Nailing Your Pitch to Investors – Sales and Marketing

Raising capital is a difficult and time-consuming process, but it can be made easier with proper preparation.  As a start-up team pitching to investors, knowing what investors are looking for and understanding their expectations will improve your chances of landing your next financing.  One of the most critical aspects of an investor’s due diligence is a thorough vetting of the company’s sales and marketing strategy. No company can survive without attracting customers who value their product or service and who are willing to pay for it. Once there is confidence that the company has a viable product and traction with its target audience, one must consider how it attracts new customers, retains the existing customer base, and develops plans to increase its market potential and revenue streams.  

Sales include the “operations and activities involved in promoting and selling goods or services,” and marketing includes “the process or technique of promoting, selling, and distributing a product or service.” Sales and marketing are about building relationships. The two functions work hand-in-hand, and this inter-dependency is a critical component of a company’s success or failure. Gary Vaynerchuk summarized the importance of the sales and marketing process saying, “No matter what you do, your job is to tell your story” continuing, “the brands that connect with clients in a real way, will win.” 

Below, we go into greater detail on the questions that investors are likely to ask and how well prepared start-ups can address them. 

MARKETING – Telling your story.  

Your start-up must have a clear and developed vision who your customer is and how you will reach them. What is your story and how are you presenting that to your audience? Does the company deliver a unique value proposition? What is the competitive advantage and how does the company ensure their target audience is aware of it? Is there an understanding of your customers? What resources and data are being relied upon to instruct marketing plan and strategy?   

The tools and technology available in the 21st century allow companies to leverage data to be in constant contact with customers more than ever. The accessibility to your customers and customer data highlights the importance for companies to create a lasting and memorable customer connection.  Paul Graham, co-founder at Y Combinator said, “Your users are your guidepost. And the way you stay on the right path in the early stages of a startup is to build stuff and talk to users. And nothing else.”  

Things to Assess  

• Go-to-market strategy is one of the most important documents to analyze. The go-to-market strategy utilizes inside and outside resources to deliver a unique value proposition to customers and achieve competitive advantage.  
• Does your Marketing Plan include:
  • Buyer understanding
  • Sales 
  • Metrics used to achieve or track customers  
• Marketing costs 
  • Campaign costs, marketing expenses per year 

Questions to Analyze  

• How far along are you in the go-to-market strategy?  
  • Are you addressing the right questions? Are you reaching the right markets?  
• How many channels are you using?  
  • Which channel is most lucrative?  
• What type of marketing activities are you currently performing? 
  • How satisfied are your customers/trial customers?

Customer Strategy Worksheet Example 

Audience Goals Example 

Marketing Strategy Worksheet Example 

SALES – Keep ‘em coming back. 

Who has bought in? Who should be? Who keeps coming back for more? Data drives sales and sales drive businesses. Who is in the sales pipeline and how do we ensure they keep coming back? Are we tracking customer interactions with the company? If so, how? Why were they attracted initially and how has their interactions with the company grown over each stage of the buying cycle?  

Things to Assess  

• The distribution process discusses how the company plans to get their product/service to the end users 
  • Analyze the distribution strategy and determine if you are pursuing the most reliable or best option
• Review the sales timeline to see the evolution of onboarding customers 
  • Early adopters vs late adopters  
• Sales Pipeline Snapshot: listing growth of pipeline, number of clients within pipeline, and where each client sits within pipeline.  
• Sales drive: tactical activity plans, quantifying actions, timing, and accountabilities.  
• Sales costs 
  • Sales expenses

Questions to Analyze  

• Do you have a sales model outlining how you plan to drive sales?
  • Including components such as expected sales each month/quarter, break down by # of deals and deal size, pipeline showing path towards sales goal, expected sales cycle length.  
• What resources are you using to generate leads?  
  • Inside and outside resources? If outsourcing, how attainable are these resources?  
• Is your sales strategy maintainable overtime?  
  • Are the sales strategies focused?  
• What is the financial requirement and how much does this vary YoY?  
• Buying cycle: Are you tracking customers and their interactions with the company overtime at every stage of buying cycle?  
• Are there any open contracts with clients?  
• How long does it take to onboard or get a client?  
• Do they have any running LOIs from Potential Customers/Clients?   
• What sales agreements do they have active?  

This page was written by Aron Baigelman and Jeffrey Camp. Mr. Baigelman is a member of the Cane Angel Network investment team and is pursuing his MBA at UM graduating in 2021. Mr. Camp is the Managing Director of the Cane Angel Network.