Imagine the scene: you’re visiting a friend’s office and as you enter the building’s elevator, you recognize British entrepreneur and billionaire, Richard Branson. You have a great business idea to share with him and you’d love to get his financial backing. What do you say?

In order to raise capital for small businesses, business owners need to get comfortable with making elevator pitches. Simply put, an elevator pitch is a tiny speech (short enough to tell someone during an elevator ride – hence the name), that serves to persuade someone to take an action. When done correctly, elevator pitches excite investors and persuade them to give up a business card, schedule a more detailed meeting, or if you’re really good, demand to put capital into the business right there on the spot. There are a few principles to follow in order to create a content-rich, compelling, and persuasive elevator pitch.

1. Keep It Short

First and foremost, the most important part of an elevator pitch is the obvious – keep it short. Just because you find every aspect and detail of your idea fascinating, doesn’t mean that your potential investors will. Think long and hard about every component of your elevator pitch and assess whether it is really helping you make your case. Not every pitch is going to happen in a time-pressured environment, but people with money tend to be busy so think short. If possible prepare two pitches – one around 30 seconds, the other, more detailed but still lean, around one or one and a half minutes. You can then assess on the spot which one you have time for.

2. Differentiate the Business

Investors are impressed by business owners who know exactly what the business does, who it serves, and most importantly, why it is (or is going to be) the best business of its type. Again, it’s important to be as specific as possible here. And, whatever you do, be confident in your proposal (you must walk the fine line between confidence and arrogance, but no one has ever gotten anything by playing down their skills). Sell yourself and your business to the fullest extent possible. “I think I’m good at helping people with their math homework” is just not going to grab an investor’s attention. Compare it to something like this below:

“My business offers the most individualized math tutoring available for high school seniors in danger of not being able to graduate. We take the entire student – his or her personality, interests and emotional needs – into account when designing a comprehensive tutoring program.”

3. Talk About Your Track Record and Proof of Future Demand

In the best case scenario, your business is thriving and you can point to pools of money forming at your feet and huge potential for more growth – if only you had the capital to expand. In reality, aspiring entrepreneurs and new small business owners often lack concrete sales to point to. The good news is this: a lack of assurance of this kind is the price that investors pay for dealing with this type of investment. If they wanted to invest in a 100% sure-fire, well-proven business with demonstrated full-proof year-on-year growth, they would look to the stock markets. In reality, risk is part of the game when investing in small businesses (especially restaurants), and your job is to sell people on the dream as much as it is on the numbers.

That being said, serious investors will respond well to concrete proof points about the current success of your business – or the proven demand for your product. As such, your elevator pitch should include at least one clear factual statement that backs up your potential. Examples include well-established or famous clients, strong growth statistics, incredible operating margins, or even something as seemingly unrelated as a huge online following for your food/fashion blog. If we continue the math tutoring example from above, imagine that this business doesn’t exist yet but that the tutor in question has a popular online blog on educational outings in his local area. His pitch could be something like this:

“My business offers the most individualized math tutoring available for high school seniors in danger of not being able to graduate. We take the entire student – his or her personality, interests and emotional needs – into account when designing a comprehensive tutoring program. I am confident of demand for this service because I run a popular local blog on educational outings for children and I have over 5,000 visits per month and a mailing list of over 18,000 local parents. I emailed this list about my business idea and secured a $50 deposit from over 500 parents who wanted to reserve a place for their child.”

Note: If you have prior experience in the field, or have previously set up successful businesses, you definitely want to include that here too.

4. Be Specific

Investors are guaranteed to be turned off by vague requests for “a lot of capital” or “some money to build my business with.”

These generalities suggest that the business owner hasn’t done his or her research. If you have ever watched Shark Tank, you’ll recognize that investors want a specific number and they want that number to be clearly tied to a specific, concrete purpose. Again, compare “I’d like some money please” with the below statement:

“My business offers the most individualized math tutoring available for high school seniors in danger of not being able to graduate. We take the entire student – his or her personality, interests and emotional needs – into account when designing a comprehensive tutoring program. I am confident of demand for this service because I run a popular local blog on educational outings for children and I have over 5,000 visits per month and a mailing list of over 18,000 local parents. I emailed this list about my business idea and secured a $50 deposit from over 500 parents who wanted to reserve a place for their child. I’m looking to raise $100,000 for commercial premises, permits, staffing and the necessary computer equipment.”

Note: There is some disagreement about whether or not to include this kind of clear request for financing in an elevator pitch. As the old fundraising adage goes, “Ask for money and you get advice; ask for advice and you get money”. At the end of the day, you’ll need to feel out each investor – and each situation – on a case-by-case basis. Some investors will respond well to this kind of upfront approach and you’ll disqualify a great many investors for whom the amount or details are off-putting, so there is a definite benefit to this kind of “blunt” approach.

5. Why Them?

One final key element to remember is that this pitch is not just about you. It’s about getting the investor to feel, well… invested in your business. They need to know why they would be a perfect fit for your business – why it is that “out of the all the elevators, in all the world, you’re so glad you walked into this one”.

In reality, this insight often comes down to research. Make sure to thoroughly research the landscape of investors who may be right for your business. Often this won’t be as daunting a task as you may think. The number of qualified investors in Colorado who regularly support new quick service restaurants is smaller than you might think. What’s more, these groupings can be surprisingly tight-knit, so with the right people-focused approach to fundraising, you should be able to inform yourself pretty quickly.

6. The Call-To-Action (CTA)

As any marketer knows, all the content in the world is worth next to nothing if you don’t follow with a clear call to action.  You need to tell your investor what action you’re looking for him to take. “I’d love to send you an email with the details of my business plan” or “I’d love to schedule a meeting with you to speak with you in more detail about my business plans”. The right CTA will be, again, situation-dependent, so think through the best next step and make sure to have a plan ready.

Here’s the full pitch for our math’s tutor friend:

“My business offers the most individualized math tutoring available for high school seniors in danger of not being able to graduate. We take the entire student – his or her personality, interests and emotional needs – into account when designing a comprehensive tutoring program. I am confident of demand for this service because I run a popular local blog on educational outings for children and I have over 5,000 visits per month and a mailing list of over 18,000 local parents. I emailed this list about my business idea and secured a $50 deposit from over 500 parents who wanted to reserve a place for their child. I’m looking to raise $100,000 for commercial premises, permits, staffing and the necessary computer equipment. Given your track record in this kind of service business, I’d love to get your advice and support. Would you be free for a coffee at some point this week?”

Remember, your elevator pitch doesn’t have to cover everything. It just has to do enough to secure further interest. There are a million questions that an investor will have for you before they’ll consider any investment – and you’ll need answers for them all. For example: how and when do you intend to provide an ample return on investment? What financial statements do you have available? Who else is investing/has invested? The good news is that if you’re hearing these questions, it’s because you’ve made it over the first hurdle – you piqued their interest.

About the Author

Yamarie Grullon has years of experience creating helpful & engaging content for small business owners. As Manager of Content Strategy at ShopKeep, Yamarie provides merchants with practical advice on all things related to their business or their POS system.