When it comes to seeking finance, it’s always a good idea to have the finance director at hand. But even with a knowledge of past figures and future estimates to back your business up, there’s one true key to investment success.
Presentation and tone of voice have all been cited as ways to sway investors, but what matters, according to Smarter CEO Christian Lane, is the ability to read your audience.
Hailed as one of Dragons’ Den’s youngest participants, Lane successfully gained £80,000 from Theo Paphitis – the owner of stationary firm Ryman. His product? A stationary folder that halved paperwork by curving paper instead of creasing it. Notice the link?
After selling Foldio, Lane set up Smarter in 2013. But following his business with Paphitis, Lane designed a number of inventions and quickly realised the key to investment success was to match your pitch to your audience rather than a panicked offering of everything you ever designed.
As such, we thought Lane was well-placed to offer advice to budding entrepreneurs and financial directors alike on the do’s and don’ts of investor pitching. Here’s what we unveiled:
(1) When did you go through your first pitching experience?
My first experience of pitching was unique. When I was 19, I appeared on Dragons’ Den looking for funding for my product – Foldio. Folido was a stationary folder. It halved the size of paperwork by curving rather than creasing it. In retrospect, I was quite naïve going on to the show. My main priority was to secure funding, rather than building contacts, whereas I now realise it is important to cover off both areas. I was quietly confident that I had a sound business plan and product. I secured £80,000 from experienced entrepreneur Theo Paphitis in return for 35 per cent of the company – so I would say it went well!
(2) If you could go back in time, what advice would you give yourself regarding your first pitch?
Remember to enjoy it: you only get one opportunity, and you know more about your product than anybody else! You should also be prepared in terms of how much equity you are able/want to release and strike the right balance. Don’t give too much away. And definitely do detailed research on who you will be pitching too – it’s key to investment success. This is vitally important as it will help you get the right tone and right level of information.
(3) Having gone on to pitch numerous inventions, is there a part that can only done well with experience?
For me, learning to read an audience was something that I picked up over time. From experience you learn to recognise what certain expressions mean, and from there you can decide what your next point will be. Being able to pull out an impressive financial statistic when you think you are losing them is really important.[rb_inline_related]
(4) From your experience, what should you stay clear from at all costs?
I’m not overly keen on crowdfunding as a source of investment, although I wouldn’t go as far as saying I would stay clear from it at all costs. I feel that crowdfunding, whilst definitely having a place in the investment world, needs a very high level of work and research. You really need to properly understand how it works before deciding it is a good route to investment for your business.
In addition, the variety of investors means it is difficult to build up supportive relationships. This is something that is important to me and to the Smarter business. It may often be difficult for tech companies to get funding in this way because technology products can traditionally be viewed as high-risk.
(5) What is that one gem of advice you think will go a long way in helping with pitching?
Master the ability to communicate the vision for your brand moving forwards as well as right now in one sentence. You can so easily trip up by going into too much detail around your company vision. For Smarter, for example, my one line would be “As well as revolutionising the simple act of having a hot drink, Smarter plans to revolutionise the way that we shop, cook and eat.” This is simple and to the point.
(6) You’ve emphasised that the audience doesn’t always stay the same – and that research is key to investment success. Are there elements of the pitch you recommend stay the same?
Ultimately, the message you are trying to get across should stay the same, regardless of the audience. The brand is the essence of the business and this doesn’t change. The brand vision and voice must always be consistent. The one aspect of your pitch that may vary depending on your audience will be your tone.
If you’re in an informal setting, say, a coffee shop, your approach may well be more relaxed than in front of a panel of board members. But it all comes back to reading your audience and adjusting as you see fit.
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