Q: I keep getting great feedback from my investor presentations, but I can't seem to get anyone to hand over a check. What am I doing wrong?
A: Persuading investors to put money in a startup business is never easy, especially in times like these. If investors like your business plan and the terms you're offering, but you still can't close the deal, maybe it's time to step back and ask yourself how effectively you're making your pitch. Think about it: Angels, venture capitalists and other professional investors sit through dozens of pitches from companies like yours every month, and, if you're going to grab their attention, you have to find a way to stand out from the pack.
Elyissia Ayn Wassung, founder and CEO of Parlin, New Jersey-based 2 Chicks with Chocolate, is raising money to launch a chain of make-it-yourself chocolate stores. She believes the best way to make investors' mouths water is to pitch the total experience, not just the facts and figures. "The PowerPoint days are over," Wassung says. "Show your story in pictures and use the least verbiage possible on your slides, then talk about all of it so your passion really shines through. Your passion is what's going to get investors to write that check."
Wassung says she typically starts each pitch session with a little chitchat as potential investors walk in the door, "sort of like a cocktail party." Next, 2 Chicks' chocolatier talks about his creations and dazzles the attendees with his chocolate-industry savvy. Then, Wassung thanks the investors for coming and dives right in to her presentation, a quick 20-minute pitch that allows time for questions. All the while, the investors are nibbling delicious chocolate treats. "Before we go, we ask if this is a project that interests them and, if so, what their level of interest is: fan, customer or potential investor," Wassung says. "Lastly, we thank them for coming and ask them to tell their friends about 2 Chicks. And, of course, we send them home with chocolate."
Sure, not everybody who's raising money to start a business can hand out that kind of sweetener to close the deal. But no matter what kind of venture you're pitching, you'll get a lot further if you sell the sizzle and not just the steak.
Be sure to consult with your attorney to make sure your pitching strategy complies with federal and state securities laws.
Rosalind Resnick is the founder and CEO of Axxess Business Consulting, a New York City consulting firm that advises startups and small businesses. She can be reached by e-mail at firstname.lastname@example.org or through her website, abcbizhelp.com.