As an entrepreneur, there are many tools at your disposal to help elevate your product (or service) idea; packaging, press releases, customer testimonials, endorsements, etc. However, the best tool an entrepreneur has at their disposal at anytime in any situation is their pitch. Good pitches will open doors to new customers, investors, partners, endorsements and more; a bad pitch can put even the best of products into obscurity. If you've ever seen the show Shark Tank, you've witnessed entrepreneurs giving their best pitch to a pool of potential investors. The results of that pitch are often mixed, sometimes the product idea is good but a terrible pitch has turned the investors away, while other times the pitch was absolutely perfect capturing the audience and getting investors to compete for an opportunity to invest.
Every entrepreneur needs to have multiple pitches ready to go depending on the situation. Are you talking to a customer, client, investor, banker, random stranger? The situation you are in determines which elements of your pitch you will want to include. With so much riding on a good pitch for each situation, it is important to understand what makes a pitch good. I sat down with Shawn Kemp, a long-time local angel investor, to find out more about pitching, specifically when seeking investment.
DEFINING THE PITCH
Pitching can take many forms depending on what stage you are in and what you are hoping to accomplish from your pitch. The most common pitch is one in which you hope to convince accredited investors to put money into the company in exchange for an equity position. However, there are many different types of pitches that may be used for things other than raising money, such as finding other founders, closing strategic partnerships, and bringing on advisors. In fact, even the initial sales conversation is a form of pitching.
PREPARE FOR THE PITCH
Every entrepreneur who comes to pitch to an investor should be investment ready. They should be prepared for the follow on due diligence and understand the common deal terms that are normally used for a company at their current stage.
MAKING THE PITCH
A good pitch does one thing; it convinces the people you are pitching to follow up with you after the pitch. In 10 minutes you can't possibly communicate everything about your idea or business so it focuses on quickly articulating the problem, solution and opportunity that exists.
Even for entrepreneurs who are not seeking investment, being prepared to talk about your product or service to the right audience with the right information is critical. Learn and understand what motivation your audience has for listening to what you have to say and leave out anything that does not fit with that motivation. Using industry jargon or complicated terminology will not help you make a connection to a customer, but might be perfect for a potential partner or adviser. When talking to potential customers, tell them about the benefits they will experience in using your product or service. Know your business and industry inside and out, if you claim to be No. 1 at something, be sure you know who else is in that industry and why you are No. 1.
For every situation or audience, it is important as the entrepreneur to be prepared to talk succinctly about your product or service. According to Entrepreneur Online, the average attention span of adults is down to about 8 seconds, so capturing the attention of your audience needs to happen quickly. Being prepared for every situation will make that task easier and earn you more business in the long run.
You can find out more about crafting the perfect pitch from Shawn Kemp, founder and COO of ActionSprout (actionsprout.com) and the BIG Idea Lab (bellinghaminnovationgroup.com), who is speaking at the Inventor Insights event from noon to 1:30 p.m., Wednesday, May 7, in Barkley Village, 2211 Rimland Drive, room 106.
ABOUT THE AUTHOR
This is one in a monthly series about topics of interest to entrepreneurs. Lara Merriam-Smith is the program manager for NW Innovation Resource Center, a Bellingham-based organization that supports economic opportunities through entrepreneurial innovation in northwest Washington. It helps inventors looking to take products to market and connects new start-up businesses with resources to help them grow. For more information, go to nwirc.com.