Tips For a Pitch to an Investor

Mainly Maxine’s Tips For A Pitch To An Investor

We will be producing a number of articles that will be posted on our website that will be on this and similar topics in much more detail. However, as I began putting it all together for the people pitching at the January 17, 2017 meeting, I realized it would take me until sometime in 2018 to finish. So I decided to go with a less than all inclusive primer.

At our last board meeting, our Vice President Shelby Smith noted that many of our members may not be familiar with a number of terms regarding corporate and product discussions. For example, a Sell Sheet is a one page advertisement that you hand out at trade shows and the like. If you are looking for an investor or corporate licensing I would alter the basic one to emphasize issues of particular interest to them.

It should contain a photo or photos of the product possibly showing people using it. A “Hook” or short value statement specific to the product, ” The only wrinkle cream made for Men”. A general Sell Sheet might have some endorsements or other value added statements like “that youthful look gained, without the clothing stain.” An investors sheet might have a statement like, “We already have the purchase orders in place to ensure a 5 times return over the next 3 years.” A corporate licensing sheet might say “over an 80% success rate with our primary demographic while selling at over 20 trade shows this year”.

Here is a link to a Google Search for sell sheets

VIDEOS:

Videos in every case should be as short as possible and focused to the viewer. If it is a general sales video take your tips from the New DRTV ( Direct Response TV) market. Theirs are about 10 to 15 seconds, definitely No More than 30 seconds and usually show the problem or need and how the product solves it along with the special pricing offer and action statement with the phone number.

For Example; (While showing an attractive older man being ignored by a group of pretty young women the announcer says) Does your wrinkly face make you look older than you feel? Do you want to regain your youthful look without resorting to products made for women? Try Adonis! (the man returns to the scene with a clear young face and the women are suddenly attracted to him, paying all sorts of attention to him and the announcer goes on) “The only wrinkle cream made exclusively for Men”.

If you are making the video for a corporate or investor presentation you can then add in some facts pertinent to that audience instead of the buyers information. These can run a little longer but remember everybody is always racing against time. Once the pace slows down on your video, they will turn it off and that IS a turn off. Instead, leave them wanting more so you get a chance to talk to them.

The more professional you look the better for most situations except when pitching a DRTV company. Realize, they are the pros and you are the raw material looking to work with them. So a decent homemade video with a really great hook gives the pros a chance to Fix It. I would have no problem giving them credit for our success as long as they give me a nice check every quarter.

The only exception to the rule of keeping it short is if you plan to stream it live behind your booth at a trade show. Here you may want to look up some of the old Long Form Infomercials. Check out this link http://bit.ly/2h2QBV6 This form can last up to several hours but might be best held to 30 to 60 minutes. Your regular short spots can get really old after a few hours at a trade show.

If you want to have some fun the next time you go to a tradeshow look for a booth with an incessantly loud annoyingly hook line repeated by a funny voice whose attendant has that really faraway look on their face and imitate the hook a few times. WARNING: the attendant may turn into a zombie whose sole purpose in life to pummel you to death. This attendant may be joined by equally disturbed attendant from the adjoining booths.

QUESTIONS:

Below is a set of questions Maxine gave me as an outline of topics to cover during a pitch. You don’t have to answer every question in detail, you can combine answers such as, We have a full Utility patent, a working prototype and a contract with a manufacturer who can bring the product in for $8.63 a unit.

You can skip questions that may not apply to you at this time such as, Have you completed a successful Pilot initiative using your product? Obviously, if you have, you will shout it from the highest mountain, which in Florida may be hard to find. Most probably, you have not but you may have some verifiable positive comments or may be planning to do one in the near future.

I have made some comments in italics that I felt were relevant. Now without further ado Hereeeee’s Maxine.

MAXINE’S QUESTIONS:

What does your company do?
What is YOUR cost to manufacture your Product
What are your respective wholesale and retail selling prices
What is unique about your Product?
What can your Product do for me?
How big is the market opportunity? (How many people/companies would buy your Product)

Here I would like to interject a comment made by our professor, Kevin Cox, at a recent FAU Boot Camp, “Never say the market is approximately X million and if we can get just 1percent that would equal…” because you don’t know if you are going to even get .0001percent. That’s why products fail. When he said that I remembered dozens of presentations where the presenter said something like that which produced a collective grown and general disinterest in the entire audience. – Comment by Leo

Why does your company have high growth potential?
Why do users care about your product or service?
What are the major product accomplishments?
What are the key advantages and features of your product or service?
What have you learned from early success and failures in your product design/vision?
Can you provide a demonstration of your product or service?
Do you have an operational prototype?
Have you completed a successful Pilot initiative using your Product?
Who are your company’s competitors?
What advantages does your competition have over you?
Compared to your competition, how do you compete with respect to price, features, and performance
How do You plan to market your products or services?
How long is the typical sales cycle between initial customer contact and closing the sale?
What key intellectual property does the company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
How do you know that Your Company’s intellectual property does not violate the rights of a third party?
How was the company’s intellectual property developed?
Would any prior employers or a team member have a potential claim to the company’s intellectual property?
Will there be any claims by a party claiming to be a co-founder? (Note that this issue arose with Facebook and other companies.)
What is the planned use of proceeds you raise NOW?
What exact milestones will come from this round of financing?

If You Are Seeking Funding

If you are seeking funding for your business venture, use this section to outline your requirements. Your funding request should include the following information:

Your current funding requirement in dollars
How you intend to use the funds you receive: Working capital?
Debt retirement? Acquisitions? (EXAMPLE: Renting larger laboratory space: $2000 a Month)

COMMENTS BY LEO:

Remember, the most important element of any presentation is YOU! You are the person they have to trust and believe in. Are you credible? This means, have you been successful in the past, have you done all the homework to have a reasonable chance of success, are you an industry expert, etc.? In essence, why should the investor believe You will give them the return they are expecting on their investment.

Lastly, Don’t Rush! Yes, you only have 5 minutes and there is a lot to cover. Focus on the most important points, where you and your product shine, time test your presentation and trim the less valuable elements. If you rattle off too much information like a machine gun everybody is going to duck for cover rather than listen to what you have to say.

Well, you’ve got your work cut out for you. Let’s hope somebody goes home with a check.

Leo