How to Pitch to Investors

© By Burke Franklin

Are You Raising Capital?

Do Not Sell Your Product To Investors!

They don’t want to buy your product, they want to invest in your business! There’s a big difference.

OK, you have a great idea…Even if your product is guaranteed to save the world, few people will invest in your company if you cannotshow that itwill become profitable sometime soon.

Nevertheless, too many people spend too much investor face-time selling their product. Investors want to see how your business ideaoperates as a money-making vehicle.

For example, you are not only selling Coca Cola, you are selling the Coke machine!

Hereis an example of averycommonconversation

I recently spoke with a customer who has a nutrition education / food line especiallybeneficialfor obesechildren.

He went on about how great his product is and what the benefits will be, and etc., but I stopped him to ask how this will becomeaprofitablebusiness?

What’s the best (economical) way to reach these customers? Who might be good marketsegments to reach children?

Let’s presume that the kids aren’t going to buy it and reaching the parents is probably difficult.

Even better would be a qualified 3rd party in direct contact with the ‘customer’ who would recommend his product. (We humans usually trust a 3rd party recommendation long before we will believe and act upon a direct sales pitch.)

Perhaps Pediatricians, Child psychologists, and maybe even 78th grade science / PE teachers would be good people to consider first.

Contact several pediatricians that you know. Runyour concept by them.

A Little Phone Etiquette…

Ask if they,“have a moment.” (If they’re busy and you press on, they’ll be annoyed with you.) Better to ask when you can call back. (And call back then!) (Why are you calling?)

“I’m calling to ask for your guidance on a new nutritional product to help obese children. It consists of a,b, and c, and I think you are in a strong position to recommend it in certain instances. Do you have a moment?”

Answer their questions (log the questions).

Keep your answers short – when the response is positive, note the response so you can refine it and use it over and over again.

If the responseis negative, try something else – keep notes. This way you can develop a tightscript.

Listen and write down verbatim everything they say – use their words,not your interpretation.

(If they say, “Lime-colored,” you write, “Lime colored,” not “green.”)

Pay attention and they will give you the keys to their kingdom.

Some Questions to Ask

• How many children do you see in your practice that would benefit from your product(s)?

• What percentage would actually buy it?

• Who else doyou see doing something similar?

• How would theypitch this to other pediatricians?

• Can you accept a commission on sales? (Maybe not for this case, but perhaps yours…)

• How many pediatricians are there? (You’ll visit the associations and publications for their ‘editorial calendar’ and membership stats. More data/proof for your business model.)

• What associations do you belong to? Is it good? Do you actually respond to their recommendations? (Keep track of thepercentages.

• Which publications do you actually read? (Not just subscribe to – We all have magazines and papers laying around that we may read eventually – which ones are their priority?)

What pattern(s) do you see evolving?

Using their words, you can refine your presentation (Especially,how they might pitchit to their peers.)

From the publications, associations, and websites, how much does it cost to run an ad, get mentioned in their newsletters how often?

Contact theother market segments in thesamefashion. Now you can quantify the cost of reaching your audience. Theideaistoreducethehip-shootingtotheabsoluteminimum and provide investors with many basic assumptions they can believe.

Investors, when doing their due diligence to verify your claims,willcontact their own experts.

When you provide the proven pitch, the investors will likelyget thesamepositiveresponse.

Is This Too Much Work?

How much money are you looking for?!?

Do you really think anyone will give you money if you don’t haveyour act together?

Investors have many options You’re just one of many.

It takes more than a pitch deck and a smile. And you’re not going to BS your way through your business plan like you would a school paper. Your audience is investors looking for something more interesting todo withtheir money than they can thinkof. Would you really build a business without doing this bit of basic research?

In fact, this research may tell you that your idea, this time, isn’tready for prime-time.

If it is, you may get some great feedback on how to make it selland on how to sell it.

And, you’re just getting started on your plan. But now you have abetterpicture ofthe promise ofyourbusiness. Can you see how choosing the top priority potential customers or distribution points and quantifying their responses can paint acredible picturefor an investor?

I hope you found this bit of Business Black Belt wisdom useful!

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Thank you for your business, and please feel free to contactme if you have any questions or comments!