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How to pitch investors

You want money for your idea. Investors want a story to believe in

You want money for your idea. Investors want a story to believe in

Daniel Batten

[Finance]

A successful pitch can change the world. One recent example is An Inconvenient Truth—make no mistake, Al Gore’s film is more pitch than documentary. The remarkable feat of this film is not so much the information, but that for the first time ever a stark environmental message has been successfully pitched to a large mainstream audience.

Whether you’re raising consciousness or capital, the ‘pitch’ matters more than the actual content or product. If the product and opportunity look good but the pitch isn’t, investment seldom happens.

Why? Because if you can’t sell your message to me as an investor, you will struggle to sell your message to customers. If you can’t excite me with your vision, you will not attract the highly contestable top employees you’ll need.

The good news is that by learning to pitch you make yourself many times more likely to win not only investment, but great customers and a great team: exactly the things you need to attract as a business. The other good news is that pitching is not a black art—it can be learned.

Over three years, I gave scores of pitches. Our company became the first company that the Ice Angels invested in, we sometimes got investment within a couple of weeks of pitching, our success rate was very high, we always did it at an improved valuation, and prospect feedback often included the word ‘inspirational’. Here are some of the secrets I have learned from my own experience of pitching, and watching, judging and coaching over 100 pitches from other companies.

Pitching is storytelling

Saying, “When I was down on the farm I used to see a lot of time wasted dagging sheep, and I wondered if this could be automated” is the right lead-in. “Here are the top five attributes of the Auto-Dagger 2008” is not.

The story only has four bits

“This is the opportunity, this is the market size, this is why our product is disruptive and why we can get to market cost-effectively, and this is the team that is going to do it”. That’s it. Don’t waste time on in-depth product descriptions or any details on anything.

Aim for curiosity, not closure

A great pitch will get you to a due-diligence meeting. The best way to do this is to excite curiosity. Ironically, that means you have more chance of getting to the next meeting if you leave some of the story ‘to be continued’.

Write your script first, the presentation second

Use PowerPoint to support your story, rather than your badly ad-libbed story to support your slides.

Less is more

Remember that only so much can be retained by people the first time they see something. Putting down two key ideas is better than ten points that no one will remember.

When you pause, they absorb

“Um” and “ah” are enthusiasm killers. Each time you feel the urge to say this, pause instead. Sounds simple, but the effect this one change has on how an audience perceives your confidence is unbelievable.

Less know-how is better

Get someone who has only a high-level understanding of the product. Technically-minded founders and scientists try to describe the fine details, whereas metaphor and general product overviews can be very quickly understood.

All humans—and most investors are human—are very good at rationalising why they decide to buy something. But they actually create an after-sales rationalisation for an emotional decision

When they ask questions, don’t try to know it all

Instead hear the question behind the question. “What will you do with the money?” means “Do you understand the difference between buying things and investing money in things that will grow your business?” “Have you thought of doing x?” means “Are you open to listening to people like me who want to give you helpful input?”

Investors don’t know why they invest

All humans—and most investors are human—are very good at rationalising why they decide to buy something. But research suggests they actually create an after-sales rationalisation for a decision that is predominantly emotional. They’ll invest when they feel confidence in you and your vision, and an emotional connection.

Relax!

In Ricardo Bellino’s book You Have 3 Minutes!, he describes his successful multimillion-dollar pitch to Donald Trump. Trump thought Bellino was nervous and his presentation lacked some key facts, but was drawn to his vision and enthusiasm. The point is: you will feel nervous, so relax about the fact you’ll be nervous, because only then will your infectious enthusiasm shine through.

If you feel the wheels starting to fall off a presentation, don’t try to spin your story. You’ll win hearts and minds with honesty. Acknowledge that someone has asked something you can’t answer, that there is a gap somewhere that you hadn’t considered, or that you have work to do on your presentation skills. Better this than trying to paper over cracks. Things started to go badly in San Diego in 2003 on my first-ever pitch, but because I was open to input and learning we were invited back to pitch again.

That’s pitching in a nutshell. In the 80s, Dr Albert Mehrabian said successful communication is 55 percent non-verbal, 38 percent voice, and only seven percent actual content. I was sceptical when I heard it, but after three years of constant pitching I reckon Mehrabian was dead right. You learn the work by doing the work, which means you are better off preparing for a pitch by putting yourself in an environment where you are constantly practising in front of people how to voice and present your message than you are shutting yourself off from human contact in a room with PowerPoint running while you perfect your slides.

The pitch is your bridge to the investment capital you need to realise your dream. The money and the business opportunities are here to be tapped. It’s the bridge between the investors and business opportunities that needs to be fixed, and your pitch can do the fixing.