Over the course of my career, I've probably made, I don't know, 20 to 30, maybe more pitches. I've pitched my company to investors, whether it was an initial funding or a follow-on funding, I've done a lot of them. I've also listened to a lot, because part of my career, I have been involved in for example, being on panels to listen to pitches made by early stage companies, I've been brought in as an expert to listen to pitches. And I've put together a list of things that I consider to be important to know about things that you should be doing and things that you should not be doing when you're doing a pitch session. So let's talk about what you shouldn't do first. There's a lot of them on this list. Don't be overwhelmed by them but just remember that these things are important and doing one of these can actually make people start thinking about the fact that you just said something that doesn't make sense, and then they're not going to hear the rest of what you're saying. So, when you're talking about projections, make sure that you have a plan that underlies those projections. If you talk about how much of the market you're going to capture and how much revenue you're going to generate and they say, can I see the underlying financial projections for that? And you say, I don't have any, then it's game over at that point. Make sure that you have everything you talk about, you have something underlying to support it. Never lie, try not to exaggerate, I should say try not to. But never lie. Do the best you can to be reasonable, make reasonable comments, and don't make things up, you'll be found out. And as soon as you're found out that you're lying or you're making unbelievable exaggerations, you lose credibility and the investor turns off. I've seen these a hundred times. I've seen people put together forecasts of their business, and they're starting with zero revenues in year one and the next year they've got two million in revenues, and the next year they've suddenly got 20 million in revenues, so ten times increase and by the fourth year they're making 250, 300 million. That just never happens. And I shouldn't say never because they say, never say never and always, but that rarely ever happens. And when you show those types of projections, again, they wonder how were you able to put these projections together. So don't try to show a hockey stick, because most people just don't believe them. I've said this many times, I'll say it one more time, don't ever say I have no competitors. They'll either think you don't understand your industry or they'll think that your market is too small because nobody else is going in to try to solve the problem that you're trying to solve. When you're talking about your company, focus on the positive aspects of the company. Every company has both positives and negatives. Emphasize the positives, don't talk about the negatives. If they bring the negatives up, try to address whatever they're discussing and don't dwell on it, right. Just basically tell how you solve the problem, address the negative objection, and move on. Don't stand there and read your slides, I've seen that before too. That happens a lot with some of the less experienced entrepreneurs who get up there and basically read each slide, bullet point by bullet point. First of all, that is very boring and the audience can read, so it almost comes across as if you're not giving them the credibility for the fact that they can actually see what your slide says. So, when you're talking about a slide, elaborate on the slide. Put analysis to it, add value to what the slide says. And then never ever become argumentative or defensive in a discussion. I've seen it happen. A lot of investors will use this technique, they'll say something which may be considered to be somewhat argumentative or somewhat critical and the entrepreneur immediately goes on the defensive and gets engaged in some type of a back and forth, that never works. So, if someone says something which you consider to be a negative comment, try to address it professionally. Again, address the comment and move on. Don't talk about how much the company that you want to continue to own after the investment's made. That's not something you should ever put in your pitch to begin with. And that's better left to negotiation when you're talking about the term sheet. If your not listening to what the investors questions are, that's a huge mistake. I've seen entrepreneurs do a pitch, then ask, are there any questions, somebody will ask a question and they'll immediately start answering something different than what the investor asked, or what perspective investor asked. Listen to what they're saying, make sure that you're talking about what they want to hear. Practice, practice, practice. Make sure that you get up in front a group of people who are friendly to you and run your pitch over and over, do dry runs, have people do role playing as the VC or a angel investor, and go through it and have them make objections and know how to handle them. Practices, practices, practices, right. You have to continue to practice this pitch before you ever get up in front of a group of actual investors who are interested in what you're doing. If you say to the investors when you first talk about your projects, all my assumptions are so conservative that I'm surely going to beat all of them, it's just a silly thing to say. First of all, they're going to say, why did you do that? And I don't know a good answer for that, frankly, other than maybe you're afraid to miss your assumptions and you missed your projections perhaps. Don't do that, right. Do a base case, then do sensitivity analysis to show what happens if your assumptions that you think are so conservative, don't actually come true. Make sure that when you get up in front of a group, you have your phone turned off, you have your computer closed so there's nothing that can possibly come in and interrupt you in the middle of your pitch. And then, once again, don't answer a question that hasn't been asked, number one. Number two, if somebody asked you a question and you don't know the answer, here's the answer you should