How to Prepare your Fast Pitch for Investors
Perfecting Your Fast Pitch and Your Email Quickview
What makes fund-raising so hard is not only understanding this process, but also at the same time putting your deal into a package that can be communicated and shared quickly and efficiently. Venture capitalists, especially those that focus on financing early stage ventures, get carpet-bombed with packages outlining business concepts at various stages of development.
Facing such an information glut, venture capitalists have been conditioned to consume data at only two speeds. One is very slow, used when they are reviewing and editing investment agreements and the financials of deals before them. The other is very fast, as they become highly skilled at quickly sifting through slush piles of business plans and scanning thousands of e-mails.
Therefore, your potential investor is likely to make an instant judgment call just on the strength of the first few words you speak at a networking event, or the first few lines in your Executive Summary. We know of some VCs who consider the strength of the contents by looking only at the “Subject Box” of entrepreneurs’ e-mails!
So how do you get around this communication problem? How do you get what you want said before the right person, at the right time, and in the right way? First you must “disambiguate” what you are attempting to communicate. Disambiguate, a word the Pentagon actually created, means to simplify and clarify.
Perfecting your Fast Pitch
It is this simple: First moments matter most. The whole point of your Fast Pitch is to get investors interested enough in you to get their business cards and to agree to meet with you at a later date, or at least to get them to refer you to someone else who might be interested in your deal. Jason Salfen, at MIT’s Sloan School of Management Entrepreneurship Center, puts it succinctly: “You don’t need to reel them in, it’s just getting that initial hook.”
Investors know that the way you will engage your initial customer base is through a Fast Pitch. It is the same for attracting strategic partners and even recruiting executives, which means that in general, the investors know that entrepreneurs best suited for funding can usually articulate their venture’s value proposition within a sentence or two. If it is more complicated than that to explain, it is probably not ready to be funded. So once you have your Fast Pitch down, be ready to catch the fruit as you shake the tree.
Fast Pitch Checklist
1. Who We Are
What stage are you at in the food chain? Describe internal capabilities that no one else has. Were you founded by a serial entrepreneur, a domain expert, a mad-scientist who is best in the field, or do you have a team led by a branded-CEO? Profile your external team’s capabilities. You have assembled award-winning advisors, board of directors, and investors.
2. What We Got
Describe your opportunity, market need/pain and solution. Specifically describe your traction in your market space. For example, letters of intent from marquee customers or recurring revenues.
3. Where We’re Going
Overview of your growth benchmarks/milestones, discuss what is next in the product pipeline, describe where you see the sweet spot for your customers lie.
4. What We Need
Do not offer specific financial needs, especially in a public forum. Just be prepared to answer privately these questions, “How much guys need to launch this thing off?” and “What is your use of proceeds?”
5. Why Now
Get investors interested in following up with you immediately after you meet them. State what has changed in the world, like the inflection point, that opens up the window to your particular opportunity.
6. What We Offer
Describe a basic understanding of how you will provide a return on investors’ money.
7. Case Studies and References
It is very important to cite an example, preferably with a marquee customer, how you solved a particular pain. Also be prepared to have a viable list of references, personal and for the venture, to add credibility to your deal.
Honing Your Email Quickview
Internet e-mail has become a key component of communication in the business world today. Think of your Email Quickview as the equivalent of tapping an investor on the shoulder at a networking event and saying, “Excuse me, but do you have a minute to talk?” If you are referred to investors by a colleague, or by an entrepreneur with whom they have invested, tell them this in the first line. Say “Referral from Dr. Smith” in the subject box of the e-mail and be sure to “CC: Dr. Smith.” This is not only a courtesy to Dr. Smith, but it also demonstrates that you have spoken with Dr. Smith, or better yet, know him well.
Prepare your Email Quickview by writing down what you are basically saying in your Fast Pitch. Close by stating something very positive and affirmative like, “Dr. Smith (your referral) was excited by our idea, I know you will be too. I look forward to hearing from your soon.” Be sure to include your e-mail address and phone number. Printed out, your Email Quickview should not be much longer than one page. Be sure to Google the person that you are contacting.
It is very important to learn as much as possible, and then try to personalize what you have learned when you write the e-mail. Remember that many investors will be reading their e-mail via a BlackBerry-type device, so make sure not to use any HTML, embedded net links, graphics, or attachments with your Email Quickview.
Finally, do not sabotage yourself by letting your need for instant approval get the best of you. Do not call to follow up, because you will appear anxious and unprofessional. With a correctly prepared e-mail you have invited a response, so be patient and wait for it.
Nailing Down Your Executive Summary
If you have targeted the right investor at the right time, you will get an e-mail response asking for more information. Have your Executive Summary at the ready in your quiver for quickly following up. Once investors have your Executive Summary, you now have a reason to call them, politely saying something like this, “I’m calling to make sure you got our attachment OK.” And you can add, “I’m following up to answer any questions you might have.”
An effective Executive Summary succinctly highlights your Ten Value Drivers in three to five pages. It is best written in a word-processing application, like Microsoft Word. It should never include graphics, flying logos, HTML, or net links to special Web sites.
If the Fast Pitch and Email Quickview are what get customers into the store from the streets, consider the Executive Summary as the brochure that prospective customers take home with them. A well-prepared Executive Summary will give you more than a mere advantage over the other deals on the desk of investors. It will invariably make the difference between success and failure.