As an entrepreneur, one is pitching almost every second of every day. You are pitching to investors or debtors for access to capital, pitching customers to buy your product or service, and pitching your supply chain vendors and other partners to work with you and give you value for dollar. The nature, extent, scope and tone of the pitch have numerous permutations and combinations depending on the scenario.
I reflected on this recently when I was a judge in the New Jersey Social Innovation Institute (NJSII) Pitch Day. Thirteen social oriented ventures were in a business pitch competition where they were competing for growth capital. The businesses were already in existence, and covered a wide range of industries and value chains such as those in health and wellness, education, recidivism, IT services, sustainable architecture, urban organic food planning, parenting, construction incubation and more.
There Is a Pattern
After judging the 13 businesses over the day, the panel of judges remarked that consistent themes and patterns emerged in terms of what constituted successful pitches. As well, there was a pattern in the ingredients and behavior present in bad pitches.
Here are 5 tips to make The Money Pitch:
1. Solid Business Plan. Professor Jeffrey Robinson of the NJSII and Rutgers Business School said "the businesses that won the pitch competition all had well developed and solid business expansion plans. The plans were clear and you could understand how the capital was going to be used."
The substance has to match the form in any pitch. The underlying business plan and strategy has to be soundly formulated, and supported by the necessary data, financial analysis and assumptions. Existing financial statements and pro forma financial statements to communicate the financial picture around the expansion must be complete and substantiated. Articulate what you will use the capital infusion for and how this will impact the operating and financial outlook.
Some of you may think that I am stating the obvious. Is it? Let me let you in on a secret. Many people are afraid of numbers. Even people working in finance or at the executive levels are afraid of the numbers. Don't be. Quantification of your current position and where you are trying to go as a business owner is a standard language of business, and conveys the level of seriousness and impact. It also helps to manage expectations.
2. Sustainable Business Model. In social enterprise, often people mistake "social" for not for profit. Social ventures can be both for profit and not for profit. Janice Shapiro, Director at the Support Center for Non Profit Management and a fellow judge at the NJSII Pitch Day, said "with social oriented businesses, people focus on telling the feel good story and tugging on the heart strings. It does not matter if it is a for-profit or non-profit enterprise, I want to know the fundamental business model."
In any type of organization, sustainability is key. The business model should be clearly articulated. This includes what are the revenue and cost streams. In other words how does the organization make money and what inputs does it need in order to do so. Is this business a black whole and is the expansion capital just going into a "feel good" money pit? Or is there a well thought out, credible and viable business model?
3. The 5 "Ws": Who, What, Where, When Why and How. Do you recall in English class in elementary school, the teacher would tell students that when you are writing a story to include the 5 "Ws" and the "How"? This same principle applies in pitching. A pitch is a story. You are painting a picture in the minds and imagination of the audience about who you and your business are, and what is your vision.
At the NJSII Pitch Day, there were a couple of businesses where at the end of their pitch some of the judges did not understand what the business and business model was all about. In these scenarios, they were not effectively communicating their current state, why they were before us pitching and where they were trying to go with the venture.
The "so what" is also critical. In this day and age, it is all a race or competition. We are bombarded with information, ideas and people seeking something. When you pitch, you want to bring the "so what" out in everything you speak about. Assume the other person does not care. They are not you, nor do they have any interest or attachment in your business. They don't care if you fought through wars and storms in your business in order to be there. It is about economic advancement, and in the case of social ventures, social advancement as well. If you think in the "so what", this will also help you to be very lean, precise and clear in your thought process, presentation and what you are trying to achieve.
4. Know Your Client = KYC. When pitching, your "client" is the target audience that you are trying to reach to get buy-in. Thus Know Your Client or in other words Know Your Audience. When going to pitch, take the time to study who the audience is going to be. Some questions to ask yourself are as follows: Who are the judges or who is awarding the capital? What is their background? What resonates with them and is important to them? What are the criteria and metrics for selection? What are the levers to pull in order to get them bought into me as a person and my business?
Part of "Know Your Audience" is also having an understanding of the culture, emotional intelligence, unwritten rules and even dress code. One of the businesses who pitched to us at NJSII did not wear a business suit. All of the judges and all of the other 12 business owners were wearing business attire. We were conscious enough to not hold his relatively more casual dress code against him, and evaluate his pitch and business according to criteria and metrics. However, would everyone you are pitching to be able to do that? It is not an automatic that a business suit is necessary. In Silicon Valley, California, many people do not wear suits and such formal dress may not resonate.
What is key is taking the time to think and reflect about your audience. Consider not only how to connect with your audience from a content perspective, think about your audience's culture and cultural norms, style, personality types and the environmental dynamics at play.
5. Clear, Crisp, Charm. When a company is pitching, whether it is to a panel of judges or room of investors, the presenters need to be strong public speakers. At the NJSII, some of the businesses presenting were not clear in their articulation, did not display confidence and strength, and were not concise. This could be identified through their body language including eye contact, tone and consistency of voice, and choice of words.
Practice and record or videotape yourself, and play it back. You be the judge or get others to give you feedback. If you are pitching and are given a certain amount of time, practice to ensure that you can deliver your presentation in the allotted time frame.
Being a good public speaker is the combination of art and skill. On the skill side, you can invest and get presentation coaching or observe others who are good public speakers. On the art side, this takes that delicate combination of skill, personality, confidence, charm and energy.
Practice makes perfect on the actual pitch delivery, and even in creating the "WOW" factor.