Making demos less prominent in your VC pitch may be more effective than you assume.

When it comes to pitching your company to investors, a demo can be a powerful tool to showcase your product and connect with the audience. However, as we’ll explore in this article, there are situations where a demo may not be necessary or even effective.

The Problem with Demos

Demos can be high-risk, low-return activities when trying to convince someone to invest in your company. There are several reasons for this:

• Time-consuming setup: Connecting to Wi-Fi, dealing with firewalls, and ensuring that everything is working smoothly can take up a significant amount of time.
• Privacy concerns: Using live customer data may not be feasible due to privacy issues. This means you’ll need to use demo data instead, which can limit the effectiveness of your demonstration.
• Difficulty in demonstrating complex features: Certain products or services might have aspects that are hard to demonstrate through a pitch.

A demo’s potential for going off-track is substantial, and if you’re unable to handle issues as they arise, it could negatively impact your chances with investors. Moreover, your target audience may not fully appreciate the value of what you’re pitching.

Understanding Your Audience

When preparing for an investment pitch, it’s essential to understand who you are presenting to. Investors are more interested in the potential future growth and profitability of your company than its current state. What they care about is where you’re going and how profitable that will be.

You can’t show investors a demo of your product’s future plans, but you can paint a vivid picture of it using mock-ups and discussing why this version is what customers want and the markets it will unlock for you. This approach is often more effective than trying to demonstrate the current state of your product.

Delivering Your Pitch

When delivering your pitch, remember that investors care about the future growth potential of your company, not just its current state. A video demo can be useful during the diligence process if an investor wants a deeper understanding of your product.

However, in most cases, a simple screenshot or photo, accompanied by a brief explanation of how it fulfills customer value proposition and differentiates you from competitors, is all that’s required. This approach saves time and helps keep the focus on the future growth potential of your company.

Pitching Effectively

When pitching to investors, remember that they are not necessarily experts in your field. They want to know how your product will change the world and generate profits. Your pitch should be about the future: what you’re going to build, markets you’ll enter, customers you’ll attract, and all the ways you’ll make a difference.

The key is to communicate this vision clearly and concisely, avoiding technical jargon and focusing on the benefits of your product or service. By doing so, you’ll be able to effectively convey the potential of your company and increase your chances of securing investment.

Conclusion

In conclusion, while demos can be a useful tool in a pitch, they are not always necessary or effective. Understanding your audience and delivering a clear, concise message about the future growth potential of your company is crucial. By focusing on what investors care about – the future of your business – you’ll increase your chances of securing investment and taking your company to the next level.

Additional Resources

• "The Art of Pitching" by Haje Jan Kamps (Author)
• TechCrunch AITechCrunch’s AI experts cover the latest news in the fast-moving field.
• TechCrunch SpaceEvery Monday, gets you up to speed on the latest advances in aerospace.

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