Your pitch isn’t working, and you know it.
When what your transmitting is not being received, it’s a difficult challenge. Maybe you’re delivering bad news, an unpleasant message, or other details that are unwelcome. But, in some form or fashion, you’re running into objections, and your audience is not agreeing with you. What do you do?
You know how tough the Sharks can be, on Shark Tank. Here’s how to survive the toughest audience. Imagine, if you will, that you are about to deliver a pitch for your business – to a room filled with people who aren’t at all convinced that you can succeed.
Example: How to Pitch to Angel Investors
An excerpt from The NEW Elevator Pitch by Chris Westfall – All rights reserved
Introducing Aviza, a design and manufacturing company:
Aviza is a fashion design company specializing in innovative sports eyewear solutions for triathletes, marathon runners, and fitness enthusiasts. And unlike Oakley, Ray Ban or Maui Jim, our products are built to go from glasses to swim goggles to prescription lenses with just a click. One pair, three sports: so triathletes can shift from running to swimming to cycling in a matter of seconds.
Carlos Mendes is the Director of Business Development for Aviza Eyewear. The company has received a small six-figure investment from friends and family, allowing them to fund design and prototype development for a unique brand of sport sunglasses. The team has secured low-cost offshore manufacturing for their innovative designs, but they need more capital to produce the product in mass quantities. Carlos, Linda Sifuentes (the CEO and lead designer) and Jeff McDonald (operations) pitching a group of investors in Miami. Carlos stands up and moves to the front of the room as he speaks. [Note: Luxottica bought Sunglass Hut in 2007]
CARLOS: When Linda [the CEO] first told me about Aviza, my first reaction – quite frankly – was, ‘this will never work!’ The market is too crowded. Sunglass Hut owns the market. If you’re not with Luxottica, you’re not in Sunglass Hut. You are nowhere. So I said to Linda, ‘How are you going to get into Luxottica with a new brand?’ and she said, ‘Stop. Stop. STOP. That’s my line. How are YOU going to get into Luxottica with a new brand?’ [the group laughs].
Jeff [Operations Manager] and I spent 12 years at Sunglass Hut, and we survived the acquisition in ’07, so we still have a lot of friends there. Soooo…. 12 days ago, we got a signed letter of intent from Sunglass Hut. If we can produce the Aviza in sufficient quantities, Luxottica will put us in half of their US stores. So, that’s 781 stores right there – plus online sales. Hm. So I said, OK…Then, I thought about it some more, and I thought this still isn’t going to fly. How can you get a foothold against Ray Ban, or Oakley? I mean, Luxottica owns Oakley – wouldn’t they favor their own brand? But Jeff, our Operations Manager, stepped me through the unique advantages of Aviza – which we’ll talk about more in a few minutes. Basically, Sunglass Hut wanted to know, what’s beyond Oakley? And we showed them a solution. They liked it, but I still wasn’t convinced. I mean, look at consumer spending right now! Look at other retail plays – even Luxottica is down by x% this morning! How are we going to get traction while consumer confidence is so low?
Well, I can’t change the market. There’s no way I can bump up consumer spending, and neither can you. I mean, maybe if we all go down to the Aventura Mall today…but that won’t help the whole country. [mild chuckles, since two of the angels live in Aventura.] But we thought about it, and if we create a world-class product with unique advantages to the ultra-sports enthusiast, the upside on this venture gets very, very attractive. We’ve created the prototypes and sold the concept to the major distributor for eyewear. Now, we’re seeking a $2.1 million investment to fund operations and manufacturing, through our facility in Venezuela. The deal book will show you the financials and our assumptions, but before we go there – let’s try on some new sunglasses, and see how Aviza really fits for you.
Here’s a look at the elements of Carlos’s elevator speech, piece by piece. Carlos absolutely connects with his opening remarks, because he says what everyone is thinking: “This will never work!” But, if it does, the upside could be huge. Would you have the courage to speak honestly and openly, the way Carlos does? Could you begin with what every investor is thinking, and be candid and forthright…and STILL sell your idea? You can, if you really trust in your concept and your team.
