Listening in on some VCs who were answering questions from interested entrepreneurs, one question was “what’s the worst pitch you’ve ever heard”.
Well one bad pitch that the VC felt was not well done, apparently “too hard of a sell”, was followed a few weeks later by the entrepreneur being arrested! So that definitely qualified as a “bad pitch”. But several investors had some good tactical tips for entrepreneurs wanting to maximize the value of their time in front of investors and increase their odds of getting interest.
1) Don’t take a conversational approach. Apparently some entrepreneurs are getting advice to be relaxed and conversational, but investors usually prefer a focused approach – an agenda, key points and objectives, and answering the key question “What is the Opportunity?” Conversational seemed to be equated with “meandering” and “wasting time”.
2) Follow a good pitch presentation model to communicate those essential items as efficiently as possible. One VC mentioned an entrepreneur who spent 40 minutes (of a 30 minute pitch!) just covering their own background! Wow! (in a bad way). In our online course Designing the Perfect Investor™ we coach you through several choices of pitch deck models so you can deliver a “Wow!” presentation that covers the key points that matter to potential investors. “Team” is in there, but I can promise it’s not 40 minutes and it’s not first!
3) Don’t say to a potential investor “we need your money to keep the lights on”. That’s not the view of investors about how their money should be used. Their money should be used to go after “the next milestone”, the new growth phase etc. If you don’t know how to position how you’re going to use investors’ money….get some good coaching!
4) Make sure to be honest up front. This includes, of course, the essentials of integrity in general. But one area where investors want honesty is in your vision of the “end game”. Are you committed to an 8-10 year journey with these investors as your partners? Do you want to get big and grow a substantial company? Remember, VC’s want 10-100 X return on their investment. A couple million dollars might make you happy, but not your investors.