What makes a great pitch? Start here.
Karl R. LaPan, President & CEO, The NIIC
Ah…the investor pitch. While it’s not necessarily an indicator of future success, it can propel your business venture or idea forward. A great pitch can attract the right kind of attention and lead to potential partnerships and outside investment.
This is your time to shine. Everyone wants to craft a winning presentation that captivates their audience’s attention. However, how?
Following are some critical things to keep in mind as you prepare to “wow” your potential investors.
Know your story.
There is no one better than you to share your why. Watch the Simon Sinek video if you don’t know you’re why. As Simon reminds us, people may get what you do but not why you do it. Your passion and the problem or pain you identified for creating the company may make a big difference in investor sentiment. Remember, studies have shown that the initial screening of the company by angel investors is about the deal, but ultimate investment (writing the check) is about you – the chemistry, the trustworthiness, your team and your track record.
Know your numbers.
There is nothing worse than a story that doesn’t hang together with the numbers. You need to know the key drivers and sensitivities of what drives value and relate that to potential investors. You should know your economic drivers of value and be able to answer critical questions about your likely hockey stick projections and what drives them. Otherwise, your credibility will be in jeopardy. There is a reason only 15-18% of early-stage ventures seeking outside capital typically receive any early stage investment.
Know what differentiates you. (What’s your secret sauce?)
If you say you have no competitors or that you only need 1/2% of a large or growing market you and your pitch are done. You must have traditional or non-traditional competitors, and you must be able to narrow your customer segment in a way that builds investor confidence. Can you identify your potential customers by name or type? Do your financial projections identify the specific customer segments and types in the pro forma? If not, keep working on it because you are not ready. Do you or your team members have any domain expertise in the industry in which the business operates?
Know if you want a boss. (This is the most important thing to think about.)
When you take outside, third-party investment, you are getting a boss whether you like it or not. Think this through before taking someone else’s money because it is a game-changer. Sometimes (and in fact, many times) it is better to find customers first. Your valuation and ownership are most vulnerable when you have not de-risked the venture, when you have not validated your product, when you have no assets or brand equity, and when you don’t have paying customers.
Here are some key things to keep in mind for the art of the pitch (the technique).
Practice your pitch out loud.
This one probably goes without saying. It would be best if you did more than memorize or recite your thoughts in your head. This doesn’t always translate to quality delivery. The best tactic is to practice out loud so you can pinpoint any mistakes or missing content and adjust accordingly. This is also a good idea so you can make sure the length is appropriate. Doing it in front of a mirror can help you assess your body language and make changes, too. Tell a story. Pause often. Listen. Don’t interrupt the investor’s questions or say you will answer them later. Be sure to directly answer the question you are being asked. If you don’t know the answer, say so, and that you will get back to the investor.
Rehearse in a similar situation.
Fear of the unknown can cause anxiety and make you feel less prepared the day of the big event. If you have the luxury, practice beforehand in a similar setting or context. This will allow you to get a feel for how your voice carries and your relation to the audience spatially. When you are prepared to face your audience, you will appear more confident and more poised to succeed because you have accounted for significant variables. You don’t want to walk into a situation blind. Remember, the pitch is the beginning of developing the relationship with potential investors. If you have a product demo, make sure it works. If your pitch depends on high-speed internet, make sure you have it. You don’t get a second chance of making a great first impression.
Record the presentation.
Put your smartphone or tablet to work! You might dislike seeing or hearing yourself at first, but this tip can help you hone your pitch. Video can help you observe any nervous ticks and poor posture, both of which can detract from your message. So, don’t be afraid to record several versions until you’re confident you’ve got it dialed in. Time is on your side, so don’t be scared to use it! Practice, iterate and adjust your pitch with the guidance and knowledge of a business coach or mentor. Your flow and delivery needs to be natural, and you need to be confident.
Seek honest feedback.
Do you have a brutally, honest friend or family member? That’s the person you want to recruit to test-market your pitch. Ask them to evaluate you through a critical lens. What did they love? What did they hate? Did your message get through to them? What would they change? Were there any questions left unanswered? Do you know your product or service inside and out? Listen and then take their feedback to heart and prepare for any worst-case scenarios.
Remember, there are companies have become serial pitch competition winners but that doesn’t mean they are building a successful entrepreneurial company. It just means they are good at pitching. When you read a pitch deck of all the competitions they have won, you should begin to worry about whether they have lost their focus.
There are considerable pitch resources on the internet including examples of high impact presentations, pitch clinics sites who work with you to fine tune your message and story, and outside advisors like The NIIC who can coach, encourage and support you in your efforts.
What other tips and success practices have worked for you in delivering the perfect pitch can you add to this list?