ETIQUETTE OF THE PITCH PROCESS
Karl Dakin
Capital Coach | Stakeholder Investor Campaigns | Design, Stage, and Manage or Support | Reduce Time, Money, and Risk of Raising Funding | Increase Probability of Success! | Opportunity Management
CONTENTS
?·?????? Funding Point
·?????? SuperCrowd Chicago
·?????? Top Fundraising Voice
·?????? Successful Funding
·?????? Don Cohen
?
?FUNDING POINT – ETIQUETTE OF THE PITCH PROCESS
?Frequently, I have a full pitch package sent to me by someone I do not know about an investment opportunity I have not requested and about which I know nothing.
?When this happens, I have to assume that the person seeking funding knows nothing about raising capital, which automatically downgrades his or her credibility. Yes, since I coach people on raising funding, this may appear to be the perfect consulting opportunity. However, if this person has already set expectations on raising funding and expended time and money in preparation and distribution of the investment package, it would seem that the train has already left the station and the amount of time and energy to try to fix the capital campaign may prove expensive and the person seeking funding may prove unmovable in their thinking.
?Before presenting an offering pitch to an investor candidate, an entrepreneur should already know the following:
1.???? The investor candidate’s willingness to receive the pitch,
2.???? The investor candidates’s investment criteria (minimum characteristics)
3.???? The investor candidate’s investment preferences (which investment opportunities are matching with the business and personal interests of the investor candidate)
4.???? The investor candidate’s current capability in making an investment.
?Without knowing this information, the entrepreneur making the pitch is being rude. Imagine watching a football game on Sunday afternoon when you hear a knock at the door. When you open it, a person bursts in and sits on the sofa in your favorite position. It would not be a hard guess that you are unhappy, probably upset, and have already dialed 911 to notify the police of an intruder.
?Yes, from the perspective of the entrepreneur, this is ‘opportunity knocking’. This myopic attitude that the only person in the world who is important is the entrepreneur is an attitude that few will tolerate.
?There is an etiquette to presenting a pitch. It serves to demonstrate the respect for the investor candidate, which is a key to having a quality relationship.
?A pitch should never be presented without the permission of the investor candidate. There are a multitude of acceptable ways to gain permission, but starting with a pitch is like jumping into a story when its halfway told.
?After gaining permission, the first step in presenting a pitch is to provide the investor candidate with a short (no more than one page) description of the opportunity – a solution accepted by the market that will be managed by the entrepreneur. The deal structure (equity, debt, contract, or gift), the price tag (dollar per share, percentage of revenue, or interest rate), and the term should all be left out of the initial presentation. The entrepreneur is making a quick test of the simple interest level of the investor candidate.
?If the opportunity is of interest, then the second presentation takes the form of a survey in which the investor is asked as to their preference in deal structure, terms, or other conditions or limitations upon which they may invest. If the presentation demonstrates that there is no possible match between the business and the investor candidate, then no further contact is needed or appropriate other than to ask the investor candidate if they know of anyone who might match the opportunity.
?If there is interest, then the entrepreneur can propose a price for consideration by the investor candidate. This may result in a rejection, a counter-offer, or a request for more information. Anything other than rejection represents the willingness of the investor candidate to negotiate.
?Simple deals that only offer the investor candidate an outcome in the form of a return on investment leaves price as the only thing to negotiate. If the entrepreneur offers other incentives, there may be more bargaining room.
?Before accepting any deal, the investor candidate will commonly ask for more information. This is the appropriate time for a slide deck, offering memorandum and possibly the investment agreement. I prefer to hold back the investment agreement until requested by the investor candidate which seems to give them a greater sense of control in making a deal.
?Keep in mind that every time the entrepreneur offers up information on an investment opportunity the investor candidate may bring in others to advise them and/or help them understand the opportunity. This increases the cost to the investor candidate which they may want to avoid if they have no interest. It also means that other people with other opinions and different agendas must all be sold on the investment opportunity before a deal can be completed.
?The pitch process is almost always four or five meaningful and productive interactions between the entrepreneur and the investor candidate. Any story of a shorter process is more likely the makings of a television show script and less about reality.
?At this point, I have seen entrepreneurs fidgeting over the slower steps of proper etiquette and wanting to jam the pitch in the face of the investor candidate to get an answer. Any quick answer is almost certainly a ‘no.’
?It is also an accepted fable that “There’s no harm in asking.” Disrespecting an investor candidate is harmful. Not only is any possible relationship with that person or funding source busted but there is a high probability that they shared that story with other investor candidates.
?
SUPERCROWD CHICAGO
?YESTERDAY, I presented at SuperCrowd Chicago with over 20 speakers on the topics of investment crowdfunding, impact investment, community support, capital markets, and small business with past, live, and future investment crowdfunding projects and campaigns.
?My presentation was on the topic of ‘Crafting Crowdfunding Offers to Customer’ where I shared my work and thoughts on framing an investment crowdfunding campaign to match with the needs and capability of a customer of a small business.
领英推荐
?The event was live-streamed. You can see the entire recording of the event on YouTube at:
?
TOP FUNDRAISING VOICE
?LinkedIn recognized my work over the last six months in publishing this Instant Funding newsletter, the production of my Successful Funding show live streamed on LinkedIn and answering questions on funding topics with the issuance of a badge to me for “Top Fundraising Voice”
?
SUCCESSFUL FUNDING
TUESDAY, JUNE 11, my guest on the Successful Funding show was Eric Hanson. We discussed Viable Investment Opportunities.
You can see a recording of this show at:
You can see all of my shows at the time of broadcast or recordings of past shows at my profile on LinkedIn.
?
DON COHEN SHOW
MONDAY, JUNE 10, I was a guest on Don Cohen’s show with Todd Dewett. We discussed leadership which focused on balancing one’s business and personal life.
You can see a recording at:
I enjoy being a guest, engaging in conversations with other guests, and building communities with Don, using LinkedIn as a communication channel. Every show is its own adventure as we start with a word of the day and then see where the conversation goes from there.
Don is an expert on LinkedIn, particularly on the use of Live streaming to build brands and communities. We will discuss using LinkedIn as a social media platform for building communities that support raising funding.
All shows where I have been a guest can be viewed on Don Cohen's LinkedIn page under Posts.
?
Karl Dakin, the Capital Coach
Dakin Capital LLC
?
?
Taking the time to understand investors in order to effectively tailor pitches is a key part of the process.
??Founder ??GOLDEN Connections??GOLDENSpaces Membership Housing Communities ??—Mental Strength ??Empowering Golden Minds— Women over 55??Widow ??Live Broadcaster ??Woman In AI Innovator??
9 个月Excellent Karl Dakin
4x Founder | Generalist | Goal - Inspire 1M everyday people to start their biz | Always building… having the most fun.
9 个月Absolutely agree! Taking the time to understand investors and tailor your pitch shows respect and can really set you apart. It's all about building genuine connections. Thanks for this reminder!
Capital Coach | Stakeholder Investor Campaigns | Design, Stage, and Manage or Support | Reduce Time, Money, and Risk of Raising Funding | Increase Probability of Success! | Opportunity Management
9 个月How do you initiate your pitch?