Here’s the truth about raising money for your business: Investors don’t want to hear your pitch. Yes, they want to understand your idea to determine if your concept is a sensible investment for them, but they don’t want to hear some generic pitch -- or watch you click through 20 PowerPoint slides.
Why? Because a preconceived pitch ignores the factors that lead to an investment.
A pitch focuses on your business and your idea. While having a great idea is crucial to securing an investment that alone won’t get you funding. Investors will take the plunge only if your great idea fits their investing needs and interests. Because a pre-determined, one-size-fits-all pitch cannot possibly take into consideration the specific needs and interests of an investor, the best approach is to ditch the pitch and replace it with something much more effective: a fresh, personalized conversation that the investor will care about.
For those entrepreneurs who are hesitant to try this approach, I have a few tips to make the transition easy.
Think conversation, not presentation. Don’t think about the presentation you want to give to a potential investor. Think about the conversation you want to have with him. Yes, you will need to start the meeting with a statement about why you are there, but use this as an opportunity to start a dialogue, not to deliver a monologue. Remember: If you want to connect with an investor and persuade him to write a check, you need to identify his reasons for investing -- not tell him your reasons that he should invest.
Figure out what’s going on behind the scenes. As you start a conversation with a potential investor, recognize that your first challenge is to listen, observe and learn. Take stock of the investor’s character and situation to understand what her reasons for investing may be.
Move the conversation forward. It is critical to create affirmation and agreement so that your conversation gains momentum. As you engage the potential investor in dialogue, look for ways to take the conversation to a higher level. Find out what he really cares about and then heighten the conversation by discussing why these things are important to him.
Focus the conversation on the investor. Resist the temptation to talk only about your idea. Instead, have a conversation that is mostly about the investor and his interests and gently weave threads of your story into the narrative he is most familiar with: His own. Unlike a pitch, where the main focus is you, your business and your idea, aim to have a conversation where 95 percent of the conversation is focused on the investor with only five percent focused on your idea.
Remember, just because your pitch sounds great when you practice it in the mirror does not mean it will sound great to an investor -- in fact, just the opposite could happen. Instead, practice these tips, ditch the pitch and ultimately erimprove your chances of securing an investment.
Related: Here Is How to Get a VC's Attention