1.
Sell
The Business Not the Idea: Forget about your genius idea for a moment and
ask what does this look like to your prospective market and then, your
investor? Completely change your point of view and tell us who will buy it and
why. How much they might pay. This is the key point – event though it seems
obvious to you it does not to an investor, who knows nothing about you, your
industry or the problem you are going after.
2.
What’s the Headline – the One
Thing That Matters? You have a million ideas and a hundred ways to monetize
the idea. Maybe. But no investor can absorb all these and they are probably not
seen as credible. What they are looking for is the one thing that matters. In our experience, we have usually found it
somewhere near the end of the pitch – like at the conclusion. If you see people
perking up at the end, that’s probably your hook. Make that
your headline.
3.
Know Your
Pitch Structure. You should never spend more than 1/3 of the pitch
explaining your idea, then you want to talk about the business proposition and
how you are going to make it happen and then, why you and your team are
uniquely qualified to do so. Ask for the money and tell them what it’s
for (finishing the tech or setting up a proven marketing plan).
4.
Find the
Big - or Describe the High Growth. Your idea needs to be big to be
interesting to investors. If it can’t grow 10 times within
3-5 years don’t bother. And try to think
whether it can grow 100 times because that is what investors are really looking
for.
5.
Tell Us
How It Scales: The only reason you need an investor is because you have an
idea that will grow with the infusion of capital. They are not there to give
you free advice or share their contacts (if you’re lucky, they might) but
to invest on the theory that you will grow at a fantastic rate. So you need to
give them a formula or a conceptual structure that shows how an injection of
capital can make it grow. Forget narrative, jargon or flowery adjectives and
get down to gameplan.
DO’s
1.
Build Credibility:
Show how your business background or experience somehow led you to or qualified
you for this business.
2.
Where is
the Opportunity Sweet Spot? Tell us where money is to be made. Investors
aren’t here because they love ideas, they are here because
they love ideas that can make them money. In other words, ideas are the
vehicle, the destination is a wealthy exit.
3.
Talk
About Sales. Products and services don’t sell themselves. You sell and it is going to cost you
somehow. Tell us how you get customers and how much it costs you. Better still,
tell us how you can piggyback on bigger partners…..Never mention viral,
they won’t believe you. (If you do have viral sales, show how you
can institutionalize it because every investor knows that in the rare case that
viral happens it can also stop just as quickly.)
DON’T DO’s
1.
Don’t Tell Us How Big the
Market Is – Tell Us How You Will Carve Out a Piece Of It - And Make It Bigger….
Just telling us how big the market is
implies that if you just show up you’ll get a piece of it.
Sorry, but it doesn’t work that way. No one gives you market share, you have to earn it. Better yet, you have to make a new kind of market.
2.
Don’t Tell Us What Other
Companies Raised – Only What They Sold For
Just because company x raised a bunch of
money in no way suggests that you will. There are a million reasons how they
did that. But what they sold for has
a roadmap and maybe you can follow that.
3.
Don’t Say You Need Money For
Sales – Say You Have Proven How To Market It And You Need Money To Scale. You
are the no. 1 salesperson of your company so when you ask for money for sales,
you are saying you really aren’t and the money is to help
you find one. But if you say you have figured out how to market it, that
scales.
