Perfecting the pitch is essential for entrepreneurs, business owners, and advisers looking for investors.
Too often people make the mistake of assuming that because they are passionate about something, an investor will be as well. They key to remember is that it is your job to get your potential investors excited and help them become interested and engaged in your industry and what you have to offer.
Recently I had someone send me details of a licensing deal they were proposing. While I was aware of their basic business concept, I did not know specific details. I asked for more information and they sent me some text pasted into an email. Whatever deal they could have had was blown. You may only get one shot to impress someone, so make it count.
Before you pick up the phone or walk into a meeting here are ways to make sure your sales pitch is effective:
- State the benefit right away. What is the benefit to the investor? Make sure you clearly articulate this early on. This is not how it will help you, but how it will help them. For example, “You will get 30% of the company, a board set, and we anticipate distributions within the first 24 months.” If you don’t state this up front they will spend your entire presentation wondering what is in it for them.
- Financials. Investors invest because they want to make money. Never scrimp on the financial portion of your presentation. Know your budget, cash flow, and projections inside and out. If this is a start up have knowledge of your competitors revenue and profit for a base line.
- How will the funds be spent? Investors want to know how you will be spending their money. Make sure that capital is going into things that will directly grow the business like inventory, equipment, marketing and expanding the sales team.
- Market Potential. What are the possibilities for your industry and what is its total yearly revenue? Excite investors with the opportunity to capture some of this market share. This is where your salesmanship should shine.
- You’re Unique. What is different about your product and or service? Tell investors about the problem you have identified in the market and how you are going to solve it. For example, “Our product can save lives by treating heart attack victims faster.” Add specifics about how many people you can help and what your solution means to them.
- Leadership. Build a strong team of advisers. Identify the various aspects of your business and find either an employee or adviser to fill that role. For example every business should have a CFO and a business attorney. If you can’t afford one on staff, retain people that can offer this service in an advisory capacity. Investors that view an organization as thin on leadership are likely to invest elsewhere.
- Investor Impact. Explain how their investment will help your company grow. Also include any additional value that they bring to the company. If they know people in the industry they could help the company grow by arranging strategic partnerships etc.
Whether calling investors, meeting face to face, or presenting in a forum lead with a perfect pitch. This is your opportunity to capture their interest, and quickly. You won’t get a second, more personal meeting, if you don’t excite the investor on the other end of the phone. Know your information backwards and forwards and never forget the cardinal rule – state how they will benefit and make money early on.