How To Pitch To An Investor

As an investor, I listen to lots of pitches from founders who want me to fund them. Quite honestly, many of these pitches are extremely boring. They all seem to pretty much follow the same format, and it seems that everyone uses the same template when creating their slides. For example, their financials invariably display a hockey stick curve, which shows how much money they’re going to be rolling in after a few years. It seems that they are all copying a generic pitch deck, and then customising it by adding their logo and photos of their team.

This is such a wasted opportunity. The whole point of a presentation is to emotionally connect with the investor, and excite him, so that he wants to be a part of your journey, and is willing to explore how he can help you to succeed.

Part of the problem is that most founders are logical, left brain engineers. They are well organized, and because they believe they are pitching to rational investors, they want to talk about numbers and figures, in order to convince them as to why they should fund them. Unfortunately, what they fail to realize is that’s not the way most decisions are made. We typically make decisions using our reptilian brain, based upon our feelings , and then we use our cortex in order to justify these decisions.

This is why smart founders will first touch an emotional chord with the investor, before trying to provide logical reasons as to why they should invest in them. For one thing this will make your presentation stand out from everyone else’s , and this will help to overcome the fatigue which most investors suffer from , because their eyes typically glaze over when they open the hundredth powerpoint deck of the day.  They want to find a founder whose passion is contagious – someone who can pull at their heart-strings before trying to engage their brain.

While figures and numbers are necessary, they are not sufficient. Let’s not forget that investors are also human , and research has consistently proven that people make decisions based on emotions,  and then justify them with facts. Your experience, qualifications, market size and financial projections are all relevant and important, but they are secondary. If you don’t trigger the correct emotional responses in your investor, then even a strong business proposal, justified by hard data and numbers, will find itself locked out in the cold. Neuroscientists have shown that the reptilian part of the brain ( which is where emotions arise) acts as a gatekeeper, and it filters what messages are passed on to the analytical neocortex. This is why emotions trump logic, unless you are Dr. Spock from Star Trek !

Here are some tips.

Use stories, not stats ! Stories are powerful and emotional, which is why the most memorable presentations don’t start with data – they start with a compelling personal story.

Use pictures to tell the story, because pictures are far more memorable than words. Studies have shown that people remember only 10 percent of information when the content is delivered verbally. Add a photograph and retention soars to 65 percent !

Express your passion – it can be contagious and will help you stand out from other founders.  Simply ask yourself this question: “What am I really passionate about?” What makes me want to get up and come to work in the morning, even though there’s no practically cash left in the back and the company seems to be going down the tubes ?

This kind of presentation is far more effective because it is much more memorable. Quite frankly, at the end of your pitch, no one is going to remember your numbers, or your business model, because they are pretty much the same as every other founder’s. Investors have heard similar pitches many times before, and are likely to be jaded, skeptical and cynical. However, if you can tell a story which is different from anyone else’s, then this is going to provide a hook which will help you stand out. Will they go back home and tell their wife about how cool your idea is? If you can achieve this goal, even if they don’t fund you at the first meeting, they’re much more likely to want to continue engaging with you. Remember that the purpose of your deck should be to help you to start establishing a relationship, which you can then build on over time.

The problem with this approach is that it requires a lot of creativity and  imagination, and this is often something which most founders don’t have. This is why it’s a good idea to work with an artist or a  coach who will help you to polish your pitch. It can take time to get comfortable with a new way of doing things, but you should keep an open mind, and be willing to experiment and learn, so you get better over time. Thus, you can try out variations of your presentations, to see which ones are more effective at helping you to connect with investors. The ones which  are based on tugging at heartstrings rather than stimulating the cortex, and likely to give you far better returns!

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