I just came back from several networking events and the one question that I’m constantly asked is “who are you?”. So I tell them what I do. Then they ask me what company do I work for, to which I reply as well. But then here’s the interesting part…they ask me what my company does. And that, my friends, is the pitch that people are always paying attention to. So as you’re planning on getting your company noticed, what is the pitch you’re giving your network, investors, clients, strangers, etc? Just how are you framing your “elevator pitch”?
According to Scott Gerber from Entrepreneur.com, there are six (6) steps to creating the perfect pitch, especially when looking for investors:
- Less is always more. Remember that your elevator pitch should not last any longer than 30 seconds. You have very few and precious moments with your “target” so don’t plan on dropping all your knowledge in as little time as possible. Instead, just be succinct enough to leave the pertinent information to entice them to want to find out more at a later time. According to Gerber, investors need to be confident that your business will attract and retain customers. If they don’t grasp your concept in a short time span, they may presume that customers won’t understand it either.
- Never hypothesize. Execute, execute, execute. Investors don’t want to know theories or unproven facts. Show them that you have real figures and proof that you can actually make happen what you say. A company with cash flow, a track record and real-world experience has a better chance of getting investors than a business plan forecasting large returns.
- Leave the hockey sticks on the ice. Don’t be nonsensical. Present realistic data and information. You can show them your 50,000 ft view, but don’t exaggerate or investors will lose interest. Show investors that you have a grasp on reality with three versions of financial projections: best case, moderate case and worst case.
- Learn to love discount stores. Don’t be too conservative in your projections, but try and be as cheap as possible. Show that you’re fiscally responsible. Investors want you to be in a position where everything is on the line.
- Rome wasn’t built in a day. Your business won’t be either. Before you ask for hundreds of millions of dollars from your investors to help fund multiple ventures, Gerber suggests that you sit down and prove that you’ve actually got a strategy to work on the first venture. Show the investors that you’re serious and have the means and the skills to make your first venture a success and pay out. In other words, demonstrate that your business can crawl before you say it can walk.
- Choose not to be the smartest person in the room. Don’t try and be the smartest person in the room. Instead, understand your limitations and bring in the appropriate help to address any weaknesses in the group. You can’t do everything by yourself so be prepared to bring in people you trust and are skilled in the areas you are not.
So how do you go and find the right investor? Well you should take a look at Guy Kawasaki’s thoughts from his book Reality Check on how you can attract the attention of investors you want – many of which will make sense.
First of all, do your homework before you approach any investor. You’re going to need to make sure that Sally Sue or John Doe actually invest in your industry. If they don’t, then you’re sure to be wasting their time and yours. Find out more information about what other investments they make and other things that will reinforce your belief that these are the right people – don’t pick them just because their name sounds familiar or they have a lot of money to give.
So how do you get introduced? Kawasaki believes that you can do so through a variety of ways – by a partner-level lawyer, a professor of engineering or through an executive of a company that is being funded by the investor you’re reaching out to. In an earlier post, I had a chance to hear straight from venture capitalists how they want to be contacted, and the similar belief amongst the VCs was that you needed to go through a referral source. The best way is to have someone close to the VCs make the introduction – going through a cold call might not be the best way to get your foot in the door.
In short, make sure that your elevator pitch to investors and interested parties is succinct, relevant, and factual. It should be addressed to the investors you truly think are relevant to your company after being introduced by a close associate.
Now pitch away.
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