7 Taboos of Business Pitching
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Whether you’re pitching your business to angel investors for the first time ever or just for the initial round this week, your mission is to incite their passion and provide compelling evidence of a potential boost to their bottom line.
And you will likely have less than 10 minutes to accomplish this and will compete against dozens of other businesses in need of capital.
As CEO of a medical device startup that has raised tidy sums to date, I offer my insights. Don't do any of the following or you'll blow your pitch by breaking these fundamental taboos:
1. Don't pitch every investor in your database.
Making a successful investor connection is more like using Match.com and less like kissing a lot of frogs before meeting your prince. Research what individual investors invest in and be sure to heed their criteria and industry preferences. Investors have limited time and focus on specific industries. If you reach out to every investor, you may fail to get to know the ones who can help your company thrive. Pitching to everyone on your list can harm your reputation when you go looking for capital for your next big idea.
2. Avoid cold calling each investor to book an appointment.
Always get an intro from someone an investor respects. According to Business 2 Community, only 2 percent of cold calls lead to an appointment. Investors often cite a cold call as reason to filter out those not advanced enough to research and prospect correctly. Additionally, today most people view phone calls as a major interruption.
3. Don't assume your solution solves a big problem.
Assume nothing! Be sure your solution solves a big problem. Most businesses aren't worth investing in because the upside is too limited. Investors seek to invest in low-risk, high-growth products and services that will return a profit.
Your product’s solution should be supported by research and the problem must be worth solving. After all, if consumers don’t see something as in need of a fix, investors won’t either. For example, as people sought ways to use their smart phones to perform tasks, the folks at Nest.com saw a need for a remote control for the homes and invented a suite of products to cost-effectively program temperature and security functions.
4. Steer clear of industry speak.
Every industry has its jargon. At its best, such language provides shorthand to let insiders communicate with ease. At its worst, some phrases bastardize the meaning of words and confer an air of truly unwarranted self-importance. Obviously in a medical or technical field, specific terms are necessary for clear communication. Be smart about learning and using those words correctly. I had to master some medical concepts to effectively speak on behalf of my startup.
5. Don't jump into a crowded category.
If you're considering launching a startup in a business category with a lot of existing players, be sure your company is differentiated. In the oversaturated cupcake market, Cupcakes by Melissa markets its merchandize with petite size being as its point of difference.
Me-too companies aren't exciting unless there's a big reason for them to succeed though others failed. What sets your idea apart? How will you market differently? Be sure this is clear, especially if your product fits into a trendy fad.
6. Shun working without a net.
Improv comedy teams might take risks but don't try this with the busy investor crowd. Practice your pitch to the point where you don't need slides, can give it at the drop of a hat and can modify it instantly based on the interests of an investor. Be sure you can summarize your pitch in five minutes and can also dive into a half-hour presentation. Prepare for any question an investor could ask. The quicker you can give a no-nonsense answer, the more likely an investor will want to move money toward your idea.
7. Don't let your delivery belie your intent.
One of the latest areas of market research involves emotion analytics or what a voice tells others about the speaker. Although you may think you are presenting in an earnest, intelligent tone, new technology can analyze your voice and might reveal you how tired and exasperated you sound.
Want to test and hone your delivery before you face your audience? A new app, Moodies, will record 20 seconds of your speech and provide a critique, letting you work out those pesky voice quirks before presenting to a crowd.
Do you have what it takes to be the next Alexander Graham Bell, Thomas Edison, Elon Musk or Steve Jobs? You won’t know until you try.