I've probably heard thousands of pitches in my career, so by now I've developed a pretty good idea of what works and doesn't when approaching investors. Pitching is an essential skill for any entrepreneur, and today, in the interests of raising the bar, I'm going to focus on what you shouldn't do:
Don't forget to tell investors what's in it for them
Investors are not heartless people (well, not most of them, anyway), but they do tend to be pragmatic ones, and the main reason they're listening to you at all is because there might be something in it for them. So if you're asking them to fork over money, you need to focus on what they're going to get out of it. You need to see your proposal through their eyes. This is absolutely fundamental and yet so often overlooked. Too many people go on and on about how their proposal is going to be a great growth opportunity for them, which is nice, but not all that interesting to the investor. This is business, not a charity. Unless you can make an investor understand why giving you money will be good for them, my advice is: don't quit your day job.
Don't deliver a sermon from the mount
Think of it this way: If you're trying to convince your kid to stick with playing an instrument or learning a language, you're unlikely to get very far by waxing poetic about the intricacies of the knowledge they'll gain, or railing on about how much money and time you've already invested in their education. All that's going to happen is that their eyes will glaze over. You have a far better chance of getting them to see things from your prospective if you focus on all the good things they'll get if they keep at it. Come to think of it, investors aren't really all that much different than kids. They have short attention spans, they like to be entertained, and they tend to warm to people bearing gifts.
Don't be vague
Make sure you have a plan in place and have modeled out what you're going to need. In detail. The number one mistake I see would-be entrepreneurs make is asking for money before they actually know what they need. How much ramp time do you estimate you'll require before you become profitable? How much time and how many resources will you have to put in? Put a dollar figure on absolutely everything. Make it clear exactly what you need and what an investor can expect to get in return. Investors may be dreamers and risk-takers, but they like making money. For them to take a flyer, they need to see numbers.
That's it for today folks, but stay tuned, because I plan to touch on this subject more in the coming days. In the meantime, I'd love to hear your tales from the pitching front.