Know your product, your customers and your investor!
When investors listen to a “pitch,” establishing whether or not someone has a good business idea is the easy part. Most investors walk away because they’re not convinced they can trust you with their money. It’s really that simple. If I don’t tell you this, I will have done you a disservice. It’s nothing to be angry or bitter about.
This post must be read with the other two posts I’ve done on this subject. If you haven’t yet done so, I suggest you read them carefully, including my comments and those of your colleagues.
For those of you who missed last week, here’s a summary of Neil Patel’s first four pitching “tips”: 1) Take only ten minutes; 2) Turn your pitch into a story; 3) Be laser-focused; and 4) Explain EXACTLY what your product or service is.
Neil’s article continues with Tips #5 thru #8:
“5. Explain EXACTLY what is unique about your product or service.
If you are not producing or providing anything different from the run-of-the-mill widget, don’t even go to the meeting. Go back to your drawing board, and design something better.
6. Explain EXACTLY who your target audience is.
Use demographic and psychographic features to pinpoint your customers. Show investors a picture of a customer along with relevant data points.
7. Explain EXACTLY how you intend to acquire these customers.
Business success comes down to marketing. If you have a marketing idea, method, technique or process, this is your chance to showcase it. Contrary to pithy maxims, great products don’t sell themselves. You sell the product. To be persuaded, investors have to see an airtight strategy for getting the product to market.
Most VCs are well aware of the advantages of digital marketing and won’t take a second glance at a product that isn’t backed by a tactical plan for online marketing.
8. Explain your revenue model.
Investors invest because they want to make a return on that investment. An investor will care about your pitch if you can answer this question: ‘How will my company make you rich?’
The answer, in investor-speak, is your revenue model. Specifically identify which type of revenue model you are embracing, and how you intend to apply it. . .”
__By now you know that one of my favorite TV shows of all time is Shark Tank. I hope Neil’s excellent tips #1 thru #8 are preparing YOU to “swim with the sharks”! In my comments last week, I drew your attention over and over again to the need for you to understand investors. When you do your pitch, you must remember:
# Investors are not donors.
# Investors are not tourists.
# Investors are not philanthropists or charities.
# Investors have options.
If you have the opportunity to pitch to an investor, consider it a privilege rather than an entitlement:
# A good investor will never put money into a venture run by someone who comes across as arrogant, cocky or argumentative.
# A good investor will never put money behind someone who is dishonest, corrupt, or a thief. If you have a tendency for dishonesty or misuse of other people’s money, a good investor will find out before they give you a cent!
# A good investor will not put money behind someone who is careless or disorganized.
# A good investor will not invest in someone who is highly emotional. Being passionate is one thing, but being emotional is not acceptable!
# A good investor will not invest in someone who is political. You should understand the politics of your country from an economic perspective, but not come across as an active participant in politics.
Being a good investor is very hard!
__Your job is to show them that you can be trusted with someone else’s money.
Credit: STRIVE MASIYIWA (CEO ECONECT GROUP)