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A S P E C I A L E D I T I O N F R O M T H I N K I N G B I G G E R B U S I N E S S M E D I A I N C .

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ESTABLISHED
ESTABLISHED
& GROWING
& GROWING

FINANCE
FINANCE
( by Michele Weigand )
( by Michele Weigand )

A Beginners Guide to
APitching
BeginnersYour
Guide Business
to

ESTABLISHED
& GROWING

FINANCE

( by Michele Weigand )

MARKET How many potential customers


are out there? Thats your total market. In
addition to the total market, investors want to
know: What is the No. 1 customer type within
the market to target for sales? Why?
Help the investor understand how customHeres how toersdeliver
a pitchinthat
success-way.
To win investors backing, you need to catch their attention.
will be attracted
a cost-effective
fully highlights The
all three.
days of launching a website or an app and
hoping people nd it are over. Show who and
he rst thing you must understand about
explain the science behind their product or
where
the customer
and how to reach that
The Essential
Parts
of a isPitch
customer at the lowest cost per unit possible.
yourbacking,
companyyou
to investors:
service.
Not true. Sure,Heres
investors
will de
nitehow to deliver
a pitch
that successTo win pitching
investors
need toAcatch their
attention.
The
initial
pitch
should
focus
Also, the sales strategyon
cannot be social
fully
highlights
all three.
pitch is the equivalent of asking for a date, not
ly want to understand
the
technology
before
media. Social media is akin to turning the
the
following:
hand
in marriage.
he asking
rst thingfor
yousomeones
must understand
about
explain the science behind
their
product
or
they invest.
lights on in the ofcenot worth mentioning.
The Essential Parts of a Pitch
pitching
yourmany
company
to investors: A believe
service.
true. Sure, investors will deniteToo
entrepreneurs
that,Not
after
business has
to have
clear and de
PROBLEM WhatThe
problem
does
the aproduct
or ned
The initial
pitch should
focus
on
Before
that
can
happen,
investors
must
see
pitch is the equivalent of asking for a date, not
want to
understand the technology before
pitch hand
is done,
investors will lywhip
out
strategy
to nd and
convert customers.
the following:
asking their
for someones
in marriage.
service
solve
and
for
whom?
Sometimes
it
is
three things:
they invest.
checkbooks.
Butthat,
thats
Too their
many entrepreneurs
believe
afternot realistic.
does the
or serPROBLEM What problem does the product
or
Before that can happen, investors must see
helpful
to showCOMPETITION
an existingHow
product
orproduct
service,
their pitch
is
done,
investors
will
whip
out
vice compare to competitors? Remember that
A product or service
that
Instead, the goal should be getting
your
auservice
solvesolves
and for whom? Sometimes it is
three
things:
and then displaysometimes
your new
andquo
improved
their checkbooks. But thats not realistic.
the status
is your competitor.
helpful to show an existing product or service,
yourau-business,
problem
Aproduct,
product or service thatasolves
Instead,dience
the goalexcited
should beabout
getting your
offering
next
to
it.
and
then
display
your
new
and
improved
MANAGEMENT
TEAM
AND
ADVISORY BOARD
and business,
team. You
want investors
to
dience customers
excited about your
product,
a problem
nextservice
to it.
A big market for offering
that new
Make sure to focus on the management teams
customers
andaway
team. thinking,
You want investors
walk
Thattois a business
I
CUSTOMER Who
is your customer?
WhoIf your
has direc A big market for that new service
accomplishments,
not just titles.
walk away thinking, That is a business I
CUSTOMER Who is your customer? Who has
or product
lovemore
to know
of business
development
the sales
the biggest paintorand
is willing
to pay grew
to solve
would would
love to know
about. more about. or product
the biggest pain and is willing to pay to solve
at her last company from $4 million to
Whats
thetobest
to pique their
Whats the
best way
piqueway
their inter A team
run
Ainterteam that can successfully
run that can successfully
the pain? The pain
can be ease of use, speed,
the pain? The pain
can be ease of use, speed,
$16 million in two years, highlight that fact!
est? A lot
of Arst-timers
its enough
to its enough
the business
est?
lot of think
rst-timers
think
to
functionality, price or availability.
the business
functionality, price or availability.

