Startup tips: crafting your investor pitch

Redd Claudio

Despite what some may think, it's a good time to pursue your startup. Over the past year, many businesses have launched to serve the needs of Filipinos confined to their homes. Thousands have tapped their entrepreneurial spirit to address the challenges brought by the pandemic. In fact, according to the Department of Trade and Industry, 2020 brought the highest growth rate of newly registered businesses in over a decade.

The startup community has not only grown in size but also in funding. In the first half of 2020 alone, investments made to local startups amounted to $183.8 million, which was nearly four times the value (a 381% increase) of investments made for the entire 2019, based on the Philippine Venture Capital Report by Foxmont Capital Partners.

With an active startup community to support you and a growing base of potential investors, now is the time to lean into that passion project, or explore that business idea with your friends. Now is the time to get in touch with the startup community, to look for co-founders with a similar mindset. And once you've set up your foundation, pitching to investors might be key to unlocking your company's growth.

Important as it is, this step need not be an intimidating one. It only takes a few minutes to convince potential backers, often seasoned entrepreneurs themselves, that your business is on the right path and that they should place their bets on you.

Drawing from their experiences during PayMongo's fundraising rounds, our co-founders share their tips to sharpen your pitch. Here are some basic principles to help you organize your presentation and stand out from the rest!

Ask yourself: what stage is your company in?

When PayMongo applied to Y-Combinator, one of Silicon Valley's leading startup accelerators, they didn't even have a product yet.

"If you’re at the early stage, meaning you don’t have a product or a product-market fit yet, pitching the company when you don’t have much traction or proof is all about the team and the idea. Share a convincing story that tells investors that you are the right people with the right backgrounds to follow through with the vision and to build the product. Convince them that you have a small, even one percent chance of becoming a huge company. It’s all about narrative at the beginning," said Francis Plaza, PayMongo's Chief Executive Officer.

For PayMongo, the vision was a near-future where payments are simpler, more convenient, and accessible for all Filipino businesses and their customers. This led to PayMongo's acceptance into Y-Combinator and guided them as they launched the first version of their product a few days into the program.

"As you grow the company and you gain a few customers, you have to prove that you’re in the right market. Also, are you able to show progress and that your growth rate is sustainable?  But largely, it’s still about the founding team, the key hires, and the vision of the company. The narrative can change and evolve but it all anchors back to the grand vision of what you want to achieve, and what you aim to build as a company," Francis said.

Structure your pitch using the 3 T's

Although there are many unique ways to add clarity to your pitch (see how we raised our Series A without a pitch deck), there is a structure that you can follow when in doubt. To add flow to your pitch, turn the focus of investors to your 3T's: Team, Total Addressable Market (TAM), and Traction.

"With your TAM, you must prove that as a founder, you are looking to solve the problem of a specific group of people or a market. Even if you have the most high-tech or unique idea, if there is no addressable market, who would pay for it?" said Jaime Hing III, PayMongo's Chief Technology Officer.

Jaime also stressed that investors want to be convinced and be confident that you have a reliable team, that "the people running the company are capable of executing the idea."

"In line with the team and TAM, are you actually solving the problem with your solution? Presenting your traction will justify your solution. You can use this order for your presentation: The problem, TAM, your solution, the team, and your traction," he added.

Grab their attention with a one-liner

Jaime also said: "For the content of your pitch, it has to be straightforward. Investors are always busy."

Be concise with your presentation and build a one-liner that will let everyone understand what your company does. Odds are this line will save time for you and your investors.

“Investors are inundated with pitches. They have no time nor patience to go through a ream of slides," said Edwin Lacierda, PayMongo's Chief Operating Officer.

To get their attention, Edwin recommended finding that one sentence that captures your business.

"In our case when we pitched to our potential investors in San Francisco, our one sentence was 'We are the Stripe of the Philippines.' Since they were familiar with Stripe, it was easy for them to understand our business. Bottom line is if that one sentence can visualize what your business is, it gets you a foot in the door,” said Edwin.

Share your progress together with your vision

While it is important to present your traction in a clear and measurable way, your accomplishments are most impressive when situated within the context of your vision. Your growth should reflect how you've achieved your company's larger, more idealistic goals.

As Luis Sia, PayMongo's Chief Growth Officer, put it:

“The challenge in pitching to investors is being able to sell a high-level vision while showing real traction. Traction requires you to be scrappy while selling a vision requires a strong belief that your progress is part of a much larger narrative.” 🌱

Published date:
June 17, 2021
Sign up for freeRequest for a demo