The Art of Pitching
All of us will at some time need to pitch – for money from a lender, for attracting an investor or for selling your business. There are pitfalls so it’s worth preparing – carefully.
Let’s talk about pitching for equity capital. The initial pitch (if you’re raising capital from an investor, hopefully you will have a follow up to go through what is known as the “Terms (or Deal) Sheet”) should focus on the value proposition (largely sourcing the revenue triggers). You must get these complete strangers to fall in love with your concept and business model in the same way you did before you threw your life into it.
In general people are not interested in great ideas; they are interested in good ideas with great execution. If people believe you can execute and they like the idea; you are likely to get to first base. Then your chances of a smooth presentation that will act as a warmer will be greatly enhanced. If you want to know how NOT to run a pitch presentation, go to one of these scientific conferences and sit though a paper delivered by an academic: would you be able to recall any points made from the slides?
It is the most common trap for entrepreneurs and early stage ventures: there’ so much to tell, so much information to get across; so little time! The premise is that you need to pass over all this information. NO! That comes from insecurity: I need to impress. Well. Yes, you do need to impress but not with dead weight of information.
You need to be impressing by being able to clearly show the investor where the money is and how you and he (she) can get there. You need to impress that you are the one to invest in now and not someone else, later.
When it comes time to sit down with an investor who is interested in writing you a cheque to grow your business, you can be sure of one thing: and that is, before they write you that cheque, they will grill you on the financials. Most likely, they’ll ask you your gross margins, the uses of your funds and your headcount. Having answers to these questions on the tip of your tongue is critical. Having completed all of these analyses in your financial forecast is also crucial.
When you create your business plan, you must develop a full financial forecast that includes your income statement, balance sheet, and cash flow statement, as well as assumptions and uses of funds statements among others. This is not so much for the slides but it is for back-up information.
Now unless you are going to run a tape of the musical Chicago and do a two-step with a leggy blonde, forget the team approach: one person delivers the presentation – one person does the talking. By all means have the “team” present and defer to them during or after the presentation.