Finding the right formula for pitching a product

When it comes to pitching to investors, you often only have seconds to capture their attention. Think about the time it takes to ride an elevator, and that's about how long you've got to make an impression.

So if you haven't perfected your investor pitch, you could be missing out on your next big opportunity, say experts.

"The bottom line is, if your pitch stinks, you're not going to get any money," says Dave Sherman, author of "Elevating Your Elevator Speech" (Dave Sherman Speaks; $19.95) and president of Dave Sherman Speaks, a Scottsdale, Ariz.-based speaker, trainer and consultant business. "Investors know within 30 to 60 seconds whether they want to continue to listen." 

Attention, please
That leaves little time for wasted words, says Sherman.

"What these people want to know upfront is how this [investment] is going to potentially benefit them and how it's going to potentially benefit the public," he notes.

If you start your pitch going into painstaking detail about your company and product, you'll likely lose their attention, he adds. You can always give them an executive summary or business plan afterward.

"Many entrepreneurs go into too much detail about things we're not looking for," says Gina Vakili, vice president of marketing for Canaan Partners, a Menlo Park, Calif.-based global venture capital firm. "They don't say clearly in one sentence 'here's what the product is and the pain it solves.' "

Because they found so many entrepreneurs didn't understand the basics, the company created its own pitch workbook, available at slideshare.net/canaan partners/canaan-entrepreneur-pitchbook-presentation.

"It helps people think through their business in the way we'll be looking at it," says Vakili.

Prep work
In fact, the more you can put yourself in the investor's shoes, the better off your pitch will be.

"Know as much as you can about your investors," advises Avi Muchnick, chief executive of Aviary Inc. in Hewlett, which created an online editing suite that allows users to edit images and audio through its site, aviary.com. The company recently snagged $7 million in venture capital.

Many investors now have their own Web sites, blogs and Twitter feeds, which can help you learn more about them, explains Muchnick, whose company has raised more than $11 million in funding since 2007. Among its high-profile investors is Amazon.com founder Jeff Bezos.

When pitching, Muchnick likes to use visuals to draw investors in: "You want a bright lure to attract the biggest fish."

A PowerPoint presentation is commonly used to make pitches, says venture capitalist Hal Wilson, managing director of Northwood Ventures in Syosset, which manages a fund of more than $100 million.

"The presentation doesn't have to be long," says Wilson. "It's quality over quantity."

Northwood gets more than 25 funding proposals weekly, Wilson estimates, noting that Northwood likes to see a business plan or opportunity summary first and then, if interested, will set up a meeting with the management team.

"The quality of the pitch is definitely important," says Wilson. "They [entrepreneurs] need to be well prepared to present their business case to investors."

Practice makes perfect
Practicing your presentation beforehand helps, says Jeffrey Bass, chairman of the Long Island Capital Alliance, which holds four annual mini-forums where entrepreneurs can pitch investors (the next one is March 12 in Melville).

Each presenter usually gets seven to 10 minutes to make his or her case, says Bass, chief executive of Executive Strategies Group Llc, a Great Neck strategic business advisory firm.

"If you can't quickly and confidently explain your business, your financing needs and how financing will be used, you've got a problem," says Bass.

Pitch basics
1. Dress in conservative business attire.

2. Have a cogent, well-prepared business plan.

3. Practice making the presentation within an eight- to 15-minute time frame.

4. Speak confidently. If you're not feeling confident, don't make a presentation.

Source: Jeffrey Bass