Recently I worked with some startups for LaunchKC and several folks asked me if I had my pitch “system” written down.
But after working with hundreds of inventors and entrepreneurs and sitting in on literally thousands of pitches I have seen some consistencies with those that work and those that don’t.I hadn’t, so I thought it was time I did. To be fair, you will find no shortage of people who will give you advice on your pitch. Nor will you have any particular difficulty finding a book on the subject.
The following is the system that I suggest but is by no means scientifically proven. It is just my preference — but sometimes having a system or a starting point can make all the difference.
Step 1: Establish passion
Establishing passion means to emotionally communicate — via story — why you are on this entrepreneurial journey.
This could be a crisis you overcame or a tragedy you want to prevent for others. I rarely see people follow this step but it is critical for two reasons. One, it gets the audience emotionally involved in your pitch and on your side. Two, investors look for passion because it can mean that you have a gear that others may not have. It indicates that “giving up” isn’t an option for you.
Chris Goode with Ruby Jeans Juicery does a great job of establishing passion by telling the story about how his grandmother, Ruby Jean, battled health issues and how that is driving his vision.
Step 2: Establish credibility
Establishing your credibility is how you put your audience at ease that you are not only passionately committed to a successful venture but that you also have the chops to back it up.
This is where you tout your education, professional experience, leadership capabilities and subject matter expertise. Equally important is your ability to convey your leadership abilities. Investors are not only investing in your idea and your traction but your abilities as a leader to grow the company to a point.
PerfectCube co-founders Mark Calhoun and Jim Starcev have a near perfect example of establishing credibility by touting both their ability to build, grow and sell a software company and their subject matter expertise of owning small retail shops.
Step 3: Identify the problem and your “why”
Identifying your problem might seem easy but this is where most pitches tank.
The more simply and succinctly your problem is stated, the better off you are and the better your pitch will go. I like to associate problem statement and your company’s “why” because they should go hand-in-hand.
Jason Tatge with local ag tech startup Farmobile killed step 3 with a hyper-simple problem that naturally dovetailed into his “why” by saying that ‘farmers should own their own data.’ It’s supported by him making a case that Farmobile is empowering the little guy: the independent farmer.
Step 4: Identify the “how”
“How” a company executes on a problem is typically what makes them great. Starbucks doesn’t have great coffee but “how” they execute the coffee experience is what made them great.
Your “how” is generally where your functional or conceptual competitive advantage lies and is therefore where investors get really excited. Blooom has done an amazing job of creating a simple and disruptive “how” by showing people the state of their 401(k) with the simplicity of a flower.
Step 5: Bullet point your “what”
By this point, if your audience can’t infer what it is you do you screwed up one or both of steps 3 and 4.
When it comes to your pitch nobody really cares “what” it is that you do. It almost seems illogical, but it’s true. The reason is because what you do doesn’t make you special and won’t communicate your competitive advantage. For this reason, I recommend bullet pointing your what to keep it simple and to the point. It will also force you to simplify what is almost certainly an over-communicated and unexciting element of your pitch.
Step 6: Show off your team
It is a natural tendency to talk about the size and scope of your people because our instincts tell us there is a direct correlation to credibility and the size of our team. This is untrue.
Sometimes the presence of a robust team can do the opposite. Hiring is a challenging and expensive endeavor and smart investors can spot good teams and whether they are the appropriate size based on industry, traction to date and other relevant business factors. Most of the time, less is more. The one time that boasting your team is a smart idea is when they strengthen an area where you have a potential weakness.
Step 7: Talk about your wins
General George S. Patton famously said “America loves winners.”
Investors and bankers aren’t much different. There are some clear rules, however, when discussing your wins. Oren Klaff discusses the law of averages in his book Pitch Anything, which states that the mind averages examples of wins that you state in a pitch.
What this means is that our mind will tend to dilute the perceived value of a win relative to the importance of the others that you mention. For example: If you have a two customers, one large company and one small company, don’t mention the smaller company because it dilutes your big win. This is another example where less is more and quality trumps quantity.
Step 8: End humbly
When it comes to concluding your pitch, I generally see two different endings. I call them the “know it all” ending and the “holy sh*t my presentation is over” ending.
The former is where you simply restate the contents of your presentation, which is what our college professors taught us to do, but is remarkably ineffective. The “holy sh*t my presentation is over” ending is where the presenter looks back at their screen and seem shocked that they have arrived at their “Questions” slide and then proceeds to stumble into the statement “Thank you, I would be happy to answer any questions.” Somehow, this ending tends to be roughly sum up roughly 50% of all presentations and it drives investors nuts.
Instead, I recommend asking a question to end your pitch. It can be as simple as “Thank you for allowing us time to meet with you today, our team is extremely good at what we do but we lack some things we need to turn the corner. We hope that with added strategic partnerships and guidance in acquisitions it will give us the bump we need to disrupt this market. If there is any advice you could offer us in this area based on your experience we would be glad to learn.”
This kind of ending will accomplish a couple important things. First, being vulnerable and showing you know where your organization is strong and where it needs help will show a humble and teachable nature — a characteristic that is highly desirable to investors. Secondly, you have directed the conversation after your pitch into an area that you want to talk about.
Remember, the most important part of a pitch is what happens in the conversations after it is over.