Last week I heard investment pitches from 32 companies. I can only remember two of them, and wouldn’t invest in any of them.
The problem wasn’t with their products, innovation or management teams. The problem was with the quality of the pitches -- they were terrible.
The audience was made up of angel investors, private equity companies and venture capital funds, and each company was allotted a strict seven minutes to present. One gentleman started his presentation by telling us that his PowerPoint presentation was designed for a 15-minute presentation.
Seriously? You’re looking to raise millions of dollars and you couldn’t be bothered to customize your pitch for the time allotted? Sure enough, he didn’t get through the presentation and got cut off before he could finish. If you want to impress, you need to be prepared.
The most common problem with these, and other pitches I’ve seen in the past, is that the presentations are too technical and try to communicate too much. I’m a product-centric person, to be sure, but I don’t need to know the molecular structure of your technology. While you need to explain your technology and its competitive advantages, keep it high level. Don’t get so involved in how it works and how you came up with the idea that you cannibalize the time you need to describe why anyone is going to buy it.
While many investors are technically minded, they’re first and foremost human beings; they want to be inspired, they want to be excited and they want to understand the opportunity.
Your pitch needs to be easy to comprehend and you have to be enthusiastic. Investors aren’t going to be any more enthusiastic that you are, so make sure the presenter is a strong communicator. In a few of the pitches, the presenter’s English was so poor it was almost impossible to understand what was being said.
While PowerPoint presentations are a great aid, it’s important to keep the slides with minimal text and plenty of visuals. Of the 32 pitches, only one company used video. As it played, you could feel everyone in the room sit up a little straighter and pay closer attention. Adding video is a simple way to keep the presentation dynamic.
The other benefit of reducing the text in your slides is that it reduces the temptation for you to read from the screen. Instead, your eyes should be focused on your audience at all times.
Your pitch needs to memorized and well-rehearsed. It may seem awkward to practice your pitch to an empty room or in front of colleagues but you need to do just that. Your verbal presentation needs to roll off your tongue and sound natural and confident. This only comes with practice.
In one of my businesses, I held back-to-back pitches and question and answer sessions with experienced business leaders in my network. They were not my target market for fund raising, but I could get used to the environment and the types of questions I would need to be answering.
If nothing else, your investor pitch needs to explain your idea from the customer’s perspective. I’ve seen lots of charts and hockey stick growth projections about how valuable the market opportunity is, but it’s rare to see a company explain why the customer will be motivated to buy its products or service.
The bottom line is that when you create your investment pitch, you need to prepare it from the investor’s perspective. Whether you have one minute, fifteen minutes or half an hour, focus on the investment opportunity and how the investor can contribute to this opportunity. If you get them excited, they will pull the details they’re interested in out of you. That won’t happen unless they see a fire in your belly and a clear understanding of why what you are doing matters and to whom. Save the molecular details for later.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.
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