These past few weeks have been very busy for me: I have been reviewing an unusually large number of “pitch decks,” both in my entrepreneurship class and through the many pitch competitions at BU and Harvard in which I am involved.
If you are not familiar with the term, a pitch deck is a presentation typically used by entrepreneurs or startups to showcase their business idea (product or service) to potential investors, partners, or clients.
As I read through the pitch decks and watched the related presentations, it struck me how much overlap there is between startups and their nonprofit counterparts, especially as it relates to seeking funding.
Nonprofits, of course, don’t offer a significant future financial return to investors the way a startup does. Nonethless, smart nonprofit leaders work to establish a different type of “investment opportunity” for funders — one with returns that are societal and/or psychic in nature.
More specifically, nonprofit funders gain the satisfaction that their investment will yield important and significant benefits to society, in whatever way the nonprofit operates, and that with their investment, they are an important contributor to making that happen.
With that in mind, here are four essential elements of an effective entrepreneurial pitch that also apply in the nonprofit world.
#1. A Compelling Story
Some of the most effective investor pitches begin with a compelling “founder story.”
Consider the pitch from RapidSOS, a company that connects mobile phones to emergency services lines like 911. The story used in the pitch — and still present on its site today — describes how the founder’s father fell off the roof of his house while clearing snow and was unable to get help for hours because the 911 system wasn’t designed to locate him.
Nonprofit leaders should likewise tell compelling stories. For example, the City Ballet of Boston uses dance and performances to help kids from disadvantaged backgrounds build physical and mental discipline. Its founder talks about how he was able to rise out of the projects and gang involvement thanks to his early involvement in ballet.
A story, whether from personal experience or not, can highlight the problem being solved, the value being created, and the individuals affected. All of this helps potential funders better understand what they are supporting, how they can get involved, and the impact they can help create.
#2. A Clear Impact
In the startup world, the pitch needs to clarify both the significant problem (or opportunity) the startup solves and why doing so is important in the first place. It needs to further demonstrate a large enough market of people who think it’s worth spending money on.
Nonprofits often use a “Theory of Change” concept to explain the often indirect impact of their work. Squashbusters uses sports to help “level the playing field” for high school students in disadvantaged situations. They are explicit in explaining how the discipline of sport — and their approach to it — contributes to character building, which can improve their participants’ positioning for college acceptance (often with a sports scholarship).
The most compelling pitches (of any kind) make it crystal clear how their solution creates tangible, measurable impact for a specific audience.
#3. A Strong Team
Prospective investors want to know you have the right people in place to address the problem(s) you have identified. They know that absent that, and regardless of the strength of your idea, you’re unlikely to get it up and running successfully.
Squashbusters’ founder was a professional squash player. They engaged experienced tutors and college advisors to deliver complete support to students. With a program manager who has a Master’s degree in Education focused on post-secondary access at the director level, they make it clear that sports is the anchor, but that the team and programs are broader and more comprehensive.
This aspect of a pitch focuses on demonstrating an understanding of the skills required of your management team and specifying that you either have those skills onboard, or have a clear plan to fill any gaps.
#4. A Well-Structured Deal
When investors decide to invest in a startup, they look to balance their level of investment with the amount of equity (or other benefits) they acquire in exchange. Here, it’s not just about the likely success of the startup; it’s about how and how much the investors are being asked to commit in return for the potential reward.
For major donors considering a significant investment in a nonprofit, the deal structure usually involves some form(s) of recognition: naming opportunities for programs or facilities; invitations to special events; recognition in the organization’s annual report or on its web site, etc.
Investment rewards in the nonprofit world are not monetary — but they have value all the same. Smart nonprofit leaders understand this and work to make these kinds of things as attractive and compelling as possible to their target funders.
Reflections
Whether you’re a groundbreaking startup or a nonprofit on a mission to change the world, the principles of persuasion as they relate to funding remain remarkably similar. Crafting a compelling narrative, demonstrating impact, showcasing a capable team, and structuring an attractive deal are universal ingredients for a successful pitch.
Done well, a great pitch isn’t just a request for support — it’s an invitation to be part of something meaningful.