give them. I don't know the answer. I'll get back to you. I'll find out what the answer is and then I'll get back to you. Prospective investors will respect you much more for that than trying to make something up, because most of the time if you try to make up an answer to a question you don't know, you don't do very well. So now we talked about the don'ts, so talk about what you should do. As I said in our earlier lecture, when you're talking to people look at them, engage them, don't look at the back of the room as if they don't exist or don't focus only on your Powerpoint that's behind you. Look at the group, try to figure out from their body language and their facial expressions, are they getting it, are they engaging. Engage the investor emotionally. If your product is one that actually limits itself to a demo and it's impressive, then you can do one, assuming you have enough time. Sometimes I would say that product demos are best left to another time. But if it works, then do it. Talk about what you've done in the past and how you've been successful in the past, and how you're going to apply that success to what you're going to be doing in the future. Investors like people with have experience and have been successful before. Talk about your team, talk about their strengths, don't emphasize their weaknesses, if there's a gap be willing to discuss it, but emphasize how well this team has been put together to work together. And if you've work together before as a team and had been successful, that's even better. Talk about the market, make sure that you demonstrate the fact that you know your market inside and out. The worst thing an investors going to hear is if they, if you talk about a market and you don't understand the underlying market. Talk about how your product is going to generate a competitive advantage which can be sustained and why it's better than the competitive product offerings. And then, don't down play the fact that you put together revenue assumptions and don't try to say, well these are all estimates and so I'm not sure I'll meet them or not, don't say that. Make the assumption that you have put together revenue assumptions that are reasonable based upon valid and sound assumptions and that you'll meet that revenue plan because that's the basis upon which one of the things that they are looking at when they're talking about doing an investment. Be willing to talk about the various things that can go wrong and how you would address them. Each case is individual, each company is different, so you have to do a brainstorming session and kind of ask yourself as a team, okay, here's our plan, now what happens if this competitor does that or let's say, one of the biggest competitors on the market decides to drop their price so low that it pushes us out the market. What do we do in that case? Be willing to have a plan for each potential major risk. Understand who your audience are, understand what their investment profiles are, make sure that you can even comment on some of the folks in the audience if you happen to have that information handy. Make sure that your presentation is targeting the audience. As I said in an earlier lecture, if you're talking to media, they like human interest stories. If you're talking to corporate investors, you want to emphasize that the team is well put together, and that there's no one person who, if they left, would cause us a problem. And then make sure, and this goes back to Guy Kawasaki's discussion about how he likes to see pitches, the 10/20/30 rule, leave time for questions and answers. Because if you finish your presentation and you have a number of questions from investors, that's actually a good thing. That means that they're engaged, they want to hear more, they want to understand how your going to address any objections they may have. If you finish your presentation and then you say are there any questions, and theres dead silence, then you probably have not done a good job of pitching your company. And then finally, when your pitching, always ask for enough money to get to where you need to be next. Don't short sell yourself when you're pitching to a group of investors, just because perhaps that one individual group doesn't have enough, let's say wherewithal, to fund the entire requirement, talk about your funding needs, talk about how your plans need X amount of money and how you're going to use it. That's why you're there, so make sure that you take advantage of that and talk about your funding needs. So, to finalize this discussion, you've only got a few minutes to catch the interest of the investors. A lot of pitch sessions are three minutes, five minutes, I've done both and I can tell you the three minute pitch is very difficult to do and make sure that you've covered all of the important things that you should cover in three minutes. Try to make a point and then move on. Don't belabor the point because again, you have a limited amount of time and you want to use it effectively. Don't make things up, don't hypothesize of what may happen, tell them how you're going to execute your plan. As I said before, hockey stick projections are unbelievable, most people just discharge them out of hand. I love this quote that says hockey sticks are best left on the ice, that's a perfect quote, you should remember that. Show that you're using your money wisely, you're spending it frugally, you're spending it on the right things. You have to crawl before you can walk, you have to walk before you can run, that's an old saying, but it's true when it comes to building companies as well. And never ever think you're the smartest person in the room when you're coming to making a pitch. It comes across that way, it comes across a very much of an arrogant type of a view and people don't like it. One of the things I've always told people when they ask me about how do I talk to people well and how do I put teams together, I've always said, I'm never want to be the smartest person in the room. I hope these points have been helpful to you. I wish you very much luck in making your pitches. I'm sure if you follow these points you'll be very successful.
