8 tips for successfully pitching an investor

Our friends at the Young Entrepreneurship Council asked eight entrepreneurs to share their top tips for pitching investors, based on their own success and failures. Here’s what they found:

Share your vision, not a product tour

It’s a rookie error for an entrepreneur to pitch an investor with the equivalent of a product tour. Investors are usually more interested in the big picture — your vision for your business, why they’ll be a good match, and how your company will return their money handsomely. If your slide deck or in-person presentation seems to linger too long on touring your site or demonstrating your product, it may convey that you don’t have a sense of the larger mission.

Spend less time on the nitty-gritty upfront; rather, capture the investor’s interest with your passion for the bigger picture. Once the investor has a sense of that, s/he can always ask you for a deep-dive into the product tour. And if they do, it likely means you’ve piqued their interest.

– Doreen Bloch | CEO / Founder, Poshly Inc.

Find the true believers

Investors will mostly say no. And contrary to what many entrepreneurs may think, it’s not your job to convince them why they’re wrong but, instead, to find investors that think you’re right. I’ve found that’s the hardest part, really — spending time speaking with investors who aren’t convinced can be a huge waste when, but at the end of the day, they aren’t likely to invest in something they’re not sure of to begin with. That’s their job.

Not heeding this has been my biggest mistake so far in fundraising and pitching — and eaten up time I could have been searching for true believers and advocates instead.

– Derek Flanzraich | CEO and Founder, Greatist

Win the battle at the beginning

When pitching to an investor, you’ve got to win the battle ahead of time. I think doing PR and branding work for your company in advance is important. Make sure that when someone Googles you, they see great results. Make sure you’ve built a relationship with one of the partners at the firm. The deal should already be close to being done before you pitch; the “partner meeting” is supposed to be a formality that allows the other partners to feel good about the deal and ask their questions. If you are talking to an individual investor make sure you have milestones that align with your financial projections. Anytime I’ve been able to inform an investor exactly how we plan to produce the projected revenue concisely and clearly, we’ve gotten the deal done.

– Raoul Davis | CEO, Ascendant Group

Know what an investor fears

The biggest thing an investor fears isn’t what you think it is. Investing in something that fails isn’t an investor’s biggest concern. The thing an investor truly fears most is missing out on something big. The surest way to land an investor is to convince her that your project is a big opportunity not to be missed out on. The best proof of your opportunity is social proof, specifically by having other respected investors on board. Once you find one eager investor, the rest are easy.

– Corbett Barr | Founder, Insanely Useful Media

Be cocky to seal the deal

My team and I are super nice people. We originally walked into investor meetings with a huge smile on our faces and a perfectly practiced pitch. Unfortunately, we found out that nice guys finish last. It wasn’t until we changed our approach that we finally closed our million-dollar round.

Instead of being friendly and nice, we acted cocky and brash, as if the investor was lucky to be meeting with us. Of course, we were still very respectful, but we stayed away from thanking them for the meeting or sounding too eager for their money. We successfully closed investor pitches when we mentally decided that we are the prize and that the investor needs to impress us in order to take the money.

– Jun Loayza | President, Ecommerce Rules

Communicate your milestones to build confidence

Potential investors want to know where their money is going and what their investment will help you to accomplish. Perhaps most importantly, they want some assurance that you will wisely use their money to hit milestones that will, in the future, allow you to raise additional money.

Instill your would-be investors with confidence by clearly connecting the dots between their investment and your business goals. Create a compelling narrative that shows that you will be able to accomplish X, Y, and Z with their money — which will most certainly guarantee future investments.

– David Ehrenberg | Chief Financial Officer, Early Growth Financial Services

Do your homework

The golden rule for meeting with investors is doing your homework. There are two things you absolutely need to know: which industries they invest in and what prior investments they’ve made. This is really the bare minimum; it’s also nice to know a bit about their personal and professional background: where they went to school, what they’ve been posting about on their blog, and what outside interests they have.

These things will help target the conversation and demonstrate that you’re a professional and have done your research. You need to show these people that you’re a capable and reliable recipient of their money, and solid preparation will help you jump out of the starting gate in good style.

– John Harthorne | Founder and CEO, MassChallenge

Do not talk valuation

Talking valuation during a pitch is shortsighted for an early-stage investor pitch, and just one of many components that will be discussed at a later stage of the investor discussion. Instead, focus on the team and the technology (you should actually show it to them). Clearly explain the stages of your startup and the reasons why you are requesting a certain dollar figure. Keep the dollar figure on target to a run-rate to achieve your goals through that stage.

– Carmen Benitez | Co-Founder and Managing Director, Fetch Plus

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

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Reading: Separating Gold from Streams

Buy John McPhee’s book, Coming into the Country, here

Wyman Fritsch, a conventional placer miner, has a nugget larger than his thumb. He found it in the Discover Fork of American Creek, some ten miles out of Eagle, and he says it is by no means the largest one he has taken from that stream. He has been mining there for fifty years. He was a boy when he came into the county. He is currently known as The Man with the Big Nugget. He showed it to me the other day, so that I could hold it in my hand and rub the genius of the gold. It was lumpy, pitted, pocked, rough, ugly—an apparent filling from the tooth of Sasquatch. The marvel of it—as the earth’s elements go—is that when Fritsch came to it with his mining equipment, scraping up the deep gravels of American Creek, it was there as nearly pure metal. Gold is not merely rare. It can be said to love itself. In the idiom of science, it is, with platinum, the noblest of the noble metals—those which resist combination with other elements. It wants to be free. In cool crust rock, it generally is free. At very high temperatures, however, it will go into compounds; and the gold that is among the magmatic fluids of interior earth may be combined, for example, with chlorine. Gold chloride is “modestly” soluble, and will dissolve in water that comes down and circulates in the magma. The water picks up many other elements, too: potassium, sodium, silicon. Heated, the solution rises into fissures in hard crust rock, where the cooling gold breaks away from the chlorine and—in sizes ranging from specks to the eggs of geese—falls out of the water as metal. Silicon precipitates, too, filling up the fissures and enveloping the gold with veins of silicon dioxide, which is quartz.

