Their approach to the pitch is straightforward and sensible, but they don't play down the number of hours it takes to craft, refine and deliver it. Any startup bent on raising seed capital should find the process excruciatingly painful because the end product will serve as the company's road map.
Ian Jeffrey and John Stokes, who are on a coast-to-coast road show with their workshop, reveal some of the biggest misconceptions and mistakes startups encounter when they write and deliver their pitches.
A pitch is neither a pitch nor a presentation
It's a performance, and the script you toil over will become your startup's 'guiding light.' That's why it takes so much time to perfect it.
Pitch the opportunity, not the product
To pique the interest of investors, pitch what they stand to gain – the potential you're building. But make sure they know you're capable of delivering the opportunity by discussing your track record as a team, the progress you've made so far, the metrics you're measuring (and why they're the right metrics), and your hypothesis or 'proof point.' "You aren't going to prove you can win," says Mr. Stokes, "but prove you have a chance of winning."
Whether they're competitors, legislation or shifting customer habits, it's important to demonstrate that you're aware of the obstacles you may face. Only then can you can speak intelligently about how you plan to skirt them. Discuss the tactical steps required to turn strategy into execution, and then the specific amount of funding you need, and the anticipated future investment once you've hit the next milestone.
Don't be the bearer of doom and gloom
Whether it's slamming a rival company or proclaiming "something is broken," it's best to avoid negative language where possible, Mr. Stokes advises. Not only does it leave a bad taste in the investor's mouth, it implicitly associates your startup with gloom.
Become a master storyteller
- A/B test your 90-second elevator pitch to everyone you meet, including strangers. “Look for the ‘Ah, ha!’ moment,” says Mr. Jeffrey. It’s that instant when the listener, head-nodding, finally ‘gets’ what your startup’s trying to accomplish. Write it down or record it in your smartphone, and insert that line into your next pitch.
- Learn to tell a joke. Of your friends, who are the best comedians? Why are they so funny? Though delivery is important, it’s an ability to line up or ‘plant cookies’ in the audience members’ minds that’s truly critical. If everything’s set up properly, you’re sure to knock the punch line out of the park.
- Timing is everything: slow down to make a point, speak faster to show progress, insert pauses to add drama, repeat points to underscore them, be confidence and assertive and practice.
- Don’t get defensive. No one likes a know-it-all who can’t take constructive criticism. Also recognize that your audience is comprised of intelligent individuals. Research past investments, prepare an investor data sheet in Excel that you can use as backup if questions are asked.
Your script should be short and concise
Be economical. Mr. Jeffrey and Mr. Stokes suggest you imagine that every word you use will cost $1,000. Summon Seth Godin's pithy style. Get to the point and mention your brand name as much as possible. Oh, and use Excel. It's an excellent tool for writing your script, and much better than PowerPoint.
The spreadsheet application helps you keep your script to one idea per sentence, and will let you A/B test your pitch using columns.
You can also prepare an investor data sheet in Excel which will keep you organized heading into the pitch. Using the worksheets function, include contact information, typical investment, last contact with them and your rating.
Use visuals, pictures, graphs and video, and if you're not confident, hire a graphic designer. The fewer words the better.
Don't do live demos
Always use pre-recorded and edited video and don't carry anything in your pockets. Murphy's Law dictates if something can go wrong, it will. So whether it's a malfunctioning demo or your smartphone going off mid-pitch, prepare for the worst. Stand straight, don't move around, make eye contact, hold the clicker steady in one hand, smile, never look at the screen behind you and don't say sorry. If something goes wrong, move on.
Bonus tip: The first time you meet a venture capitalist or angel investor, don't tell them about your company. Sounds crazy, right? Instead, discuss the industry you're in, explain the targets you've set and when you plan to achieve them, and then ask if you can follow up in six months. "The investor probably won't remember you," says Mr. Stokes. But if you get back in touch, explaining that you've met your targets and you are making steady progress, you're more likely to get that next meeting and possibly have the opportunity to pitch your business.
Ian Jeffrey of FounderFuel and John Stokes of Real Ventures recently offered IT startups a workshop on pitching for seed funding. The training session is part of a seven city, cross-country road show.