Start-Up: Pitch To Win

Start-Up! is weekly column on entrepreneurship, start-ups, technology and innovation, powered by the Adams Hub for Innovation.

As with excellent business plan writing, excellent investor pitching requires some fundamental aspects but it also requires a bit of flare and compelling allure.

The fundamentals are the things that got your company to the point of presenting and pitching the start-up. There are a number of salient points to consider when preparing to pitch to savvy investors. I say this because getting money from friends, family and fools (the 3 “F”’s) doesn’t really count. If they want to support you, they’d give you the money, whether they believe in it or not, often just writing off the $25K, without true expectation of any return.

When you get to angel, grants, and venture money, it is much more complicated, expensive, and instead of looking for reasons to give you dollars (like the three F’s above), these folks are looking for reasons NOT to give you the dollars. Know who you’re pitching to… what type of investor are they? What’s their background (technical or business leadership)? Where did they make their dollars? What types of hobbies do they have? How much do they usually invest? Do they seem kindred (be it conservative or aggressive)? This is a big deal, as you need supportive, like-minded investors and partners or trouble may lie ahead.

It is your job and the job of your management team to be able to have considered and overcome any of the negative scenarios/ critical risks they will inevitably bring up in the Q&A. The start-ups that receive funding from outside sources have done all of their research, and their team members can answer any question or any concern about the product/service, market, competition (both direct and indirect), and risks (both internal and external). The best information is cited from independent resources, because then the Company’s position can be substantiated… it’s great to be able to say “nope, that didn’t come from us; it came from the Wall Street Journal industry poll…”!

Quantifying statistics, like the ones that show double-digit market growth over the next decade, or a recession-proof product, in an otherwise volatile market, are gold. Quotes from recognized experts can also validate the Company’s position, so, DO THE RESEARCH. Become an expert. Aside from being market experts, know and be able to articulate the three top competitors and what they do well, as well as what they’ve overlooked, allowing your Company a formidable, yet sustainable opportunity. Confident expertise regarding all aspects of your start-up could likely be the difference in getting the money or not…

It is also critically important to be ready for “game time” which is the actual pitch. How long do you have? Have you practiced a dozen times, with people watching and critiquing? Know the midpoint of the pitch so you can subtly speed up or slow down, depending on where you wind up while in front of the investors. Practice, practice, practice, practice….
I spend a lot of time mentoring my university student teams for pitching competitively (they’ve won over $300,000 over the last four years) and for investment money. Incidentally, I’ve spent over 25 years of successful pitching for my companies and client companies, raising millions of dollars, many times over, and now in later life, many start-ups pitch to me for investment. Here are a few key tips how to pitch. Next week we will present WHAT to pitch investors:

• Not everyone is a natural orator or presenter. In fact most normal folks are not natural or comfortable in the role. When stepping up to begin, introduce yourself personally to the investors one by one. This will help level the tension and personalize the meeting.
• Next, when it’s time to go, stand up straight, and take a deep breathe. It’s amazing what a sense of power and clarity that simple little gesture can produce for a nervous presenter. From there use what I term as “rhythm and vocal intonation”. Many folks just try and get through the oration, so it becomes a monotone running together of points and facts that might otherwise be compelling.
• It’s a matter of tempering nervousness, excitement, professionalism, and vocal highlights, to grab the audience and keep them. Compelling facts should be emphasized, risks should be stated matter-of-factly, but not with the wrong tone.
• Never read unless it’s a quote.
• Never lie. It’s ok to say “We don’t know, but we’re researching this…”
• Try to present with the management team, so each can answer questions to their strength, as it also re-assures the investors that this is a collaborative, cohesive unit.
• Thank them for their time, and express that any feedback (positive or critical) that they may provide would be welcome and most helpful.

Here’s a hint: Investors invest in management, as the technology may be cool, but if the team can’t pull off the strategy in the eyes of the folks with the money, then there is no opportunity. Make sure you have a strong Board of Advisors, in every aspect of the business.

All of this can be the difference between getting money or going home to more beef ramen on the hotplate in the parent’s basement….

• PS- I’ll be teaching a fun and intense start-up class over 2 weekends in August at UNR. It is a hoot; it builds real companies in 10 days, and it is open to all community members, as well as undergrad and grad college students. More info: https://www.cisweb1.unr.edu/cxsucan/CourseListing.asp?master_id=1929&mas....

Matt Westfield is a serial entrepreneur, founder of Entrepreneurs Assembly and Adams Hub for innovation Entrepreneur in Residence and Mentor. Matt can be reached at Matt@EA-nv.org