I talked about my love for Art Class and how that pertains to pitching in The Art Of The Delightful Pitch, but I think I'd be leaving out a significant part of the how-to pitch conversation if I didn't also talk about my enjoyment in Science Class. Dissecting, creating a magma explosion in a model volcano, studying how caterpillars crawl into a tight cocoon and emerge as a beautiful butterfly. It was all fascinating.
The thing with pitching is that in order to truly get the Art part of it, you must understand the Science behind it. Pull out your lab notebooks, clean out your beakers, and let's get to work.
The Science Of The Delightful Pitch
Be brief. 10-15 slides. We like 12. Don't talk for more than 15 to 20 minutes. Trust us on this one. On these slides, have the bare minimum and basic text needed to convey your point. The more pictures and graphics, the better. And please don't use bullet points. Steve Jobs didn't use bullets in his presentations and expressed his pitch through graphics, strong statements and pictures.
Uhhhh…Don't Fumble. Uh's, Oh's and Um's are hard to follow. Know your stuff. Know your numbers, know your team, know your market. You shouldn't need your notes because you should know your business and idea forwards and backwards—all of the holes, all of the negatives, and you should be ready to address these issues. What are the potential holes? Write them down and answer them to yourself first. It'll give you more confidence in your idea too.
Investor asks a question, "What about competitor X? They seem to have 80% of this market."
Fumble: "Oh yeah, well…we'll give it our best shot and see what happens…?"
Solid: "We've considered this. Their market is capped because their branding only caters towards the middle class. There's a whole new market that will open up in the lower class that is not even being tapped into yet...(and we have strategic relationships in those communities)."
Light the room on fire: Get Their Attention. Make listeners smile, laugh, get angry, relate, feel compelled. This opening often can take the longest amount of brain power, but the stronger you can make it, the better you'll be setting yourself up to win throughout the rest of the pitch.
Example: often when we start a pitch, we pass out pictures of Tommy crocodile hunting. We say something like, "Now before we get started, there are a few things you need to know about us…" Spread the pictures out on the table. "We're a little bit out of the ordinary. We like to crocodile hunt for fun, adventure excites us, and we believe changing the world is something that is attainable…"
We've got their attention. And the first question is usually about crocodiles. Be genuine. Don't say something like "I do base jumping off of Sears Tower," when you've never even been to Chicago. What makes you memorable? What will make them think about you again? It's easy to forget someone—make sure that's not you.
Do your homework. Actually have substance to your pitch. Use facts that are easy to understand. Note on statistics: do NOT state broad industry-wide standards, unless you can break them down into tangible, and helpful statistics that pertain directly to your business. "The social media industry has raised over $10 billion dollars in venture capital in the last 5 years and companies have sold for more than $15 billion dollars…"
That means nothing. Don't estimate based on industry stats. Break it down tangibly. "The mobile applications business is booming with Apple just reaching it's 50 billionth download last month. Breaking this statistic down, the mobile health industry has 1 billion downloads alone, 10 million of which are in Africa. Yet, there is no app on the market that gives Africans alerts as to when there will be a clinic in their area. Our app not only does this, but it allows corporations, governments, and organizations to track medical care remotely by XYZ…" Make the statistics relevant.
Make the text readable—keep it simple. Try to get across one point per slide. For more on presentation styles and software available, Jeremy Floyd wrote a helpful article here, you should check it out and put it to good use.
Make it understandable quickly. If you have a difficult-to-understand technology, do a demo, have a prototype—even if it's rough and handmade. Show me, don't tell me. Investors love show and tell. The more hands-on the better. It makes the pitch more exciting and real for them.
Be the professional you, but be you. Even though this is the tangible science pieces of investor pitches, don't come into it wearing socks with sandals and looking like a mad scientist (Note: if you are a mad scientist, have a business-minded person do the pitch for you). Be presentable, but don't overdress just to impress, and certainly don't make jokes or use big words you'd never use in regular everyday speech. "Ahem, thus and such, we have a parallel access with the perpendicular hypothesis…in other words, our idea could work."
Jargon and gobbledygook not welcome here, unless you're pitching to an investment team that have computer science backgrounds and understand what you're talking about. Watch your tongue—be calculated with what you say.
Focus on the money. And how the investor is going to get it back. No good investor will invest without at least discussing this in depth with you. Be direct, confident and open about your exit strategy.
Have an accurate company valuation. Please take the emotion out of this section. Get third party recommendations and valuations to base this on. If you don't know how to valuate your company, there are three basic rules to follow:
- The Market Approach: You are what the market will pay for you. In other words, if an investor says you're worth $1M, then that's what you're worth.
- The Calculation Approach: You can tell the market what you're worth with Comparables (similar companies to yours) and accurate financial forecasts.
- The I'm Making Money Approach: Let's be brutally honest, you're not worth much until you're profitable (or create massive value). You may have a patent or proprietary info that adds value (asset valuation), but until you can make money or have a clear path to revenue (income valuation), it's hard to justify value—unless point 1 or 2 are already in play.
Have a clear ask—we are looking for $50,000 and this is exactly what we're going to do with it. Don't balk here. You may be looking for an equity partner in exchange for connections and relationships. Maybe you're looking for a tech partner who can manage the things you're not sure how to do. Or you could be looking for any number of things. Think through this section and be sure to ask clearly.
List of don'ts:
- Don't validate your idea based on industry wide statistics or size.
- Don't predict $1 billion in year 5.
- Don't look at your notes (if you can avoid it). If the investor asks you for a statistic or financial metric that you're not sure of, then be honest and tell them you'll get back to them. Try to know up front, though.
- Don't try to impress. Try to connect.
A few other notes:
Body language is key—when relaying a message to others, your body language accounts for 55% of the overall effectiveness of what you're saying. Followed by 38% in the tone of your voice. Lastly, words accounts for 7%. This is why you've got to practice your pitch!
Don't shy away from showing your passion. Something about your idea or business makes you passionate. Show that passion, show your excitement and emotion. Couple that with a solid pitch and you'll have the entire room buzzing with anticipation and opportunity.
Take the Science and apply it with the Art of pitching and you'll be well on your way to connecting with investors and potential partners, delivering a spot-on and enjoyable pitch, and hopefully raising the much-needed support to continue your startup.
Art and Science go hand in hand—utilize them both and you may just have a truly Delightful Pitch.
Got a question? Need help with your pitch? Leave us a comment or send us a note.
(photo via james vaughan)
Posted on June 7, 2013
by Tim & Tommy filed under