Dan Mezheritsky - Founder, Fitness on the Go
When you’re pitching your business, the most important tip I can share is to know your numbers and forecasts. Being sharp is very important, and it’s one thing that can make the difference between looking like you know what you’re doing, and looking unprepared.
What are your revenue figures? What do profits look like? How many clients do you have, or how many units have you sold? What’s the forecast for your numbers over the next year or more?
Come in with all the details, and you won’t look unprepared when someone asks you to share your revenue model.
I’ve pitched my fair share of investors, including during two appearances on Dragons’ Den (the most recent episode airs January 6 at 8 p.m. on CBC), and as an entrepreneur or business owner you should know your place in the room.
You’re coming to them – the investors – so don’t be cocky even if you think you have the “next big thing.” Understand that these people are taking time out of their day to consider your idea.
If they don’t like you, they won’t want to listen to you for too long, nor will they want to work with you. Be humble but confident, and open to suggestions.
Adam Lerner - CEO, Two By Fore
The easy mistake to make when pitching a proposal to potential investors, partners and clients is to sell benefits rather than vision. In fact, I myself fell into this trap at a recent angel pitch session. The organizers provided “how to pitch” guidelines before the event, all focused on rational attributes such as raise amount and capital allocation. I followed their advice, spending 80 of my allotted 90 seconds telling potential investors about Two by Fore’s market size, target market and product. The result: I completely missed the boat. It was clear to me afterwards that I was selling the wrong attributes. The whole message of why Two by Fore was a sea change in a massive and slow-to-innovate real estate industry was drowned out by the noise of minor differences between benefits lists of all the competing startups. The uniqueness of our vision and conviction of our team’s approach was lost.
I know what the wrong approach feels like because I can contrast it to the feeling and results of the right approach. In the first few months of creating Two by Fore, I spent nearly all of my time meeting with potential clients. Many of these potentials became actual clients when the company launched. And one of those meetings resulted in a gem of a partnership, particularly for an early-stage startup, with Canada’s largest real estate franchise. I think I know the reason for the partnership. It is because the executive vice-president believed in our vision and our team before he ever needed to value features and price tiers.
So, when pitching, spend those precious 80 seconds on vision, and save the features and benefits for the last 10 seconds.
Neil Patel - CEO, Kabuni
It all comes down to data and passion. First of all, passion has to come through in your pitch, because it’s what helps drive an idea to become a business. That’s not to say that heart alone is enough – you want to show that your team lets data drive its decisions. While sales data is compelling, and having revenue helps, showing growth and market validation is just as important with investors.
They want to see that you’ve talked to your customers and are taking their guidance, boiling it down to find out the why behind the how. That’s vision. Important types of data include “lead to cash,” or how long it takes to generate money from a user, if you’re on a “freemium” business model. The margin of each transaction is important as well, if you don’t have existing revenue – investors love high-margin businesses, even if they do take time to turn around.
Pitching to a potential partner is a slightly different ball game than pitching to investors. Always look for partnerships for both growth and investment, as partners are going to have your long-term interests at heart. There are many partnerships out there between companies that have similar customers who will love both products. For example, Kabuni knows that our customers spend when they buy a house. We’re looking at several partnerships in real estate for future growth or potential investment rounds – this is a huge opportunity down the line for revenue. Showing your understanding of those future opportunities shows vision and that you’ve done your research.
