“13 Tips on How to Deliver a Pitch Investors Simply Can’t Turn Down” (Part 3)

__Know your product, your customers and your investor!

When investors listen to a “pitch,” establishing whether or not someone has a good business idea is the easy part. Most investors walk away because they’re not convinced they can trust you with their money. It’s really that simple. If I don’t tell you this, I will have done you a disservice. It’s nothing to be angry or bitter about.

This post must be read with the other two posts I’ve done on this subject. If you haven’t yet done so, I suggest you read them carefully, including my comments and those of your colleagues.

For those of you who missed last week, here’s a summary of Neil Patel’s first four pitching “tips”: 1) Take only ten minutes; 2) Turn your pitch into a story; 3) Be laser-focused; and 4) Explain EXACTLY what your product or service is.

Neil’s article continues with Tips #5 thru #8:

“5. Explain EXACTLY what is unique about your product or service.
If you are not producing or providing anything different from the run-of-the-mill widget, don’t even go to the meeting. Go back to your drawing board, and design something better.

6. Explain EXACTLY who your target audience is.
Use demographic and psychographic features to pinpoint your customers. Show investors a picture of a customer along with relevant data points.

7. Explain EXACTLY how you intend to acquire these customers.
Business success comes down to marketing. If you have a marketing idea, method, technique or process, this is your chance to showcase it. Contrary to pithy maxims, great products don’t sell themselves. You sell the product. To be persuaded, investors have to see an airtight strategy for getting the product to market.

Most VCs are well aware of the advantages of digital marketing and won’t take a second glance at a product that isn’t backed by a tactical plan for online marketing.

8. Explain your revenue model.
Investors invest because they want to make a return on that investment. An investor will care about your pitch if you can answer this question: ‘How will my company make you rich?’

The answer, in investor-speak, is your revenue model. Specifically identify which type of revenue model you are embracing, and how you intend to apply it. . .”

***

__By now you know that one of my favorite TV shows of all time is Shark Tank. I hope Neil’s excellent tips #1 thru #8 are preparing YOU to “swim with the sharks”! In my comments last week, I drew your attention over and over again to the need for you to understand investors. When you do your pitch, you must remember:

# Investors are not donors.

# Investors are not tourists.

# Investors are not philanthropists or charities.

# Investors have options.

If you have the opportunity to pitch to an investor, consider it a privilege rather than an entitlement:

# A good investor will never put money into a venture run by someone who comes across as arrogant, cocky or argumentative.

# A good investor will never put money behind someone who is dishonest, corrupt, or a thief. If you have a tendency for dishonesty or misuse of other people’s money, a good investor will find out before they give you a cent!

# A good investor will not put money behind someone who is careless or disorganized.

# A good investor will not invest in someone who is highly emotional. Being passionate is one thing, but being emotional is not acceptable!

# A good investor will not invest in someone who is political. You should understand the politics of your country from an economic perspective, but not come across as an active participant in politics.

Being a good investor is very hard!

__Your job is to show them that you can be trusted with someone else’s money.

To be continued. . .

11 thoughts on ““13 Tips on How to Deliver a Pitch Investors Simply Can’t Turn Down” (Part 3)

  1. Strive Masiyiwa Post author

    Afterthought 1.
    Go the extra mile to show the investor that you’ll be a good steward of their money. If you have any example (which can be verified) that you have been a good steward in the past, this is the time to mention it! The money you’re asking to be invested in your business or business idea, “belongs to another.” It might not even belong to the person sitting in front of you, but to a school teacher who has put it in a pension fund or retirement program.

    Reply
  2. Strive Masiyiwa Post author

    Afterthought 2.
    Show the investor that you understand why they would want to invest in you. It must be a mature appreciation. Nothing but nothing beats humility when approaching potential investors. (This does not mean to pitch without great energy and confidence!)

    Reply
  3. Strive Masiyiwa Post author

    Afterthought 3.
    “You have a good idea. Good. Now show me you have the capacity and discipline to execute and make it happen so that I don’t lose my money.” A good investor will not put money in someone who is all over the show and is not settled on what they do. If you are involved in lots of different businesses, you will not get money from a good investor!

    Reply
  4. Strive Masiyiwa Post author

    Afterthought 4.
    I always (always) use numbers to anchor anything I say in a pitch, even if I start with a story. Here’s a simple pitch that I used to open with: “In 1993 when I decided to launch my telecoms business, 75% of the African people had never heard a telephone ring. Today nearly 75% of the African people have their own cell phone.”

