This post originally appeared on startupnation.com/grow-your-business
A business pitch is a presentation put together to entice an investor or group of investors. The goal of your pitch is to secure funding to proceed with your value proposition so you can take your idea to the market. Remember, the pitch process is about getting investors to back people; it’s not about backing products and markets.
When you create your pitch, I suggest two separate formats that may be intertwined at times:
- The base method, outlined in 10 points below, is an approach I developed in conjunction with Steve Zamierowski, an outstanding business plan coach at Tufts University. This template will assist you in crafting your proposal thoroughly.
- The STRONG method, developed by Oren Klaff, which takes into consideration the factors of human behavior.
I have reviewed many pitch decks in my day, and I have seen both the base and the STRONG method raise real money.
Read on to learn how to use both methods to design and deliver a successful business pitch that sells:
The base method
With the base method, you should have a 10-slide deck, which should include:
- Title slide
- Massive problem that requires addressing
- Value proposition solution
- Underlying magic
- Your business models
- Sales strategy
- Management team
- Basic financials
- Current status and offer
There may be a few extra slides used to enhance and individualize the presentation.
This base pitch method has been used quite successfully. For example, ZwitterCo has raised millions of dollars in financing in the sustainable water pollution space, and the same is true with Anodyne NanoTech in the drug delivery biotech space. The method has secured funding for a company in the blockchain space, and I have also seen it work for industries such as food, agriculture, nutrition, biotech, services, tech, engineering, entertainment and nonprofits. I have used this format to scale a small venture/private equity fund into a large one and used it to raise money for large ventures and projects, as well.
It is industry-agnostic in that respect. Specific slides can be modified to drive home key deliverables. It doesn’t matter what type of business you’re starting; the key is providing milestones, deliverables, value and the financing needed to get there and ensuring investors get a return on investment.
You want to be able to show a breakeven at 24 to 36 months or significant milestones achieved that go right to a multiple of X on value. Investors know that whatever numbers you come up with, you will likely be wrong. Being upfront is essential, such as in this example: “We are asking for X amount of money now, and we know the projections that we gave may be wrong and will likely be adjusted.” The same would be true for billion-dollar projects.
The STRONG method
The second item you need to learn is to present your pitch with the weapons and tactics as explained by Klaff. You have to understand what drives human beings’ behavior in sales and in a pitch situation.
Klaff explains how our brains have evolved: The old brain, or crocodile brain as he calls it, was developed millions of years ago to process fight-or-flight responses to keep us alive. The crocodile brain filters from a basic survival level: If the information is not needed, it is disregarded.
Klaff says the crocodile brain filters information in the following ways:
- If it is not dangerous, ignore it.
- If it is not new and exciting, ignore it.
- If it is new, summarize it as quickly as possible, and forget about the details.
- Do not send anything up to the neocortex for problem solving unless you have a situation that is really unexpected and out of the ordinary.
Pitches tend to originate from the neocortex of the brain — the problem solving area — but are received by the crocodile brain, which filters the importance of information. The crocodile brain looks for concrete evidence, not nuances. If you give too many details, the crocodile brain will discard or ignore your information. Your message must be simple to get through to the crocodile brain. You need an emotional story so that it’s memorable. Also, you have to command attention through social status. Finally, you can’t appear desperate or needy. Set the scenario so they come to you.
Klaff suggests pitching it STRONG:
- Set the frame
- Tell the story
- Reveal the intrigue
- Offer the prize
- Nail the hook point
- Get the deal
Once you understand how the brain works, it’s time to take frame control. A frame is an instrument you use to gain power, authority, strength and control in your business communication. If your frame wins, your ideas will be accepted, but if it fails, you are at the mercy of the other person.
Pitching is about being the alpha and the leader. If you’re the beta and follower, you lose. Understanding how to apply power frames is one of the most important skills you will learn in business.
The business pitch delivery
When you pitch, be dynamic. Create curiosity and desire. Make the buyers qualify themselves to do business with you. Protect your status when it comes to changing agendas, meeting times or who will attend. Understand being strong is important, and it is not about money. Your time is limited. You require respect, attention and status before anyone is going to invest in you and your ideas.
If you go to an investor or customer’s office, be prompt or early. Hold the expectation that your investor or customer be on time, as well. Your time needs to be respected, and it’s your responsibility to hold this boundary.
When you pitch, always finish early. If you go over, you lose. Never present for more than 20 minutes. I once reviewed a pitch from a very prestigious senior executive whose firm was considered to be iconic in the management consulting and venture industry. Everyone was afraid to tell him the truth about why he was not getting the funding. He went on for 45 slides and an hour and 10 minutes in length. I told him the truth: I lost interest, and most humans would, after the 20-minute point. He appreciated the candor and nailed his next financing trip.
When it comes to designing and delivering a business pitch that sells, remember:
- Don’t detail your audience to death. Convey a simple message.
- Be dynamic. Give them something new, and create curiosity with your pitch. If it isn’t new, exciting and summarized, it will be ignored.
- Get to the point and don’t put them to sleep. Every word and voice inflection point matters. Never present a pitch for more than 20 minutes.
The post How to Design and Deliver a Business Pitch That Secures Startup Funding appeared first on StartupNation.