|By CAROL ROTH|
It's time to wrap up Make Your Pitch, and it is striking to me that even with the feedback on each pitch, we received very few pitches that nailed it. That being the case, I thought it might be useful to review some of the lessons we've learned.
Specifics trump generalities: Concrete figures, numbers and statistics add scale or a benchmark to your opportunities and accomplishments. Saying that I have raised a lot of capital for companies does not have nearly the impact of stating that I have raised more than a billion dollars. Saying you have a large market opportunity doesn't resonate in the way that saying you have had
Use the same specifics-over-generalities approach in the tactics portion of your pitch. In the TugCam pitch, for example, instead of glossing over marketing, the pitchers said specifically that they were going to leverage insurance companies who were willing to provide policy discounts as a means to reach the end users. The more detailed you can be, the better.
Founders can inspire confidence: The video pitchers have ranged from very nervous to cool and collected. While being in front of a camera – or even another person – can be a bit uncomfortable or intimidating, it's critical to remember that the main thing that an investor is banking on is you. You have to instill confidence that you are someone who can execute, and if you come across as anything less than fully confident, your chances of executing a successful pitch are slim-to-none. Also, know the difference between being confident and being arrogant. Being secure is desirable, but being a know-it-all is a turn-off.
Simplicity sells: In terms of business models, the KISS principle (Keep it simple, stupid) continues to reign. The more complicated the business opportunity, the more challenging it is to understand and to execute. Do something and do it well; then, you can branch out into additional products and services. If you try to accomplish too much up front, you risk losing investor interest.
Take some risk out: To investors, ideas are interesting, but execution is better. Plus, the more you can achieve in terms of milestones, the less risk there is for an investor. This can range from creating prototypes to finding paying customers. The more risk you take, the less you demand of an investor, which increases your credibility, shows that you have skin in the game, and demonstrates that you can execute.
Explain how you are making money: No idea is interesting to investors if they can't make money from it. Be clear on the business and revenue model. How much do your products or services sell for? What kind of profit margins are there? How exactly do you make money? This is a critical focus for any business and needs to be addressed clearly and concisely.
Anticipate and counter objections: When you discuss your business idea or practice a business interview, there are going to be objections — stumbling blocks that will come up over and over from any savvy investor or interviewer. Know what those objections are and address them up front. Hestia Tobacco did that effectively when it acknowledged that it had a major competitor, American Spirit. Where you can, be sure to anticipate negatives, address them head-on and turn them into positives.
Communicate your differences: Ideas are only as good as the execution behind them. When you pitch, be clear about your secret sauce. Tell the investor what you are doing that is different from what everyone else does. Also, be clear if you have any protection on your difference (such as partnerships, patents, etc.). Furthermore, when it comes to execution, be clear about experience, qualifications and resources that you bring to the table to make you the absolute best person or team to dominate your market opportunity.
Know what you want – and communicate it:AmericanWay was very clear in its pitch that it was looking for a loan at a certain interest rate. Know what you are seeking from an investor in terms of the amount of capital and what it will be used for. Be clear about whether you are looking for equity investors or lenders (or perhaps you are flexible). A great pitch can be wasted if you don't conclude by suggesting the next step.
This may seem like a lot of information to incorporate into a short pitch, but with practice, you can nail it.
I wish you much success in your professional endeavors.
|Copyright:||Copyright 2012 The New York Times Company|
|Source:||New York Times Digital|