How explainer video can help you to raise the investments

Many startupers these days consider pitch decks as boring documents that should be as eloquent as possible.

For years entrepreneurs that wanted to raise an investment had the ability to write their own “Ulysses”, but only for investors. However, investment funds, business evangelists, and private investors are unlikely to read all that you’ve written to make them give you money.

They are looking for rather pressed information that can show only key points.

So your pitch deck has to speak for itself, but it also has to be rather concise.

What’s a good pitch deck consist of? 

What do you need to prepare to qualify for funding on LinkedIn?

• Founders’ profile. You need a classic photo, a resume, and… a lot of contacts. Yes, this is a sign of trust and a clear fact that you have a big network which is also super important.
• Get active on the platform – add contacts, make posts, reposts and comments.
• Subscribe to Sales navigator;
• Don’t forget about crunch base.

“What qualities do you look for in seed-stage founders? What are you looking for in the idea or pitch?

Self-awareness. There are so many unknowns at the seed stage — who the target customers are, what to build first, who to hire next, how to think about pricing — and the founder’s role is to put the best team on the field and empower them to answer those questions. Understanding your own approach as an operator, along with the strengths and weaknesses of the market, gives you the flexibility to adapt and make better decisions.”

George Robson, Sequoia Capital

A good pitch deck should cover all the questions that may arise in the investors’ heads. Let’s take a look at them.

The aim of your product or services. What is the answer your product has to offer? What pain points do your customers have? How do they relate to your product?

Solutions. Well, this point kind of stands for itself.

TAM-SOM-SAM.  A few metrics will show the size of your market.

Is now really the right time? The market isn’t in the best shape now, and often, depending on the niche, it has ups and downs. Your goal is to persuade investors that your project is important right now.

Product and its features. Well, what exactly do you want to launch?

Business model. What is your preferred way of monetization, and planned partnerships, and how you are going to scale the project?

Team. This an extremely important point, because, your team and its strong sides can make or break your chances of getting the investments.

Roadmap. At this point, you describe how you move and how you plan to move further in development, marketing, and business in general.

Cap Table. This represents your expectations for the investment in the project with the interest that you will have to give back.

Explainer video. The best way to show what exactly you want money for is without writing 500 pages.

“What do you love about partnering with seed-stage founders?

Prior to Sequoia, I spent most of my career as a product person. I love the “zero to one” journey — ideation, finding the first design, seeing the first paying customer. Working with seed founders lets me relive the highs of this phase.” 

Bogomil Balkansky

What kind of explainers can be used to pitch investors?

If you are creating a mobile application you can’t pitch without an explainer video. Actually, most of the projects nowadays understand that without a video explainer your idea might not impress funds or private investors.

Let’s take a look at the types of videos that are the best for pitching investors.

“A business pitch is a persuasive argument that an entrepreneur uses to convince a person or organization to invest in a business idea. There are many business pitches—from an informal “elevator pitch” (a short sales pitch no longer than 20–30 seconds or the length of a short elevator ride) to an hour-long slide presentation. A business pitch should be clear, concise, persuasive, and attention-grabbing, highlighting your company’s value and the product or service you sell.” 

Daniel Pink

NYT-bestselling author 

Short video — not too short though. In a short video, you should keep everything under 1 minute, but it really depends on the product you have. If its features require more than 1 minute – this type isn’t for you.

Medium-long video — 2-3 minutes and you’ll be okay. This is probably the best type of video in terms of duration. This is enough for investors and for you to explain the idea behind the product.

Long video – more than 5 minutes. Only for exceptional cases, but this should not be your main choice.

What kind of tone of voice should you implement?

This really depends on the type of your product and its inherent atmosphere. But really we suggest very light, subtle humor and a professional tone of voice with a proper voice-over artist.

One more thing: don’t ever send a link to download a video. Or the whole document, for that matter. It is just a bad tone.

“Thanks to the visual and running nature of the video, you can show off the benefits of your product or service first-hand, such as with a brief product demonstration or a walkthrough of your software. This helps people see what they’re buying and will put many of their doubts to rest.

 Explainer videos also give you a chance to prove your value as a brand with visually represented statistics, video testimonials, or the mention of some big brands you’ve worked with.”

John Rampton, entrepreneur, investor

 

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How to use an explainer video for pitching?

The best way to use an explainer video for pitching is to include a link for it in your pitch message.

However, where to post it, you might wonder.

Here are a few best ways:

How To Pitch Venture Capitalists

Usually, these investors are more detail-oriented, and they will definitely ask you about the numbers.

So, focus on details, and metrics, and add more infographics — show that you have explored everything related to your future product.

How To Pitch Angel Investors

Angel investors are a network that acts like an investor.

They are prone to act much quicker, and turning to them is a good decision in a pre-seed stage.

When pitching to angel investors, remember that they need to see the whole picture, and they are less interested in the specifics.

Why an explainer video works better

“Why do I need a video for pitching at all, and why can’t I just tell investors about it by myself?”

Many investors refuse to include an explainer in the pitch because they think no one would be better at explaining the product. No one is arguing with that. A founder will talk and will talk a lot. But an explainer video is concise and pressed information of the main information and its illustration through infographics, statistics, facts, and analysis.

It doesn’t take long – up to 5 minutes is enough, but mostly you don’t need more than 3. A voice-over artist is a vital factor that with just the magic of his or her voice will direct investors attention to the right path.

Animated videos are perfect to represent complex startups because they make it possible to clearly articulate the meaning of your project in 1 or 2 minutes and keep potential investors focused on the information they’re getting. You can easily present a large amount of information, explain complex concepts, or introduce novel ideas without wasting a lot of viewers’ time.

Video pitches require a serious, data-driven approach. Still, the animated video allows you to structure important information about your product or service in the most efficient way and pack everything into a brief and entertaining piece of content. Moreover, you can easily break even the most complicated concepts down into short scenes that explain information in an easy-to-digest form and combine audio explanations with visual support.

Comment from Robert Weiss 

According to research, people are more likely to be convinced to buy a product after watching an engaging video that tells a story and entertains them. Pretty much the same goes for videos that pitch investors and allow them to look at the project from the correct angle.

Creative animations evoke an emotional response and make difficult concepts much easier to understand. They give you a chance to prove your worth with visually represented statistics. Many investors admit that they find it easy to make a decision if they saw a video without long text but with an inspiring representation of how a business idea can really change the game on the market and influence the everyday life of a lot of people

“After a pitch, it’s good practice to follow up with the investors within 24 hours of the presentation to see if they have any additional questions or concerns and to receive any feedback they may have to offer you. A brief email or phone call will help remind them about you and your idea and show you’re serious, making them more amenable to finally deciding to invest.” 

Daniel Pink, NYT-bestselling author 

A few mistakes to avoid

• Never pitch your perfect investors first;
• Before sending a pitch deck and a video, create a short four to five-sentence introduction – a script message basically-  that helps to understand your company;
• Review other pitch videos;
• Make competitive research;
• Properly tell about your team and its experience.

Summary

Even if you have a solid business plan and an innovative product, finding the right investor can be a complicated process. If you want to attract people to your startup idea and convince them to make an investment, video is a great medium for your message.

People love visuals, and animation helps you explain everything that you do more effectively and present your key points more clearly and concisely. That’s why many startups use animated videos as part of their investor pitch decks to raise capital.

These days newly founded projects always stumble upon the need in an explainer video when they pitch investors. If you are planning on raising investments, don’t wait around — contact us to nail this task for you. We have vast experience in creating startup videos and explainers that helped our clients to raise money for the project.

We are waiting to help you, too. Contact us right away!