Pitching for money: Fatal flaw #1

I have seen hundreds of pitches. Some great and some so far off the mark that you wonder what the entrepreneur was thinking.

I have seen hundreds of pitches. Some great and some so far off the mark that you are left wondering what the entrepreneur was thinking as he prepared for the meeting.

One thing is for sure: Good pitches get results. You know that you’ve done well when you are invited to that next meeting. Go out and celebrate. That is a great outcome and you have passed a major milestone.

Your pitch doesn’t need to be perfect but you’ll need to hit the mark 80% of the time and I bet that you get to that very important next meeting.

There is a proviso…

You can do a 90% good pitch but if that one 10% error is a “fatal flaw” then you are finished. You will not be forgiven for fatal flaws. So an understanding of the fatal flaws is vital to your success.

What are these fatal flaws?

Fatal flaw #1

Not understanding the investor.

There is no excuse for not understanding your audience. If you are looking at venture capital companies and angels, here are some tips to find out more information and the questions that you need to ask:

• Go to their website.
• Do they have money to invest right now?
• What type of companies do they invest in?
• What industry sectors do they invest in?
• What investments have they made recently?
• Understand their investment strategy
• Can you offer them an angle where they can get good leverage with other investments?
• Talk to the management teams of other investee companies to see what these investors are like to work with post investment.
• Go to lunches/conferences to meet those that you may approach in a more casual environment. Then the VC/angel can put a face to the name when you contact them.
• Talk to the venture capital associations/angel groups to get more information.

This information is not as hard to get as you might think. It is in investors’ interest to make sure that you understand them right from the start. It saves everyone time.

It also demonstrates that your company does its homework. This will build your credibility.

Investors do study the behaviour of their prospective investee companies. They want to know how you approach business problems and how thorough you are before taking action.

Spend time researching investors before you approach anyone for a meeting. It will definitely pay off during your negotiations.

In my next blog I’ll talk about fatal flaw #2.

Please give me your feedback. I’d love to hear about your experiences when presenting to investors.

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