Securing funding can be quite difficult to accomplish, and there is a lot of fierce competition among the many startups that are seeking capital at any given moment. Finding interested investors and then convincing them to fork over funds requires an enormous amount of time and patience. Most startup founders are likely familiar with the importance of a polished pitch deck that will clearly yet succinctly elucidate the reasons that investors should provide some money to fuel their company’s growth.
But, in many cases, startup leaders will never even get the chance to present their pitch to prospective investors, as time and funds are just too limited. In an effort to get noticed and to reduce the time and money required to present a formal presentation, more companies are turning to videos to make their pitch. Here are some pros and cons to utilizing this method:
Pro: Wider Dissemination
There is no doubt that creating a brief but catchy video can be done for a fairly minimal sum. And, in addition to the potential savings realized from not having to travel to other cities or states to make a pitch in person, investors across the country and even across the world can be reached far more easily. A company can easily create a pitch video and send it out to hundreds or even thousands of prospective investors, whereas conducting a pitch in person will only be possible for the handful of investors who are most likely to commit to an investment.
Con: Lack of Interactions
Of course, one of the major drawbacks to relying solely on technology for the pitch presentation is that it completely eliminates the chance of a personal interaction during the process. For the most part, truly interested investors will want to get to know the leaders with whom they may be entrusting a substantial sum of money. Plus, most investors will want to have the opportunity to ask questions and clarify any ambiguities within the pitch. Even though technology facilitates business in countless ways, there is no denying that personal relationships and chemistry still matter, and using a video precludes this key aspect.
Pro: Multifaceted Usage
One of the other great things about using a pitch video is that it can serve in other capacities. More than likely, the video will do a nice job of summarizing the leaders’ backgrounds, explain the mission of the company, and highlight the company’s financial and operational advantages. All or some parts of the video may be repurposed for marketing materials, as informational clips on the website, or for job ads seeking to entice top talent. Although the initial goal of the video will be to elicit the interest of investors, if it is done well, it can be used for several other purposes as well.
Con: Quickly Outdated or Constant Updating Needed
The business climate is always in flux, and thus companies are constantly having to adjust and adapt to the changing circumstances. A pitch video that is created at a time when a company is in need of a large capital infusion will be based on the financial status of the company at that time. Thus, as the months progress, capital infusions are made, and the company begins to grow, these figures will eventually become outdated. As a result, the shelf life of a video may be fairly limited or will require periodic updating that may not be worth the time and money needed to make the changes.