Kudos to the students at McGill University for putting on some great events. I’m a big fan and advocate of anything that bridges the gap between students and startups.
I was invited to speak along with Daniel Drouet at an event entitled, “The Perfect Pitch”. I’m not sure such a thing exists, but I was happy to help out and present my experience and advice on pitching investors. Since the audience was comprised of students, with little startup and pitching experience, I tackled the basics — but hopefully everyone gets some value from this.
Here are some highlights and additional details from the presentation:
- Pitching is a combination of storytelling, selling and conversation. You have to understand what an investor pitch is before you can really do it, and the combination of storytelling, selling and conversation really does describe a good pitch. You need to tell a story, be engaging, interesting and creative. You need to sell, just like you would gun for a customer or partner. And you need to realize it’s a conversation, not a one-way diatribe. If investors aren’t asking questions, you’re in trouble.
- Pitching is a skill onto itself. Pitching investors is truly a skill. It takes a ton of practice. You get better with practice, and if you don’t do it for awhile you can lose your edge. So practice. Make an effort to pitch when the opportunity arises.
- Hearts – minds – wallets. That’s essentially the order of things you need to capture from investors. First go for their hearts and connect at an emotional level. Maybe they feel the pain you’re trying to solve. Maybe they love your team, or your vision for changing the world. Whatever the case, go for the heart first. Then you need to connect with them intellectually. Let’s look at the financials. The market. The meat & potatoes. Then go for the dough. This basically makes up the structure of any good story: beginning, middle and end.
- Hook them fast. You only have a few seconds before investors start to fade away. You need to hook them quickly with a strong elevator pitch. You need to answer the question, “What we’re all about”, with a strong, bold statement (or two).
- Know who you’re pitching. You need to research investors before you meet them. Find out what they’ve invested in (not just their fund). Find out their background (especially if they have an entrepreneurial one.) Reach out to portfolio companies and speak to them about the investors too. There’s no excuse for going into a pitch unprepared.
- Expect to be interrupted. It’s a conversation, and investors love to jump in. Don’t expect to just walk through your presentation precisely the way you’ve designed. It won’t happen. You can’t get flustered or take questions personally. Expect to be interrupted. Expect tough questions. Know your stuff and don’t fumble your way through a PowerPoint pitch deck to find the answers. The PowerPoint deck is just a guideline; really just a placeholder for the engaging, incredible pitch that you’re giving. You’re the one investors care about. And don’t worry if you don’t get through everything; go with the flow.
- Don’t act like the smartest person in the room. There’s no advantage to being the smart ass know-it-all. You need to be confident, but not to the point of being obnoxious or irritated. Admittedly, it’s a fine line.
- Cut the bullshit buzzwords. You don’t demonstrate expertise by throwing around industry buzzwords and acronyms. The investor might not be an expert in your industry, so make sure you speak to them in a way that they’ll understand. Remember: it’s a conversation, a dialogue and you’re trying to sell them. Most people don’t buy what they don’t understand (and in 30 seconds, I might add.)
- Avoid granular product detail. You won’t win points by going over your solution (or product) in finite detail. Describing every feature is going to send investors to their Blackberrys in a hurry. Tackle the high level aspects and features of your product — more importantly, impress upon the investors the benefits of the solution. Product demos are great – a picture does tell a thousand words – but be prepared for the demo to break. You should be able to walk through your product demo in its entirety without even showing it … “So what you’d see here if this was working…”
- Sex sells. We all know this, but it bears repeating. A well-designed presentation and/or product demo helps. Investors like sex. They’re human after all…
- You don’t know everything … and that’s OK. You can’t know everything, even about your own business. So don’t bother pretending. If you don’t know, admit it. Investors will have a mental checkbox for, “He’s not a total bullshit artist, scammer. Good.”
- Consider it a learning experience. Every time you pitch you’re going to learn something; about yourself, your business, investors, how the startup world works, etc. So one of the most important tips is that you walk away from every pitch with something of value: knowledge. As we all know, you’re not going to walk away from most pitches with money, so knowledge and a good learning experience is the next best thing.
- Have a memorable ending. Too many pitches end with the financial model, but it’s often one of the most dull (and messed up) parts of a pitch. It’s better to end with something much stronger. “The 4 most important things today that we’ve talked about: bam, bam, bam and bam.” Think of a way to end strongly, and make sure you hammer home your key messages.
Instead of including links throughout this post, I’ve included a bunch below (they’re also references in the presentation). Read everything I’ve listed below. There’s some amazing content about pitching in there. I’m especially fond of “12 Ways to Blow Your Investor Pitch”. It’s awesome.
- Dave McClure: http://500hats.typepad.com/ & http://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka-startup-viagra-how-to-give-a-vc-a-hardon
- Guy Kawasaki: http://blog.guykawasaki.com/2005/12/the_102030_rule.html
- Sean Ellis: http://startup-marketing.com
- David S. Rose: http://blog.ted.com/2008/09/10_things_you_n.php
- Me: http://www.instigatorblog.com/how-to-raise-startup-financing/
- Pitching Hacks: http://venturehacks.com/pitching
- 12 Ways to Blow Your Investor Pitch: http://bit.ly/bHuH17
- Andrew Chen: http://andrewchenblog.com/
- Pitching to VCs: http://bit.ly/asfVLL
- How to NOT Write a Business Plan: http://bit.ly/5cqSrj