In recent weeks, I’ve been chatting a bunch with peers that are looking to raise money for their businesses. It’s been an instructive experience in many ways, but first and foremost it’s driven home the need for talking points. We’d all like to think that we can walk into a meeting and impress the socks off someone without much forethought but it’s rarely an effective strategy. And we’re all guilty, but when you see prep work done right, it’s transformative. Some of the better venture conferences actually schedule time for pitching entrepreneurs to receive coaching from seasoned peers and investors. It’s time well spent.
Politics offers an extreme example of talking points in action. The current roster of presidential candidates have gone over with staff time and again their positions on every issue, their mollifying answers to questions of personal misstep, the points with which they’ll differentiate their message from competitors. They hold a grab-bag of premeditated discussion threads with which to sew a consistent and compelling story of their candidacy. Sometimes they sound canned, but it’s better to sound canned than to sound incapable.
Seasoned CEOs, public speakers, and others have mastered this practice, too. It’s not always in the toolset of the early stage entrepreneur, and understandably so. Mavericks don’t like outlines.
In the interest of improving one’s fundraising odds, however, below are a few talking point lead-offs to consider. I’m no expert, but I’ve seen plenty of missed opportunities.
Keep in mind that an investor is broadly considering the following: (1) one’s offering and its chances for success in the context of (2) team, (3) market, and (4) financial picture, including unit economics, projections, and capital requirements. Talking points should get at these core issues but more than anything, I’d expect them to help convince an investor of the entrepreneur’s capabilities. To that end, anticipate the following broad topics, admittedly a subset, that given preparation offer ample opportunity to toot your horn:
1. Tell me more about your background. A natural that will come up in 90% of investment discussions. You’ve offered a short bio in your deck and expanded on it in your pitch (perhaps with some humility). When an investor asks to hear more, s/he’s offering an open lead to talk about additional relevant experience and/or perspective. Answer the question, “Why are you here?” Display your commitment to a long road. Imagine your prospective investor is writing a paragraph in his investment memo justifying investment behind you (whether he goes through such documentation or not). If you can’t write that paragraph yourself, consider his difficulty.
2. What have been your roadblocks/learning points/etc. to date? To me, this one’s key. Entrepreneurship requires constant testing and incremental iteration. It requires learning from mistakes and adjusting. Make sure your examples have impacted the company in a meaningful way.
3. What are the important growth drivers for your business? Amazingly, it’s rare to hear the following: “I’m concerned with x, y, and z, and these are the things to which I hold myself/team accountable. Every week/month/day, I’m monitoring them” (that sounds robotic, but you get the idea). Maybe it’s recurring revenue vs. one-off contracts. Maybe it’s sales leads that pass a probability threshold. Different stages of business require different metric monitoring but the practice of distilling many data points into a few key drivers enables clarity and focus. My absolute favorite pitch comment: “Let me show you how we measure this and demonstrate its impact to the business.” The resultant dashboard, spreadsheet, whatever is often a beaut. Sometimes too detailed for a short pitch, but a fantastic follow-up to questioning.
In other words, don’t just hone an elevator pitch which will simply get you in the door. Develop a set of discussion points surrounding yourself and your business, and you’ll rarely be caught off guard. Better yet, you can drive the conversation where you’d like it to go. You’ll be able to realistically explain to friends and family why you’re tackling such a monstrous venture, and the clarity will pay dividends in your actual ops.
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Photo credit: capitoline-06, originally uploaded by T.SC
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This post is gold; thanks Matt!
[...] * Talking points (literally) for entrepreneurs, from venture capitalist Matt Winn. [...]
Thanks, Ben, for stopping by and leaving a note.
Welcome to peHUB readers!
Best,
Matt
Hello Matt,
I liked what you said. I try to build an Entrepreneurs Investors community. Our idea is to bring to entrepreneurs advice that will help t hem in the growth process. They can post their needs. Most entrepreneurs are too isolated and just don’t know what to do. They also do not have all the financial resources to ask for advice. We will be honored if you can participate to our community.
I leave you the decision to publish the address of the website.
Thanks and good work!
Hi Matt,
I just recently entered into a 1-minute pitch competition at Anderson at UCLA. I’ve talked to countless investors, and a lot of them stress the importance of the 1-minute pitch because they just don’t have the time nor the attention span to listen to a long drawn out explanation of your company.
Its great to hear your perspective on the issue of talking about your company and pitching it correctly. I know that I love to just start talking, and sometimes I get caught up with all the little detailed features of our product that I lose focus about what’s really important. Your three points definitely drive home the point to keep the core of your company direct and cohesive.
Best,
Jun Loayza
http://www.junloayza.com
Matt,
I would love to hear your take on Services4Stock (www.Services4Stock.com), I wan into an ad of theirs in the NYTimes I think on the 25th or 26th of Nov. I think this might be a very contagious idea, but surprisingly I have not seen any forum or blogg posting discussing it. What are your thoughts?
Sincerely,
Lexi
Jun, thanks for the kind words. If you’ve got a minute, you’re pitching a “trailer,” something enticing to encourage a “full viewing.” Checked out, and enjoyed, your blog.
Lexi, I briefly looked into Services4Stock. A couple thoughts: (1) for a company with serious growth ambitions, giving up stock for advertising should be viewed as VERY EXPENSIVE advertising (especially since it’s easier than ever to receive free coverage if one has a great product); (2) I like that in a business cycle downturn, when publishers will have more unused ad inventory, startups will also be more cash strapped and both parties can really benefit. Thanks for pointing me their way!
Best,
Matt
This article is outstanding! I want to sit down and write out my questions/answers and then have friends and family grill me! Five stars, Matt!