Why most funding pitches fail before they even start
(Ok this is a picture of me doing a podcast...but you get the gist!)
You have less than 7 seconds to impress an investor
A study in the US looked into why some TED talks only get a few thousand views, whilst other talks on the same topics go viral. What was it that made some talks so appealing?
Groups were mixed each day with the first group watching the whole talk, the second group watching just the first 7 seconds, and the third group watching the first 7 seconds with no volume. Each group was asked to rate what they had seen. Incredibly, the scores from all 3 groups were roughly the same. In short, the first 7 seconds with no volume is a great indicator of how people felt about how good the talk will be.
Your first 7 seconds are vital
In the age of information overload the need to be clear and succinct has never been greater than it is today. Having expertise in communication and rapport building, and from training hundreds of people how to pitch and present with more confidence I see the mistakes that many people make. From running my own pitching events with investors on the panel I also get to hear the feedback from the people who matter if you want to get funded. So many entrepreneurs simply miss the mark when they are pitching for investment. Here are the biggest mistakes I saw:
1. Be clear and succinct
So many people are so close to their business that they feel that the rest of the world wants to hear about it. This is correct only to the point of relevance. Most investors want to know the problem that you solve, the business case, your traction and the figures. Once you have clearly explained these they may want more details, but they will ask you. So many people see questions as a licence to talk about things that are of little interest to investors at this stage.
The cold, hard fact: If you talk for too long about things that were not asked for, you are likely to talk yourself out of funding.
2. Be prepared for your pitch
The simple gauge for whether you are ready for your pitch or not is simple: if you had no visual aids/powerpoint and had to do your pitch, would you be comfortable? Many people use powerpoint as a crutch. It should only be a supplement. If you could not pitch your business without your powerpoint, you should not be pitching it. I have sat on investment panels watching budding entrepreneurs lose the crowd because the first thing they do is march to the front with their laptops only to find that the tech doesn’t work. Rather than using this time to pitch, they just stand at the front looking dazed and confused. This is often the death of the pitch before it has begun.
The cold, hard fact: People judge you within 7 seconds of seeing you. If your first 7 seconds is spent panicking because your tech doesn’t work, the odds are that you have already missed out on your chance to impress investors.
3. Start with a smile
From the study mentioned above on TED talks, smiling was found to be a critical element in engaging people. If you smile before you even walk to the front of the room you are giving yourself a massive edge on creating a favourable first impression. Smiling indicates friendliness and confidence. Many angel investors are watching you thinking “Is this someone that I want to spend more time with?” At the angel investment stage this is usually a far bigger factor than “Is this business hugely successful?” Remember that most angel investors are not just bringing money and experience to the table, they are also bringing their black book of business connections. They want to know that you will create a good first impression with them if they open the door for you.
The cold, hard fact: If you don’t smile at the start and during your presentation, you are more likely to disconnect and distance yourself from investors.
4. Get feedback and practice your pitch
The only way to feel like you want to smile at the beginning of your presentation is if you know that you have prepared properly, and this includes being subjected to the difficult questions which are likely to come your way, and knowing that you have good answers to all of them. Unfortunately, in my experience not many people tick this box. Indeed the worst offenders in my experience are the ones who believe that they do not need coaching or feedback because: “I’ve done this presentation many times.”
The cold, hard fact: if you have done your presentation many times and have still not got funding there is probably a good reason for that. You need help more than the person who is just starting out!
Article first published on LinkedIn - 24 July 2017 by Adam Shaw
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