Small Business: Making a winning pitch to investors
Every would-be entrepreneur thinks his or her idea is a winning one.
Convincing investors of that can be a lot harder, particularly given the number of pitches they're presented with on a regular basis.
With only minutes to woo a potential investor, the quality of your pitch presentation can mean the difference between funding success and failure.
"Investors are paying very close attention to everything you say in the first few minutes," says Oren Klaff, managing director of Los Angeles-based Intersection Capital, which executes financing for rapidly growing companies, and author of "Pitch Anything" (McGraw-Hill; $22).
What you're doing during the early minutes of a presentation is earning the investors' attention for just one more minute, he notes. And then once you have that minute, you work on earning one more, says Klaff.
The longest investors will listen to you in a pitch-type forum is 20 minutes, explains Klaff. Within that time frame they should get all the information they need to decide if they want the deal and are willing to chase it, he says.
So what are the key elements of any pitch?
According to Andrew Hazen, CEO of LaunchPad Long Island, a business accelerator platform in Mineola and Huntington that holds monthly pitch nights where startups can pitch to potential investors, the essentials of a great pitch include:
The team (who's behind the business)
Market size and opportunity
How quickly, costly and complicated it is to scale the business
How investor funding will be used
Info on patents, trade secrets and other intellectual property
Passion and confidence from the person pitching
"As the old adage goes, you can only make one first impression, and this is certainly the case when it comes to pitching investors," says Hazen, who's also a serial entrepreneur, attorney and angel investor on the board of the Long Island Angel Network.
Lead with the big story, advises Neil Kaufman, chairman of the Long Island Capital Alliance in Melville, which holds quarterly capital forums where emerging growth companies have an opportunity to make presentations to investors.
"So many times, they bury the lead," says Kaufman, a partner at Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf LLP in Lake Success. "They don't say why investors should care until the 17th slide in the presentation."
And what investors particularly care about is return on investment, he adds.
They also want to see you have some skin in the game. An entrepreneur who isn't willing to invest personal funds in his or her startup is a major turnoff to an investor, says Kaufman.
When pitching, keep in mind practice makes perfect, says Hazen. Practice in front of a mirror, gather your colleagues, friends or family or videotape yourself, he suggests.
"You're always fine-tuning," explains Joseph Triglia, owner of Stony Brook-based Triglia Technologies, which has provisional patents pending on a clean-energy technology that significantly reduces the energy and time used in the drying of sawmill lumber.
Triglia's previous firm, Jubilee Flooring in West Islip, was a winner at one of LaunchPad's pitch nights last year, earning a mentoring session and one month of free space at LaunchPad. Within the past year Triglia has transitioned his clean-energy technology to his new company, housed at the Clean Energy Business Incubator Program at Stony Brook University.
He'll be pitching the Long Island Angel Network in June for first-phase funding for his firm.
Honing your pitch "comes down to knowing your industry, your business and where you're going to be effective," Triglia says.
A successful pitch is:
-- provides insight
Source: Oren Klaff