Steve Huey’s Blog

If you are walking into the den to pitch your company you should get a feel on how a potential investor will be evaluating your idea.  I know there are a ton of advice that focuses on the business idea.  The following few examples are part of the whole but not the whole:

• Market Size
• Management Experience
• Business Model
• Ability to attract clients
• What problem are you solving
• Can you identify the people who want the solution
• Can the people who want the solution afford to buy it
• etc. etc.

These are great things to think about but I would like to add the following for consideration:

• The Idea: This is probably the superset of all questions asked above so answer them.
• Management: Why did I pull this one out because in Louisville “You always bet on the jockey not the horse”.
• Timing: First is this an idea or product that will take years to catch on or is it a little too late?  Second how long will it take to grow the company and how long will it take to get my cash back.
• Valuation: Too frequently a management team does not address the valuation question in the pitch – preferring for the investors to set the price.  Hey that falls under that quaint rule “Who ever names the price first loses.” – Don’t believe it – name the price get your money and grow your business.

Look I hate to add four more things to the mix but thinking about them before you do your pitch really will help.

Hey – want to do better on your next pitch – try some of these tips:

1. Adding up years of experience is really lame!  As in, “Our management team has over 30 years of industry experience.”  What?  How many people on the team 25?
2. Word walls on PowerPoint presentations BLOW!  Then again so does crusty PowerPoint presentations.
3. Demo of a website – Always expect there to be no connectivity.  It never fails the internet connection you were gauranteed to have does not work or there is a firewall issue, or no one told the IT guy or… you get it.  If you are to demo a website make sure you have the bandwidth prior to your pitch and always have a plan B and C.
4. Don’t use the opportunity to let everyone in your management team have a chance to talk.  Too many switches of presentation giver is bad.  I have seen four people give one pitch.  This ruins the continuity and interrupts the flow.  Inevitably one of you step on the other.
5. Never contradict one of your team mates.  I had a group actually start arguing over an industry fact – like I am going to invest in a management team who argues in front of investors.
6. Answer the key five questions http://hueyequity.com/blogg/2008/05/19/the-1-thing-a-web-company-should-provide-to-potential-investors/

I hope this quick reminder helps you as you pitch your business.

I sat in on another pitch the other day – staring at a PowerPoint…

I think you might guess where this is going.  Why is every pitch a boring PowerPoint?  Show your product if you can.  Do something different – it is similar to American Idol – where Simon states how disappointed he is as he was hoping the contestant would be memorable but isn’t – do something memorable. Please! 

If you are like everyone else and your company is like every other company – why do I want to invest?  Here is some advise:

1. Don’t have a presentation – give a speech – tell a story
2. Show your product – even a mock up is better than nothing – wire frames of a website are ok.
3. Answer the key questions (http://hueyequity.com/blogg/2008/05/19/the-1-thing-a-web-company-should-provide-to-potential-investors/)
4. If you need to show a slide show it while you are talking about it and then advance to a blank screen as you stop discussing that one point.  By doing this you keep the attention on you as a speaker and not the slide.
5. Hand out the slides or have a leave behind that you distribute after your talk.

Don’t use PowerPoint as a crutch.  Focus the attention on you and your business.

So I hear from time to time that the funding has dried up!  I hear that people can’t raise money for their business – that investors are stingey or that no one understands the potential of a company or an idea.

I think – that is wrong.  I have never seen a good idea or business not receive funding.  In fact the best deals always get money in fact some get more pledged than what they need (which causes different problems). 

If you don’t receive funding it is for one of three reasons:

1. You did not present your idea or business to an investor group that has the right risk profile.  An example would be presenting a life sciences opportunity to me.  I know nothing about life sciences and so I do not invest in them.
2. You did not sell your idea.  Hard to hear but often is the case.  That is why you need a friend – a sponsor or someone that can help coach you on your pitch.
3. Your idea just is not good enough.

So what should you do?  Try to determine which of the three reasons caused you not to receive funding and correct it.  Don’t just hang your head and lay blame at the potential investors feet.  Also don’t go back to that same investor pool unless you have totally overhalled your idea.  It is a waste of time.  Fix It.  Change It.  Practice it.

Good ideas always get funded!