The Perfect Pitch
An MVP for your fundraising pitch and the 4 things you need to accomplish.
This article is an excerpt from Dancing With The Sharks: How to pitch investors, learn from rejection, improve your company, and get funded.
A Pitching MVP
Here’s the MVP of a perfect pitch:
I have a machine that prints money. It’s proven and exclusive to me, I am trustworthy, I have done this before and have made others money. You can buy a share in it from me now, and if you don’t the person next to you will. Thank you, goodnight.
The Goals of Pitching
A successful pitch needs to accomplish only 4 goals. All rejections by an investor are due to a failure to achieve them.
Generating Enthusiasm & Greed.
Keep in mind your most important goal: to convince the investor you will make money for them, you can execute, and that if they don’t invest now other investors will flood in to take their shares. You’re instilling greed and FOMO (Fear of Missing Out).Delivering a message like the MVP above is your primary goal. And, if they don’t get spooked, people want to believe in this kind of deal, which is why the stock market has so many investors. even though most have done little diligence and know little about their stocks.
Details beyond the basic message above are only needed because you also need to Overcome Skepticism:
Overcoming Skepticism.
The message above would be enough, except investors aren’t naive and won’t believe it without wanting to look under the hood. In particular, they need their misgivings and skepticism defused. This is why you are forced to expand on the basic pitch and detail the Product, IP, the Market, the Team, the Business Model, and all the other items that make up a standard pitch deck.
In going into these details, do so in a way that generates enthusiasm, not FUD. Ideally, the investor should remember your positive messages, and have a warm sense that all their misgivings have been defused.
To be understood and memorable, you need to tell a story and it needs to hit all the notes where skepticism might dwell. There are many articles on what those are, and I particularly like Darren Cooke’s great presentation on how to tell that story.
Establishing Rapport.
An investor who believes you can execute and you can make money for them will still not invest if they don’t trust you or they believe working with you will be a source of stress and contention.
You need to be someone with whom they’d be excited to work. Don’t confuse this with being so pleasant that you come across as deferential and easily manipulated. Investors need to know you’re a fighter, as they depend on your fighting for their success, but that you won’t fight them unless it’s for their own good, and even then will be fair and civilized.
Finding a Qualified Investor.
This is essential prep work. A backer who isn’t able or willing to write a check at the moment, can’t invest in you.
They may not be actively investing at any given time. They may have just made a large bet elsewhere or be in an exploration-only period. They may not be knowledgeable or actively dislike the markets you are addressing.
They may specialize in earlier or later stages than your company’s.Pre-qualifying investors by studying their other investments and recent activities will help ensure you’re pitching to someone who can, if you do everything else right, actually invest. And some investors invest more frequently than others, for example new funds in their first years, so pitching prolific investors raises your chances.
What Does the Investor Need to Know?
Learning from your Pitch
Once you trot out your new pitch you’ll get reactions and feedback. Dancing with the Sharks will help you interpret it to improve your pitch and get funded.
Marc Meyer is a long-time Silicon Valley technologist, founder (6 startups, 3 exits, 1 IPO), executive, investor, advisor and teacher. He has invested in and advised over 100 companies, chairs the Advisor Council at Berkeley SkyDeck, is on the Selection Committee of HBS Alumni Angels, advises at multiple accelerators, and has an Executive Coaching practice helping leaders achieve their greatest potential.