Think about it: An investor only needs one really good reason to invest. Carlos doesn’t waste time trying to sell 16 benefits (or 23 retail chains) to this group. Once he’s established a connection, he moves to a clear and precise call to action, with a dollar amount for the investors to consider. See below….
- CAPTIVATE: In this case, the “This will never work” opening is completely unexpected because it’s as if he’s reading the investors’ minds. How will this thing get off the ground? The answer lies in Carlos’ ability to layout the team’s solution for the audience. His opening demonstrates some of the rapport among the team.
- LANGUAGE– Carlos establishes a surprising level of credibility:
- He knows the “threat” (in this case, retail distribution through Sunglass hut)
- He worked for the threat – implying intimate knowledge of the market, and the market challenges
How does this perspective inspire confidence for the Angels? The team (although it was probably him, primarily) has already conquered the threat. The investors will certainly drill into the history of the team, as part of their due diligence. But that comes later – the “we” language is important here, as Carols has a “Who” that’s very powerful, indeed.
- AUTHENTICITY: Drilling further into a contrarian process, Carlos is speaking the thoughts of the investors, via a logical and clear-headed approach to the industry. The interest shown by Sunglass Hut indicates that their product is both timely and interesting (Carlos’ “Tell me more…” is: Why are they interested in looking beyond Oakley? Could it be that the brand has peaked, or is in decline?) Wouldn’t you like to know?
- RELEVANCE: Continuing with the third and final obstacle, Carlos shows that he knows the group, and establishes a familiarity through a humorous interjection. Perhaps the most relevant part of an angel pitch is the current state of the market. If conditions are favorable, then results can be managed to greater success. How do you pitch in a tough economy? By acknowledgement, and demonstrating a clear path to success. But that level of detail comes later…
- INSPIRATION: Comes when the obstacles are overcome, minimized or (at the very least) identified (the talk about consumer spending and market conditions). The upside is the “why” for the angels. The upside has to be shown to be compelling, but not over-sold.
- TACT: The direct approach. The number is $2.1 million. The upside is real, and powerful, but not detailed (that’s a “Tell me more…” answered in detail in the deal book, which he hasn’t handed out yet). Carlos says exactly what he needs. The focus here is on getting the Angels to buy in to the concept and the team. Without that connection, the numbers and financials won’t mean much. Remember, this pitch involves the Angels – the personal connection is important here.
- YES! Now is the time to pass out the deal books, and let the investors get a look at the numbers and the assumptions. The “Tell Me More…” should be focused on the upside – BECAUSE THAT’S WHAT HE LEFT OUT OF THE PITCH. What about other retail outlets for sunglasses, such as sporting goods stores? Won’t they carry the products as well?
Ah yes! You are picking up what Carlos is laying down…. Wouldn’t it be great if the investors asked those questions? Clearly, Carlos has thought about the outcomes he wants, and the questions that will get him there.
Whether you are pitching a business proposal to a banker, a Vice President at a Silicon Valley VC, or an Angel, you need to come across as confident, reasonable, and committed. How will you convey, “I’ve thought this through”? Or even better, “We’ve thought this through”, in your pitch?
Your Highlight Reel
Invest In My Company – Pitching to the Angels
- Pitch your people, not your ideas
- Watch out for big competitors
- Prepare complete and reasonable financials
- Choose the right person to make the pitch
- Don’t pitch the market, pitch your assumptions
- Answer questions with calm enthusiasm, and prepare for the questions you’d most like to hear
The most powerful pitch starts with what your listener is thinking. Do you have the confidence and the ability to begin at that point, even if your audience is sending you a negative vibe?
When the stakes are high, and the conversation really matters, you’ve got to anticipate objections and obstacles. Find out more about how to get past those challenges, with coaching, keynotes and seminars from Shark Tank coach, Chris Westfall.
Shark photo courtesy of Flickr. Used under creative commons, some rights reserved. https://www.flickr.com/photos/drsnitch/