If you’ve ever tried to tweet something witty in 140 characters or text your friend some great pithy insights, you know that being “short and sweet” isn’t simple. Crafting and delivering a compelling story limited by word count or time is a challenge for anyone. Now imagine the future of your business is on the line and you are faced with the all- important “pitch.”
First off, to clarify, there are a lot of different types of pitches: the to-the-point “elevator” variety, a “30-second” pitch that can be delivered to any audience on a moment’s notice; the email pitch that you can send to prospective investors or, in some cases, journalists; the two-to-three-page executive summary that can be left behind for further review; and, the pitch deck that you have prepped to deliver in person, often using PowerPoint. In working with dozens of entrepreneurs to craft their presentations and having sat through hundreds of pitches, I want to share with you my observations on themes that can work for or against your pitch. While the points below will focus on the pitch you give personally using (I hope) only a dozen or so slides, you can apply most of them to any type of pitch you are asked to deliver.
Here’s what helps make a winning pitch:
Tell a story that is emotionally engaging.
It is more likely to capture your audience’s attention and it will be more memorable. You want to make it easier for your audience to remember your key points and communicate them to others. Approaching a pitch with this discipline forces you to choose the highlights that need to be communicated—the “compelling few” instead of “the interesting many.” (And, while we are on the subject of standing out, try putting your pitch in a template or a format that’s creative and fresh, without being way out there!)
Remember that your audience will be evaluating you and your team even more than your idea. Key in an investor’s mind will be whether you and your team can develop the product, bring it to market and create an exceptional return on their investment.
Bring a demo or a prototype if you have one.
It’s the best way to show that you can build whatever it may be that you are raising money for and it helps your audience better visualize the product. Use pictures if you can, as long as they are relevant and specific. For example, if you are building an aircraft component don’t just toss in an aircraft image to reinforce that you are selling to the aerospace industry. Instead, show where and how this item is used on the aircraft since this is the product you are building (or will be replacing in the market).
Relate everything to direct customer feedback, if possible.
This makes it real. Investors are always trying to determine how difficult it will be to enter the market with a sustainable business model . . . how easy or difficult market adoption may be. (We’ll talk about the “valley of death” at a different time.)
Explain just how you plan to make money.
Sounds pretty straightforward, but you would be amazed how often this is either overlooked or really, really unclear.
Make sure your homework is complete.
Know your audience: the firm and the individuals. If they already have experience in the industry, you can skip basic concepts. In either case, they will be impressed that you came as prepared as possible.
Try to be personable and memorable.
Take the time to stop by and personally introduce yourself to each participant before the meeting starts. Forget that loud red vest even when presentation is around the winter holidays and be mindful of just how much humor you use; a little well-placed humor can go a long way. If you’re too serious, the presentation can be dry; too much and it’s just, well, a joke. Be authentic.
Be ready to give your presentation without the benefit of your pitch deck.
Assume that technology will somehow let you down–that your embedded video will not play when it needs to or that the projector won’t work. You can’t give up a shot at funding because your slides, demo, or the wireless aren’t functioning. That means you should have copies of your pitch deck in multiple formats and in multiple places. Save it as a PDF and a PowerPoint on your machine, on a USB drive, or on the Web. Even have a few paper copies as extra insurance. Memorize your talking points and know the order of the points you want to make, following what is really important to tell your story.
HERE’S WHAT DOESN’T WORK:
- Using your time talking about the product without setting the context. Explain why your technology is important, who will care and who will be willing to pay for it. What “pain” is it eliminating? Focus on benefits more than features and avoid technical minutia.
- Using every buzzword or industry acronym known to man that only someone as knowledgeable in the industry as you would ever know.
- Using ridiculously optimistic market numbers (“Everyone in the world could use our product,” or “If only 1% of the entire U.S. population uses it, then . . .”) or overly precise figures, especially in projections (“We estimate our growth to be 12.675% compounded annually,” or “Our revenue in Year 5 will be $ 22,384,200 . . .”).
- Even thinking that there is no competition in your space, let alone saying it out loud. Inertia is always a competitor.
- Getting defensive when the tough questions are being asked. Do your very best to not alienate investors with your answers or your demeanor. Investors, like other people, prefer to do business with people they like and tend to stay away from people that seem non-coachable, argumentative or overly brash. Investors are trying to imagine what it would be like to work with you and this is your big chance to make the right impression.
- “Bobbing and weaving” your way through a question. If you’re asked a tough one, either answer it or be honest and say you don’t know the response and will get back to them later. You are not expected to know everything and you will lose credibility if you try to wing it. Or worse, you could come off as inattentive and even dismissive if you don’t address it directly.
- Using way too many slides and way too much text in your presentation. The slideshow isn’t supposed to do the talking for you, it’s merely a supplement to the wisdom that should flow from you. (Guy Kawasaki (2005) shared the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than 20 minutes, and contain no font smaller than 30 points.)
- Asking VCs to sign a non-disclosure agreement. Most institutional investors will not sign non-disclosure agreements due to legal exposure; however, it is appropriate to ask an individual, a potential strategic partner or competitor to do so.
Becoming “pitch perfect” takes a lot of thought, practice and preparation. These tips are designed to help first-time entrepreneurs focus on what’s important, avoid common mistakes, and fine-tune their pitch to potential investors.