Entrepreneurs: When You Pitch, Leave Them Wanting More

Today’s topic, once again, is investor pitches. Now, of course, this isn’t the first time I’ve given you some tips for how to win the hearts and wallets of investors, but today I want to focus in on a very specific aspect of the pitch that trips up the vast majority of entrepreneurs I work with. Since I spend so much time tackling this issue with my clients, I figured it was time to make a video. So what am I talking about?: The idea that you need become adept at being concise, while also conveying your depth of knowledge.

A common mistake new entrepreneurs make when pitching to investors is that they either give waaaaay too much information because they think need to cover every detail of their business, or they don’t give enough to keep an investor’s interest. If you want to successfully raise investment, you have to find the balance, so let’s tackle the two opposing sides of what is really this one issue.

I’ll start with those of you who give way too much information. I know there is a lot to tell. I know this is your baby. I know every projection you’ve calculated makes the case for why your business will be a home run and you can’t live with the thought that if an investor passes it could be because you didn’t show that one last graph. It doesn’t matter. Your job is not to make every single investor in the room an expert on your company within the first pitch meeting. That would be impossible and the investors aren’t interested in the knowledge dump yet – first they have to decide if there is something interesting enough about your company to warrant the effort it would take for them to become knowledgeable about your business. Resist the urge to throw everything but the kitchen sink in your presentation.

To help you trim the fat, here are some rules to live by:

  • #1: Tell your business’ story as if it were the TV movie for you business – just the highlights. Don’t go with the complete, unabridged history – that puts people to sleep.
  • #2: Know your time limits – find out how long you’ll have to talk – it’s going to be just a few minutes – and don’t go over that limit or forget to leave time for questions.
  • #3: Leave them wanting more – get in there, describe the problem, tell ‘em how you’ll solve that problem and how you’ll access that huge market you’ve sized out so that you can get them a big ol’ exit, and then get out of there. If you’ve created some new gadget you shouldn’t start off with a recounting of the discovery of electricity to explain how you power it.

On the other side of this though, are the many entrepreneurs who don’t give enough information. It’s a very delicate balance and you have to walk the line between drowning them in unnecessary information and not giving them enough to pique their interest and earn their trust. There are two main reasons so many entrepreneurs end up giving too little information: either they don’t actually have enough information and aren’t ready to be pitching yet or they have taken the first bit of advice I gave you and run too far with it. If you’re not ready to pitch, maybe I can help. If you’re one of those who’s just taken the “be brief” advice way too far, it’s usually because you’ve gotten too close to your business and forgotten that not everyone else knows what you know. You’re an expert on your company, but you’re talking to novices when you pitch so you do have to lay the groundwork for them or they won’t know what you’re talking about. When you’re living and breathing your business, it’s very common that you’re simply in so deep you can’t tell what’s clear in your pitch and what’s not clear anymore.

The trick with the pitch is to give just enough information so that the investors are interested, they want to learn more, and they trust that you’ll have answers to all of the questions they still have for you. You don’t want them to not have any questions – that would mean you’d given way too much info – but you also don’t want them to think that you don’t have that info at all, just that you didn’t share everything because you were focused on keeping the presentation streamlined. Now, if the question is, “What does your business do?” at the end of your presentation, you’re in trouble, but questions that probe more deeply into information that you have or calculations that you’ve made but simply didn’t have enough time to share are exactly what you want.

In order to find this balance, you simply have to practice, practice, practice – and you have to do so in front of an audience that does not know your business inside and out so that they can give you honest feedback about what was clear and what wasn’t. Practicing your pitch in front of your cofounder isn’t going to give you what you need because he or she also knows your business inside and out and will likely have the same blind spots you do. Try to find people who are smart and whose opinions you trust, but who have little to no knowledge about your business. Those are the people you want to practice your pitch in front of…and remember that you’ll need to constantly get fresh new faces for this as you continue to improve your pitch because, as your faux investors get to know the business, they become unable to give you that truly unbiased feedback that you need.

Finding the balance between too much and too little information in an investor pitch can be tough, but with some practice and some outside help, you’ll get there and drastically increase your chances of landing the funding you’re after.

 


If you’re an aspiring entrepreneur, the best thing you can do for yourself is to just get started. Pick up my business planning ebook here to be guided through the whole business planning process for less than $5.
More of a video person than a text person? Click here to try my ecourses instead.

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