My pitching techniques

Right from the start I’ve pitched for investment, and pitched well.  I started Posse in 2009 as a part-time side project; since then I’ve raised over $3 million from investors and $1.4 million in government grants.  I’ve never had a product fly out the gate with traction but I have a pretty awesome pitch.  I raised the first $1.5 m of investment in Posse without a product or team, purely on the strength of my presentation and PowerPoint deck!

I had no prior experience at this game.  My first group pitch (at Innovation Bay in Sydney, 2009) was my first public speech since high school.  And I didn’t wake up one day to discover that I’d been blessed with the ability to pitch to investors.  What I did was: prepare, prepare, practise, practise.  I watched countless hours of YouTube videos showing other people pitching their ideas.  Then I wrote down what I thought worked and what didn’t, and used this to build my own pitch.

I’ve heard it said that investors don’t care about the quality of a pitch: it’s all about the product, the team and the plan.  Tech people in particular seem to gloat about their inability to pitch, and their refusal to learn how to do this.  I get the sense they think that ‘sales’ is beneath them; it’s for people without great products.

This is wrong.  Sales and pitching require leadership.  My favourite definition of leadership is, ‘A leader is someone with the energy to make a dream a reality in the minds of other people’.  To do this, you must have a dream and be able to sell it, which means knowing how to pitch!  When I start investing in other entrepreneurs, there’s no way I’d invest in someone without a good pitch.  If you can’t sell me your vision, how will you inspire others to join you, or customers to use your product?  And if you haven’t troubled to learn how to pitch, I’d wonder if you’re either arrogant or lazy.  You might not learn to overcome future challenges.

I guess that anyone reading this blog is interested in hearing how I built and delivered a powerful pitch, and how you could improve your one.

Let’s get started.

1.  Learn how to speak in public.  I raised most of my first big funding round by speaking at three separate Sydney pitch events – Innovation Bay, Tech 23 and Sydney Angels.  As I’ve described, I had zero public speaking experience and was terrified of addressing a group of people in a room.  So I signed up for a ten week Toastmasters (Speechcrafters) Course where each week we gave a different five-minute speech to a group.  I learned how to connect with an audience, project my voice, use body language, and speak to time.  Most importantly, I overcame my dread of public speaking so I could concentrate on getting my message across.  Next, I did an intense two-day corporate presentation course at Nida followed by a three-month acting class at Darlo Drama.  It was painful for shy, self-conscious me, but I did grow in confidence.

2. Build a narrative that will captivate and inspire.  You have one minute to win people’s attention.  Always start your pitch with a story that clearly articulates the problem your product will solve in a way they can relate to.  The listener must understand who has the problem and what it is before they can start to engage in your solution.  I’ve delivered my pitch a thousand times, and each time I’ve opened with the story of promoting the Evermore concert in Perth, how I was spending up big on advertising and it wasn’t reaching my audience.  I’m so sick of telling that story, but it works every time!

Next, you explain how your product will solve the problem: inspire your listener at the size of the opportunity.  In music I didn’t need to discuss how many bands or concerts there are in the world as it’s obvious there are a lot.  But if your product is for a more niche market then you need to show how big the market is.

Don’t go into complex product or market details.  Just make sure all the high-level points are covered and told in a way that’s engaging, inspiring and exciting.  Every meeting I do with a new investor there’s a magic moment I look for when I can tell they get the product and the opportunity.  A smile spreads across their face.  I know they want to be a part of our future.

3. Show why you are the person to do this:  Investors look for an entrepreneur who’s had previous success and understands the market they are entering.  Try to find a clever way to establish this as early as possible, as your credibility will change the way they listen to the rest of the pitch.  Before I launch into my Evermore story, I introduce myself as coming from the music industry and having established one of Australia’s largest band management companies (Scorpio).  Then I can introduce the account of the Evermore tour by saying, ‘One of the artists I represented – Evermore…’  There’s a good chance they know about Evermore, so within the first ten seconds I establish that I’ve already built and run a successful company, understand the industry and used to manage a one of their favourite bands.  It all creates credibility and a connection.

4. Use exciting visuals:  Every book you read on presenting will tell you: don’t use boring visuals with lots of words or graphs that people can’t read!  But, almost every entrepreneur does this.  PowerPoint or other visual presentations work by helping to give your presentation structure and driving home points.  When I start to build my presentations, I usually write out all the slides first then practise giving the talk.  I work out what each slide should convey, delete every word from every slide, and then replace them with images or visual representations of the concept the words were explaining.  This is a challenge but you have to get creative.  Nothing is more boring than an entrepreneur delivering a PowerPoint loaded with words, graphs and numbers that no one can, or wants to, read.