    #Did you see that? I pitch with numbers! In three minutes I can discuss a country, a market, an industry, and my business in numbers. I can define the opportunity in numbers. I can define the investment opportunity in numbers. It is a discipline, and I’m determined to pass it on to you!

    Reply
  5. Strive Masiyiwa Post author

    #Go Cameroon!

    Cameroon will be Africa’s representative at this year’s Confederation Cup, “The Curtain Raiser” to next year’s FIFA World Cup. Our first game is on Sunday!
    It’s time for Africa to bring home a big trophy…we are totally behind OUR team!

    You can follow the game (and the whole tournament) for FREE on Kwese Free Sports Channel (check on Kwese ESPN) to see which countries. It is also available to all customers who have a decoder.
    If you download the App you can also use your phone to watch!

    If you live outside Africa, did you know you can follow all our sports events through Kwese ESPN website? Try it! It’s how I follow most of my favorite sports.

    Reply
  6. Strive Masiyiwa Post author

    Nicky asks,

    By saying “Argumentative” you mean we should be “The Yes Investor” person where everything the investor says is what goes even though there could be better alternatives in existence?! I need to understand that Mr Strive Masiyiwa. Your posts are always informative.

    My reply,
    There is always a way to explain your position or to clarify something without picking a fight with the investor.
    For instance, if the investor is aggressive in their style, just keep your cool. Some investors do it to see how you react under pressure.
    Don’t interject, let them speak, and then quietly ask for an opportunity to clarify.
    In the end you do not have to accept their money, if it is offered on terms that are not palatable to you.

    Reply
  7. Strive Masiyiwa Post author

    Afterthought:
    There is story in the folklore of business about a business man who sat next to a young man on a flight to New York. Through the small talk the businessman learnt that the young man was on his way to speak to investors over a new invention. The young man asked him to invest for a sizable stake, and the businessman declined. Urban folklore says the young man was Bill Gates.
    I do not know whether this story is true or not, what is important is this:
    Those who are willing to listen to young people will prosper!

    Reply
  8. Strive Masiyiwa Post author

    Quiz #1 of the Week:
    Kwesé Sports will be hosting several really big sports events over the next three months. What are they? I will give a decoder to the first 50 people to tell me the right answer. Rules: Maximum of 2x winners per eligible African country. Existing Kwesé customers can opt for two months free service. Remember to put your answers ONLY under this Afterthought and don’t forget to tell us your African country.
    #Your source must be Kwese websites or tv (no guessing!)

    Note: You can only participate in the Quiz via my official Facebook page https://www.facebook.com/strivemasiyiwa/posts/139949726556432:1

    Reply
  9. Strive Masiyiwa Post author

    Quiz #2 of the Week:
    Name the three shows premiering this week on Kwesé TV. Give me the name of the show and the channel. I will give a decoder to the first 50 people to get the right answer. Rules: Maximum of 2x winners per eligible African country. Existing Kwesé customers can opt for two months free service. Remember to put your answers ONLY under the Afterthought, and don’t forget to tell us your African country.

    Note: You can only participate in the Quiz via my official Facebook page https://www.facebook.com/strivemasiyiwa/posts/139949726556432:1

    Reply
  10. Strive Masiyiwa Post author

    Ndidi writes,

    Sir, I’m afraid of an investor taking over ones business, at the point of money exchanging hands, what should the agreement look like? To protect both parties .

    My reply,
    The investor also lives with the fear that the investee will either misuse their money or simply vanish!

    The investor actually comes into the process with a lot more fears and concerns than you (the investee).

    It is extremely important to understand the investor’s position, even as you try to address your own concerns.

    When you watch a show like Shark Tank, besides the drama that you see on the show, there are two things that I want you to always keep in the back of your mind:
    1. The panel or investor will have read extensive presentations on the business plans before the show itself.
    2. The winner still has to enter into serious negotiations on the terms of the investment. Such agreements will be very tough, and will involve lawyers.

    You don’t just get a cheque and a phone call every few months to find out how things are going!

    Reply
  11. Strive Masiyiwa Post author

    Afterthought:
    If you harbor the dream of building your venture into a big company then you need to develop a deep understanding of investors beyond what you read in newspaper stories.
    You cannot build a big business using bank loans. You will need equity, and unless you have a very rich uncle or aunt somewhere, it’s time for you to really begin to study about investors.
    Here I have just touched on one tiny aspect of dealing with investors–the pitch. It is at best just an introduction, and I cannot spend more time on it, otherwise I would be writing for a whole year!

    Reply

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