Pitch perfect

Suzanne Winterflood
Pitch perfect

You’ve got an awesome business plan, the next step is getting some backing. A serial entrepreneur and a crowdfunding expert reveal their secrets on how to pitch your business to investors.

 

The serial entrepreneurGreg Cross

Greg Cross co-founded PowerbyProxi, a wireless power company, in 2007. He has led the company through four highly successful funding rounds totalling $25 million, and recently added deals with international heavyweights Samsung and Texas Instruments.

Cross is also Chairman of NZX-listed SLI Systems, the Sir John Logan Campbell Executive in Residence at the University of Auckland’s Business School, and a former CEO of Microsoft NZ.

Here are his pitching tips.

 

Have a multi-year strategy

Raising capital is a strategic process, not a one-off transaction. Have a multi-year strategy and build relationships with prospective investors well in advance.

 

Demonstrate your abilities

Clearly demonstrate how you’ll use the capital you raise to reach your next major milestone. You’ll need to convince investors that you have a team with the skills, experience and capability to get there.

Take a really hard, honest look at this one. If it’s not right, fix it fast!

SEE ALSO: 6 lessons all entrepreneurs should know

 

Know your markets and competitors intimately

Be clear about how you compete and what your proof points are. Don’t say you have no competitors and are completely unique – no one is.

 

Don’t be too greedy

Understand the norms for valuations at Series A, B etc. Don’t be too greedy too soon. You’ll be in a partnership with your investors and you need to share the risk fairly.

Unless you can execute perfectly, high valuations have a habit of biting you in the bum.

 

Consider the equity

If you have a good quality, investment-ready company, your Series A investor is likely to be looking for around 30% equity.

Too many founders get hung up on the C word, "CONTROL". Ultimately it comes down to how much capital you need to compete and win.

10% of a company sold for $100 million is worth more to the founder than 100% of a company that’s valued at $5 million.

 

Listen, learn and adapt

Talk to other entrepreneurs about how they’ve raised capital and find out who they trusted for advice.

Thoroughly reference-check any consultant before you retain them.

 

The crowdfunding expertP BRICK 08

Josh Daniell is Head – Platform and Investor Growth at Snowball Effect, New Zealand’s first equity crowdfunding platform.

A passionate supporter of local SMEs, he began his career in corporate law before running his own business consultancy.

Daniell joined the Snowball Effect team as employee Number One in 2013, and has since been involved with more than 450 companies interested in raising funds through equity crowdfunding.

Here are his pitching tips.

 

Remember, it's all about you

You’re selling yourself. Everything you do and say needs to build credibility and reinforce your ability to execute your vision.

As the master pitcher David Rose would advise, use the time to demonstrate integrity, passion, experience, and domain knowledge.

SEE ALSO: 6 lessons all entrepreneurs should know

 

Build momentum

Grab attention, and then take your audience on a logically progressing journey through the opportunity. Each step should build momentum towards a powerful ending.

 

Understand investment

You're asking someone to invest in your business, so you need to understand the dynamics from their perspective.

Show that you're attuned to investor expectations, and demonstrate the alignment between business objectives and investor returns over the relevant timeframe.

 

Don’t bluff

If an investor smells that you're covering something up, the whole pitch will derail.

If you're probed on detail that you don't know, be upfront and say that you'll find the answer. 

 

Don’t burn your bridges

When an investor isn’t interested, thank them for their time regardless. When people like you, every conversation will build awareness and momentum for your business.

In a small market like New Zealand, your integrity and reputation are very visible. 

 

Turn a “no” into a positive

Hard selling at the end of a pitch can push people away.

Even if an investor turns you down, have a couple of "asks" ready, such as: “Please put me in touch with three other people who may be interested.” They’ll feel good about helping you, and you'll gain further leads.

It also emphasises that you'll be talking to other investors, so if they’re sitting on the fence they could miss out.

SEE ALSO: 6 lessons all entrepreneurs should know

 

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