large milestones that show that you’re onto a winner, such as customers and sales. Also mention any partners or mentors who will add credibility to your business.
- Use of Funds
Discuss what the money you’re raising will be used for. Knowing there’s a plan in place, investors feel comfortable their money will go a long way and ensure more traction!
Now you know WHAT your video needs, let's talk about HOW to go about it.
- Put some effort into the production of your video:
Your video doesn’t need a million dollar budget, but it should be professional and high-quality. Smartphone cameras just won’t cut it anymore.
- 90 seconds is golden for a Pitch video:
A minute and a half is the optimal length for communicating with time-poor investors. Aim to get your investors interested, you want them to get back to you with a list of questions, begging for more info.
- Make your thumbnail interesting:
The best video in the world is no use if nobody is inspired enough to click ‘play’.
- Use YouTube annotations to guide your audience to the Pitch:
YouTube is one of the best tools around for getting investors to our Pitch. Use pop-up annotations and citation transcriptions to get maximum bang for your buck. Here’s how we use annotations to keep viewers engaged:
Delivery Method 101
- You're the star!
When investing in a business, investors are not only placing their faith (and money!) in the idea of your business, but also the team behind it. Starring in your own video and connecting with investors on a more personal level will help them trust you.
- Professional, but not boring.
Investors are, for the most part, largely investing in their free time as a side-project or a hobby. They don’t want to sit through another boardroom presentation. Make your video professional, but also exciting and inspired.
- Be true to your culture.
You’re not just looking for a dollar, but rather, you’re searching for a long-term partner. A good investor will need to work alongside you, so you should give them a good sense of company culture.
- Call them to action!
A pitch video with no call to action is simply entertainment (or more likely, an advertisement). End your video with something like, “come and learn more about our journey” and an interactive link or button to take them to your site, to convert viewers into investors.
I hope you enjoyed this brief overview on how to create a killer Pitch video! Remember, for an in-depth guide to curating the best Pitch videos you’ll ever see, you can download the full eBook here for free.