Pitching Software to Investors

With a company that spends significant amounts of time working on websites and applications for small businesses, and an association with a few other companies doing similar work, I’ve seen a large number of projects which have lent themselves to be proposed to investors for some capital. Some were being backed by someone other than the founder, others were self-funded, some were bootstrapped.

The question I’m often posed with, though, when starting work on a project, is whether or not I would be interested in trading my time and effort for equity in their project. While my answer is almost always a form of “no”, I do think about it. The reason for my refusal, though, has little to do with my belief in the potential of the project – quite the contrary, if I’m working on the project, it’s because I already believe the project has some level of potential be successful.

My time, when unpaid for, is an investment in the work I’m doing. If you want me to invest, you’ll have to convince me of the value of your business.

The reason I refuse is partially because I don’t really want to be involved in the running of these projects, whether because it’s in an area that doesn’t interest me, a lack of time, or because I don’t want to run a business like that at all. The other reason, though, is because I listened to the pitch, and it failed to motivate me to invest.

Yes, I’m an investor – because if I donate my time, then I’ve invested the value of my time in your business. If you want me to invest, then you’ll have to convince me that it’s worth investing in.

Having prepared a few pitches over time, here’s what I would want to hear in a pitch, what has the potential to convince me of the value of your idea:

  1. Why – I want to know why you’re building this business. While money is a motivator, I want to hear a personal story of a need your business solves, something motivational.
  2. What – Now that you’ve explained why, tell me what it is you’re building, and how it solves that need you described in the preceding minutes.
  3. Who – Who else is in the market with a product that also solves the need? Show me some of the other players, how they’ve approached the problem, and why you feel there is still a need for another product.
  4. How – If you want me to put work into building the product, what are you doing? Are you figuring out marketing angles, lining up customers, working with other vendors? What’s your plan to get your product built, on the market, presented? What are you personally going to be doing on the project?

That’s not to say, of course, that I wouldn’t consider a business that lacks answers to these questions. However, if the founder is already making phone calls to vendors and can’t give at least the basics of the answers, then I have a hard time taking the founder seriously.

What does this mean to you?

If you’re thinking of an idea for a business and want someone else to help you with it, you need to motivate that person to join you in your venture. You need to pitch your idea to them as a business venture that is on the road to success. You need to realize that most people will not be as excited about your idea as you are. Once you realize this, and start working toward figuring out how to motivate someone else to join you, you will find that the quality of the ideas will generally rise as you start to really understand the implications of what it is you are proposing.