Ten Rules for Pitching Your Idea
So you need to raise capital to take your innovation to the next level. Few people like to ask for money. It can be uncomfortable and can sour relationships. Don’t worry I am not going to pontificate on the dangers of money. However, I would like to give you ten rules that will assist you in making your pitch to potential investors.
Rule One: Ask for an Investment
Let’s start with the most important thing, you are not asking for money, you are asking for an investment; this means that they provide you with money now in return for something of greater value in the future.
Rule Two: ROI
You can’t ask for more then you are ultimately giving. Sure this seems obvious, but you must crunch the numbers. What will it take to give your investor a good return on investment? Many people ask for an investment based solely on how much money they think they need. Ask for an amount of money that will maximize the potential for a high return on investment.
Rule Three: Don’t Hide Anything
Don’t hide anything, the second you try to hide something about your innovation you’ve lost an investment. Investors are not afraid of risk and they do ask the tough questions. If you try to hide something, three things will happen. One, they won’t know if you are hiding something even bigger. Two, they will not trust you. And three, they will not invest their money with you. You are always better off giving direct answers.
Rule Four: Check Your Attitude
Don’t presume you are doing the potential investor a favor by allowing them to invest in your innovation. No matter how great the investment opportunity is, they are doing you a favor. If you have a high and mighty attitude, you will turn the investor off. Yes you are presenting a great opportunity, but don’t ever say they words “I am doing you a favor”.
Rule Five: Know What You Are Talking About
Know your innovation, competition, market, business plan, risks, etc. forwards and backwards. That way when they interrupt you to ask a question, you actually listen and don’t get flustered. This is an important aspect of the pitch as the investor wants to see how you respond under pressure.
Rule Six: It’s a Conversation not a Speech
Be careful about memorizing too much of your pitch. If you do memorize your pitch remember to make eye contact, don’t speak in a monotone voice, and most importantly don’t be flustered when they interrupt you to ask you a question. Remember a pitch should be a conversation, not a speech. Don’t respond to a question by saying I’ll be getting to that next. Answer the question.
Rule Seven: Know Your Investor
Know your investor well enough to know what they expect of you. Dress appropriately. Tailor your content to the individual. For example, if your potential investor made their money as a marketer, then you may want to spend a bit more time on your marketing plan.
Rule Eight: Respect their Time
Don’t be late or stay too long and make sure you come to the meeting prepared.
Rule Nine: Give them Context
You live and breathe your innovation; the potential investor doesn’t so give them the context to understand. The best way to do this is to clearly state what your need innovation solves at the beginning of your pitch.
Rule Ten: Be Sensitive to the Close
As the meeting nears the end you need to have a feel for what is appropriate. Should you push for a decision, or is it better to ask for a second meeting? I would suggest that if this was a formal pitch, ninety-nine percent of the time you should push for a decision. However, if this was a more impromptu to pitch (like during a round of golf), then ask for a second meeting.
I hope these ten rules assist you in preparing you innovation pitch. I will continue to write about making pitches to investors including more on the specific content of a pitch and how to obtain an opportunity to pitch your idea an investor.
