The Quick Pitch: Short and sweet appeals to investors

7/15/2013 11:04:00 AM
When it comes to pitching a company to potential investors, keeping an eye on the clock is of the utmost importance. Keeping your pitch short and sweet demonstrates awareness of the investors’ busy schedules; more important, it says a lot about your company’s leadership: You use time wisely, you believe in the inherent power of your product or service, and you’re not afraid to get right down to business.

Still, paring a company’s pitch down to its most crucial elements isn’t always easy, so here are a few tips to get the process going:

Hook ’em

 – In the same way that public speakers work to grab attention quickly, those who pitch to investors need to make a strong emotional connection right away.
“You literally have just a few seconds to make a lasting impression – from as little as two seconds to 90 seconds, depending on which study you cite,” Bloomberg Businessweek explains. “Given that fact, it’s important that you make a strong, emotional connection with your listeners with your first few words. And those first few words should grab your listeners by getting them involved with the content of your presentation.”
How is this done?

Give them a reason to care

 – Decide what the most compelling reason is for why investors should believe in your company, and fashion an opening around it.

Distill your concept down

 – The executive summary of your entire business plan is a good starting point for the first section of your pitch.
“Your executive summary is a two-to-five-page bottom-line version of your business plan, a riveting bulletin from the front line that primes investors to read on,” notes Bloomberg Businessweek. “Few people will want to pore over the whole plan – this is why you’ve got to rope them in with those first pages and establish that you’re a savvy, trustworthy person with a substantial idea before you lay out all the details.”

Hit the key points 

– While keeping the pitch concise is crucial, it’s also important to make sure that several key points are established. Bloomberg Businessweek lists these points as the right personnel, the ability to deliver the product or service, the size (hopefully, big) of the market being pursued, and the costs of building and operating the business. In short, make the pitch compelling.
“A compelling opportunity is the one that has the right deal, with the right price, at the right time, with the right product/service, and the right team,” Bloomberg Businessweek declares.

Show them the money

 – It comes down to money, of course, and it’s the pitcher’s job to show that the company is a great investment opportunity, not just a good one.
“When a General Partner of a venture fund makes the pitch to her partners to do a deal, she has to make the case that the investment has the potential to return at least 10x the total money invested in the company,” says Forbes magazine, “and that there’s an opportunity to return much more than that.”

Alleviate fears, appeal to greed

 – “Investors are motivated by two emotions: greed and fear,” Forbes goes on to say. “When things look bad they’re terrified they’ll lose all their money. When things look good, they kick themselves for not investing more. To raise money you have to have a credible story – traction, growth, and a good handle on your business. But you really need to appeal to investors from an emotional perspective.”
Finally, if companies are consistently hitting dead ends, they may need to reevaluate their business.
“If you’re finding it tough to raise money, figure out what wave [trend] you’re riding,” Forbes adds. “And if you’re not riding one, figure out how you’re going to create one – or switch oceans. It’s a lot easier to ride a big existing wave like mobile, cloud, or big data, than to create one from scratch.”

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