Pitching in a Tough Market

Investments by venture capitalists have dropped by half in the first quarter of 2009. On the other hand, the number of people starting or growing a business may be increasing. As such, entrepreneurs have to fight for a limited amount of funding and loans. The last thing you want to do is pitch in a way that loses the investors' or lenders' attention.

I read a story about an entrepreneur who showed up for a meeting with a venture capitalist wearing a costume that matched one of the words in the company's name. The VC wasn't impressed or interested. While some gimmicks can help, it may not be worth the risk when it comes to funding.

Getting to Know You Stage

When a couple goes on a first date, they don't immediately reveal every little thing about themselves. Well, OK, maybe some do—exceptions always exist. Investors say too many pitches focus little on the people and go right into the business pitch. In truth, people make up a big part of the equation in a business. A great business idea does not equal instant investment.

I've used Betamax and VHS as an example a few times. This story of video technology companies shows how technology doesn't guarantee success. No one (except VHS) argues that Betamax was inferior to VHS.

Yes, you still want to have your business plan, marketing strategies, current and project financials, list of current customers, successes and how the company solved problems and management team background and bios. This information should always be up to date and ready for any meeting. Plus, know the answer to all the important working capital request questions.

Now you're armed with information. When you begin your meeting with an investor or lender, start off by introducing yourself. Tell a story. Why did you get into the business? How did you come up with the idea? What mistakes did you make and how did you learn from them? In sharing this information, you're allowing the investor or lender get to know you and see if you're someone they can believe in. A business doesn't run itself, right?

Answer all Questions

Take your time working through your presentation. You want to give your audience time to digest the information and ask questions. Sure, it'd be easier on you for them to save the questions for the end. But you're not the focus. You need to let them be in charge of their questions. You don't want to overwhelm them either. You should be able to provide an executive summary type presentation—lots of details in as few words as possible.

If you don't know the answer to a question or it makes you uncomfortable, don't dodge it. Instead, explain you need to meet with your people or research before you can respond. The nice thing about this? It gives you an excuse to follow up after the meeting (don't take too long, though).

Also be ready to play the numbers game. Finance people know how to get to the heart of the numbers and ignore what sounds meaningless. Too often, presenters look at a broad market rather than show they've done their research and know who exactly their market is.

After the presentation—no matter the answer—stay in touch. Finance people know others who might be interested in your business. My company has gotten referrals from banks and we've referred people elsewhere. For example, we focus on helping people grow their business while others often work with startups. We know every customer has unique needs and some organizations meet those needs better than others.