2015 – approx 2.8 million new business applications have been filed in the U.S.; 2023 – 5.5 million new business applications have been filed in the U.S.; a 96% increase over the 8-year period (especially post 2020). – Commerce Institute2015 — approx 2.8 million new business applications have been filed in the U. S.; 2023 — 5.5 million new business applications have been filed in the U. S.; a 96% increase over the 8-year period (especially post 2020). — Commerce Institute
Starting a new business is easier than ever today, especially compared to 10 years ago. But even though it’s easier to open a startup, what hasn’t changed is getting/convincing investors.
Why is that?
Well, a good idea isn’t going to cut it. Nor will a well-written business plan. What you need is a product in action: a product that works and a clear way to communicate that product to others.
But a recently (rapidly) evolved technology could help us solve this problem.
Let’s talk about AI.
Why Pitch Decks Alone Aren’t Enough
Pitch decks remain a central element of startup fundraising.
They provide a structured overview of a business’s problem, solution, market, and finances. But they lack something fundamental: they are unable to show the product in use.
Investors typically need to know what it looks and feels like. A deck will give insight into numbers, but not usability, customer experience, or the impact of the innovation. That gap is why product demos are now a perfect option for early funding stages.
A demo of the product not only illustrates the concept, but it also demonstrates execution. It shows that the team not only can create a concept (an idea) but can execute it as well. When combined with a good pitch deck, it becomes the complete narrative.
You’ll have the vision and the proof.
Where AI Tools Fit In
AI has reduced the barriers for startups at every development stage. Startups do not need the services of expensive agencies for content at the development stage.
Instead, they can hire:
- AI pitch generators — to draft brief, structured investor pitches.
- AI content assistants — to refine executive summaries, letters, and introduction emails.
- AI product demo maker tools — to create high-quality videos that highlight the solution in use cases.
This last category type is becoming even more valuable than gold. A product demo AI video maker for startups can help these new businesses create smooth videos that can help with meetings and describe their product clearly without requiring a film crew, editing department, or months of production time.
What Investors Gain From Demo Videos
Investors normally receive dozens of pitches per week. A demo video can make your idea stand out.
Below are three ways it builds investor confidence:
- Clarity — Complex solutions are easier to grasp when shown visually.
- Credibility — A prototype in video format puts investors at ease that you’re past the idea stage.
- Efficiency — Videos communicate faster than pages and pages of text, allowing investors to get a grip of the core values of your proposition.
A good demo video tells the story that a pitch deck starts but can’t finish on its own.
Cost and Accessibility
When you’re an early-stage founder, cost is a big factor to think about.
Traditional video production can cost from $5,000 to $20,000 (USD). The cost depends on complexity, but it is not a cheap option, for sure. AI-driven solutions are much more affordable. Using AI tools means you don’t need multiple specialists, and you can use software to script, generate, and edit demo videos.
Here are the differences between traditional video production and AI video options:
For lots of startups that are in the beginning stage, the AI option is also the only one they can afford. It allows for several iterations, supports fast testing of messaging, and is easy to adjust as the product develops.
How to Use Demo Videos As Part of Your Fundraising Strategy
Embedding demo videos into your fundraising arsenal does not necessarily mean replacing pitch decks. You can actually enhance them.
A great strategy incorporates both.
- Lead with simplicity in your deck — Use AI tools to define the problem, solution, and market opportunity.
- Illustrate with a short demo — Keep the video to less than three minutes to show functionality and user experience.
- Seek depth with follow-up — Use one-pagers, executive summaries, or letters to support financial and operating data.
This tri-level approach gives investors the whole vision: simple narrative, proof of execution, and supporting evidence.
Practical Steps for Startup Founders
Each and every investor meeting (or demo day) requires you to leave a good impression.
Here are a few pointers as to how, as a startup founder, you can do exactly that:
- Don’t go all-out with a full-blown product description — that can confuse investors; rather, stick to the one feature that makes the product stand out (what makes it special)
- How does this feature (or product) solve a real-world problem? It’s important to answer that question.
- Get some data points that point to that problem being an ACTUAL tangible problem.
- Make a demo video using an AI video maker tool, because visuals help you be more impactful.
This way, you’ll be on point, you’ll be clear, the investors will be focused/interested/engaged, and all that helps you strike a deal right then and there.
Why Confidence Is the Real Goal
Visuals and numbers matter; no one will argue that. But what’ll win over investors is confidence.
If you aren’t confident in your product, why would a consumer be? Also, if you don’t sound confident, investors might be hesitant to invest in you because they might think you won’t be able to deliver (regardless of how good the product is).
With a fantastic pitch deck and a professional-level demo video, you make the impression that you know the market, you can deliver, and you’re capable of using the latest tools to do so.
Confidence is a different story. Investors do not actually invest in a product. They are investing in the individuals who created it.
Showing them your product in action is one of the easiest ways to earn their trust.
Conclusion
It seems that opening up a startup company is much easier than it was 10 years ago, but that means that your competition is higher. Luckily, we have plenty of new tools that can help us with that. Sure, your competitors have the same opportunity, as well, but you’re reading about it right now.
Are they?
Approx. 60% of companies in the U. S. say they use AI to further their business (twice as much from just one year before). — U. S. Chamber of Commerce
It would seem that 2 out of 5 businesses still aren’t leveraging these new tools, which means that simply by knowing this, you’ve already gained an advantage over those 40%.
Leverage new tools to better your business, and to more easily get investors — a crucial part of growing a company.