5. Know your stuff: Two things you must know back to front before you start pitching: a) Your competitors, and b) Your numbers.  Build an overview of both of these into your pitch so you can show you’ve thought things through.    You should have scoped out the market for other companies doing similar things to you.  Sometimes you won’t have direct competitors, but there’s almost certain to be another product that’s attracting the revenue you intend to take.  What will it cost to switch to you?  If your idea is really good, you’re likely to be asked about potential future competitors.  At almost every investor meeting, someone asks, ‘What are you going to do when Google / Facebook / Groupon / or whoever starts to do the same thing as you?  How will you compete?  It’s very hard to come up with an answer for this but you need to have one.

I said in my last post that you need to have a financial model.  Everyone knows it will change as you build your company.  Your cost-base will probably increase and your revenue may come later than you think.  But you must demonstrate a clear plan to investors; they’re entitled to know how you’ll spend their money and how you intend to make money in the long run.  Once your model is built, sense check it to ensure your costs are reasonable, your pricing structure is inline with others in the industry, and your projected market share is realistic and profitable.  You need to be confident that the numbers you put forward work and then you need to learn them.  Investors love asking about your projected profit in two years’ time, how many sales people or how much marketing you’ll require to reach that many customers, what it will cost, the potential for this in five years’ time, what percentage of the total market you anticipate, and is that realistic?  Just watch an episode of The Dragons Den to see what I mean.  Investors sometimes like to ask tricky questions to see how well you’ve prepared for the meeting.  Learn your stuff!

6. Practise.  Once you’ve built your pitch, go out and deliver it to as many people as you possibly can.  Each person you pitch to will probably recommend that you see someone else (even if they don’t want to invest).  I made sure I followed up each introduction and took every meeting opportunity I could.  It takes a long time, but after each meeting you work out how to improve your pitch.  You’ll find yourself rearranging the PowerPoint slides, adding extra information they found exciting, deleting slides that seem irrelevant.  Each potential investor will ask you different questions, which prepares you for when you meet the ones that really count.

Through these meetings you’ll constantly find yourself wanting to add more and more slides as you get more ideas.  You must keep at the top of mind the need to keep your pitch focused and punchy.  I try to keep my deck to a maximum of nine slides that appear in approximately this order:

1.  Me + my team
2. The problem we’re going to solve
3. Our solution (how Posse works)
4. What we’ve achieved so far
5. The market (how big this could be)
6. Competitors
7. My plan (I include a timeline)
8. The financial numbers
9. An inspiring summary (so we end on a high)

My first presentation was at Innovation Bay and I was petrified.  We were in a Surry Hills restaurant in a room of around fifty investors, and there was just one other female in the room!  I was seated with the two other companies who were pitching, and I asked one of them if they’d ever pitched to a group like this before.  He replied that he’d lived in Silicon Valley for the past ten years and did this all the time.  Now my heart was racing.  My first time speaking in public beseeching a roomful of wealthy men to part with their money, and I was up against a ten year veteran!   In the meal break, we each had ten minutes to pitch our businesses with a PowerPoint projected onto a big TV screen and then ten minutes of questions.  I was up last.

As the other two groups spoke, I couldn’t believe it.  I don’t like to be unkind but they were terrible!   I’m sure their ideas were fine but no one paid any attention, as the speakers had no idea how to present.  The first guy was a techie who was obviously uncomfortable in front of the room.  He mumbled, gave a complex description of his product, and then showed some graphs on a PowerPoint that no one could read.  The next guys (the veterans) went as a pair and didn’t bother using PowerPoint – instead they tried to ‘wing it’ by doing an odd, contrived question and answer session between themselves.  It fell flat; by the time they were a minute in the audience had tuned out and were having quiet side conversations.

When I stood up and started telling a story about promoting an Evermore concert, presenting big pictures of music fans and colourful diagrams, I had the room.  Everyone listened and I raised the first $300K in my round that night.  The others raised nothing.

A few weeks later, I spoke at Tech 23 and got a similar response.  23 entrepreneurs pitched their products for four minutes each throughout the day.  It was my second ever time speaking in public.  As before, I was terrified and had a sleepless night before the event.  Once again, though my preparation made all the difference.  I could move past the fear and engage the room, thanks to my speaking practice at various courses.  My pitch hooked the audience from the first couple of lines, Posse was voted best company of the day and I won an Atlassian award for Best Presentation.  At this stage, I had no product and no team, there were many other companies at Tech 23 with much more going for them, but Posse won best company!  It just shows that it pays to focus on the pitch.  By doing this, what you’re actually saying to potential investors is: I recognise there are no shortcuts in having a startup, I’m willing to address my weaknesses head on by learning how to speak, and I can inspire others to join me.

Here is a link to see this presentation from Tech 23. 

If you’re keen to learn more, I’m running a class on ‘Nailing the Pitch’ at General Assembly in Sydney on May 30.  Details here.