Pitching
Your
Business
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56

THE THINKING BIGGER GUIDE FOR KC ENTREPRENEURS // 2014-2015

ESTABLISHED
& GROWING

FINANCE
( by Michele Weigand )

MARKET How many potential customers


are out there? Thats your total market. In
addition to the total market, investors want to
know: What is the No. 1 customer type within
the market to target for sales? Why?
Help the investor understand how customers will be attracted in a cost-effective way.
The days of launching a website or an app and
hoping people nd it are over. Show who and
where the customer is and how to reach that
customer at the lowest cost per unit possible.
Also, the sales strategy cannot be social
media. Social media is akin to turning the
lights on in the ofcenot worth mentioning.
The business has to have a clear and dened
strategy to nd and convert customers.
COMPETITION How does the product or service compare to competitors? Remember that
sometimes the status quo is your competitor.
MANAGEMENT TEAM AND ADVISORY BOARD

Make sure to focus on the management teams


accomplishments, not just titles. If your director of business development grew the sales
at her last company from $4 million to
$16 million in two years, highlight that fact!
An advisory board has no duciary obligations to the company and is basically a group
of people who will serve as mentors. When a
business is just starting out, though, the boards
members can lend credibility, especially if
theyre leaders in their industries or communities.
MILESTONES Where is the business in its
development cycle? Is the product in beta or
alpha, or has it launched? How many customers? How much revenue is earned currently
per month? When will these things change?

This section helps investors understand


how real the business is, how long the
investment will last and how their money
would be put to use.
FINANCIALS The most important elements of
the nancials are volume and revenue. Investors need to understand how many customers
are needed to drive what level of revenue.
Dont go overboard explaining your expenses;
they should take only two to three lines of data.
ASK AND EXIT The ask is the total amount of
the capital you need to raise. (You should also
explain how you plan to put that money to
work.) The exit is the estimate of when the investors will be able to sell their stake in your
venture, i.e. when the company is purchased
by another party.

Other Key Factors


Not only does your pitch need to serve up
the right information, you need to observe
other ground rules.
A typical pitch should run to eight to
15 minutes.

In a lot of cases, youll be in the same


room as your audience, but there will
be many times the pitch is presented
over the phone or over the Internet. So
dont rely on props or brochures that an
audience needs to see in person in order to
appreciate. I recommend no handouts, and
instead of props, include pictures on your
slide deck.
Investors expect the business to have the
potential to grow at least 30 times its
current size to provide a return
that is attractive given the risk inherent
in startups.
Remember, the pitch is just the rst step
in a much longer dating process. Youll have
more time to share the details of your business, technology and nancials if you can
convince them to give you another date.
If you dont get past the rst date, you will
never have a chance to show them everything
you have accomplished and plan to accomplish. If you dont get past the rst date, the
investor may have passed on a great opportunity for nancial return.

In many cases, youll be presenting the


pitch as a slideshow, usually projected on
a screen. On average, you should budget
a minute per slide. Do not use too many
slides, or there will not be time to talk
about the important nancial slides at the
end. And do not include an appendix with
detailed nancials or other data.
Investors dont read paragraphs.
Keep it short.
You need to capture your investors attention in the rst two to three minutes.

Michele Weigand is the managing director of Focused Perspective, which offers a range of business and strategy development
servicesincluding pitch coaching.
(785) 691-6643 // mweigand@focusedperspective.com //
www.focusedperspective.com

Reprinted with permission from Thinking Bigger Business. 2014, all rights reserved. Reprinted by ReprintPros 949-702-5390 .