Have you seen the Angels Gate series in Channel News Asia? If not you can watch it here ONLINE. It’s a reality show about entrepreneurs trying to obtain funding from the investors (aka, the Angels). After watching a few episodes, I believe we can all agree that apart from having a solid business model, the ability to pitch our business is a something that an entrepreneur must have.
A few days ago I saw a posting by Oren Klaff listing down his pitching strategy. I think it’s relevant, especially if you are harboring an idea to start your own business. And I am listing it down here hoping that it will be somehow permanently engraved in my brain 🙂
Recognize your own value so you’ll have confidence
An analyst was asking Oren lots of nitpicky questions, but Oren viewed himself as the prize of the deal so he had the confidence to turn the questioning back on her and ask how she added value to the deal.
Take Action: Think of yourself as a prize that investors have to compete for, and don’t feel you need to beg to get funding.
Start with big ideas to set the context for your pitch
Oren was raising capital for people who built protective ecosystems in Peru, and he started the pitch by saying that to save humanity you have to solve big problems like climate change, pollution, and species loss, and that species loss stands out because it’s irreversible.
Take Action: Before you mention your product, talk about the big ideas that motivated you to create your product and point out the problem you want to solve.
Compare solutions to the problem to show that your product is the best one
Oren recommends describing a generic solution, listing your competitors’ solutions, and then introducing your product and explaining how it solves the problem.
Take Action: After you’ve highlighted the problem you want to solve, compare your product with other potential solutions and show that you’ve found the right way to address the problem.
Reveal your project’s stage upfront to save time
Oren says that one entrepreneur should have disclosed his project’s stage at the beginning of his presentation, but he didn’t so he had to face questions like “Are you profitable?” after going through an hour-long pitch.
Take Action: Start your pitch by talking about project details like how much money you’ve raised, how many employees you have, and how much revenue you earn.
Negotiate with multiple investors so you won’t have to accept unfavorable terms
Oren recommends meeting with several investors, narrowing the field down to three who are seriously interested, and negotiating with those three simultaneously, because if one insists on terms you don’t like you can sign a deal with one of the others.
Take Action: Negotiate with at least three investors at the same time, and don’t talk to one investor exclusively before you close a deal.
Set a time limit to show you aren’t needy
Oren says that entrepreneurs who pitch to a hedge fund intake committee should limit themselves to an hour, but some of them talk for three or four hours and it looks like they have nothing else to do.
Take Action: Establish a time constraint at the beginning of a meeting with investors, and give your pitch in 20 minutes.
Create and resolve tension to keep investors listening
Oren suggests that an entrepreneur could say, “I’m not sure we’re going to work well together because you might want us to over-focus on products” to grab investors’ attention and then say, “But having some guys who are so focused on products and engineering combined with our business development skills might be a good thing!”
Take Action: Create tension by bringing up a possible conflict with investors, then resolve the tension by giving a reason the conflict won’t occur.
Save interesting points for later so you can use them to win investors’ attention
When Oren pitches for a genetic testing company, he mentions that it tests athletes late in the pitch because that’s a novel point and it brings back investors’ attention.
Take Action: Think of some new and surprising things your business does, and talk about them at the middle or end of your pitch if your audience seems to be losing interest.
With slight modification, we can use this techniques for other purpose other than pitching to investor. If you’re an employee in a company, you can use these techniques to make your next PowerPoint presentation more appalling to the audience.