Managing Your Cash Flow

The pitching dos and don'ts

4 min read

21 October 2011

Don't set up a meeting with an investor before reading these pitching dos and don'ts.

DO

… make a good first impression before you open your mouth

Wear suitable clothes. Clean your teeth! “We’ve lost deals on the back of bad breath,” says Bill Morrow of Angels Den

… create a good storyboard

You need to have a strong proposition that the investor can visualise and believe in.

… present with accuracy and confidence

Understand your numbers, your audience and your markets in order to gain credibility. 

… be specific about your goals

For example, tell the investor you need x amount in order to develop or promote your product, win contracts, scale up, acquire another business or pay off debt.

… create a sense of exclusivity or scarcity

“You have to create that sense that if they don’t give you a better deal, a better price, or better terms, they’re not going to get the deal,” advises Julie Meyer of Ariadne Capital.

… focus on both emotional and analytical persuasion

“Securing investment is all about seduction up front,” adds Meyer. “You have to seduce the investor with the attractiveness of your proposal, and then switch gears by revealing how you intend to execute and how you would manage the things that could go wrong.”

… put a value on the investor’s knowledge, experience and contacts

They can probably offer you a great deal more than money, so ask them how they can help.

… consider walking away

If you have offers on the table that don’t come close to your own valuation, you should be prepared to walk away, but only if you are sure that the investor won’t add so much value that you need to revisit your original thinking. Always consider the bigger picture.

DON’T…

… do a sales pitch

“You’re not trying to close them and you’re not trying to tell them about the product,” advises Bill Morrow who has amassed data from speed pitches about what does and doesn’t work. “Nobody wants to be sold to because it’s an investment pitch not a sales pitch,” adds Bill. “The product isn’t necessarily that important. It’s more about the revenue model that accrues from that product and the individual and team behind it.” 

… waffle

Keep to the point and avoid jargon.

… be rude or arrogant 

You may know your business well and passion and enthusiasm are welcome in a pitching environment. However, you should also listen to and learn from experienced investors. If they say something you particularly disagree with, challenge them politely and make your case clearly and concisely. Don’t argue.

… be afraid to create competition 

In general, you should see a number of potential investors. If they are interested, let them know that they aren’t the only show in town.

Guy Rigby is a director at Smith & Williamson. This is an extract from his latest book From Vision to Exit (Harriman House, 2011), available in paperback and eBook.