Keep it simple. Even if your words are elementary, the important thing is that they sound good together. Find a simple rhythm and words that work well together, and you'll get a cheer from the crowd.
Find words that rhyme, even if it's only a little bit. Words that sound similar but don't necessarily rhyme are still okay to use in a freestyle rap battle. And when your words rhyme, it sounds like you have incredible skills. And that's all you need to survive.
Tap into your environment. When you rap about things that are currently around you, the audience knows that it's truly freestyle. They'll appreciate being part of your lyrics and everyone in the room will know you're not performing a rap that you wrote previously. Jabs at your opponent are especially popular, and every freestyle rap battle crowd loves to hear trash talking.
Perform even after mistakes. There will be times when you can't think of a rhyme or you say something that just sounds silly. It's okay and it happens to everyone. What determines whether or not you survive this battle is if you keep going and how you regain your composure.
Practice. In between freestyle rap battles, you should take time to practice. Rap about anything that's around you. You can rap in the shower, while you're driving and even at work. Practice makes perfect, and next time you hit the stage you'll be even more comfortable.