Gold can be taken from such veins with dynamite blasts, pneumatic drills. But that requires the funds and the efforts of a large corporation. The deepest mine in the Western Hemisphere—the Homestake gold mine, in Lead, South Dakota—goes down into the earth more than a mile and a half. Its capital cost to date has been upward of a billion dollars. Alaskan lone miners—people who have, or who have had, names like Pete the Pig, Pistolgrip Jim, Groundsluice Bill, Coolgardie Smith, Codfish Tom, Doc La Booze, the Evaporated Kid, Fisty McDonald, John the Baptist, Cheeseham Sam, The Man with the Big Nugget—prefer to wait for God to break open the rock, to lift up and expose something like the Sierra Nevada and with epochal weathers blast it and spall it and tear it apart until the gold rolls out into the rubble of the streams. Placer mining—separating gold from stream gravels—is difficult work, but beside any other method it is comparatively easy. “Placer,” in Spanish, mean “pleasure.”

Photo credit: Karl/Flickr

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Podcast: For WeWork’s Ben Kessler, ‘Our Product Is Community’

“When we talk about community,” says Ben Kessler, director of marketing for WeWork, “I always try to push the idea that our product is community. It is those connections. It is the fact that while it makes sense financially to start your company out of your apartment or out of a coffee shop, you’re missing out on a lot of opportunities by not being in a shared space.”

In a recent podcast published by TechnologyAdvice, Kessler talked with new media strategist Clark Buckner about the value of co-working spaces: how they spark creativity and offer on-the-spot resources for growing a business.

“A great example might be someone that’s a lawyer, who’s really looking to build out an app or build out their website or something like that,” says Kessler. “They can head out of their office or just pick their head up and look around to find someone that’s a web development shop, or a Rails developer, or something that’s going to help them. They can find a graphic designer. They can find someone to help them with their startup accounting.”

Kessler also talked about the importance of constantly sharing information, working in small groups for planning sessions, and getting the entire team together so that different departments can work together more effectively.

Listen to the entire podcast below. You can also subscribe to the TA Expert Interview Series in order to get alerts about new episodes.

Photo credit: Lauren Kallen

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The Generosity of Water

Long ago pilgrims would travel great distances to visit a holy spring, or to drink from a sacred well. But we don’t give much thought to springs nowadays. Water runs from our taps, or else we drink bottled ‘spring’ water’ available in shops. Our hands have forgotten how it feels to dip into clear sweet-tasting water. How often do we kneel on mossy banks to gaze at our reflection mirrored on the surface of a glistening pool of water? Not often.

Recently I accompanied a small group of meditation teachers from various traditions on a pilgrimage to Kyushu island in Japan. Kyushu still has wild parts. Looking out from the window of the mini van one could easily fantasize the form of a lone samurai emerging from the misty pine groves we passed or indigo-clad farmers working in the rice fields along the road. Water dripped off the cliffs. Escaping through rocks, it flowed and rushed down woodsy ravines to the roads that followed the curves and shapes of the landscape. Here, it was easy to accept that nature had been revered by the ancient Shinto tradition of Japan for more than three thousand years.

One of our stops was to be a sacred fountainhead, a hidden spring in the forest, off a main street of a small Japanese village. Before our group arrived at the spring we had become accustomed to beauty. We had paid homage at a Buddhist temple and Shinto shrine. We had seen farmsteads, look out points, walked a forest trail, delighted in a cave of thousands of tiny balanced rock cairns. We had stood at the edge of the famous Takachiho gorge, looking down upon a luminous river of liquid aquamarine meandering between rugged cliff-sides. None of these experiences, however, prepared us for the moment we knelt along the soft green bank of the Shirakawa water spring.

Nestled in a pine grove this bewitching pond was difficult to see at first as it reflected the pine trees around it. Like looking into a polished mirror, it confused our eyes. The trees around the pool stood as guardians with a loving protective gaze lest we intruders did not recognize the sanctity of what we were being shown. This was a nature temple and it was holy. The water was alive and the fragrant herbs and moss knew they were blessed to drink from this secret wonder.

The spring was not very deep and as one focused carefully looking closer one could see the tiny bubbles of water escaping the earth’s core through the sandy bottom. Under the smooth surface emerald like plants swayed in this crystal bath. Experienced travelers, none of our group had ever seen such clear water. Like children, we stood hushed, with eyes wide, as though we had seen a unicorn step through the trees.

The spring produces 60 tons of water per minute, the source of the Shirakawa river that that eventually makes its way to Kumamoto city. I wondered if the urban-dwellers realized they were drinking from an ancient oracle, that if we could hear it, would answer us with long-forgotten wisdom. It might say, “Drink and quench your thirst. It is a gift freely given. I ask nothing in return.”

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How Can a Wine Tasting Seem Cool? Make it a Massive Carnival

At first all Tyler Balliet wanted was to learn a little bit about wine. Now his interest has inspired him to create a platform that has, so far, reached thousands of his fellow wine enthusiasts.

Five years ago, the WeWork Hollywood member came up with the idea for Second Glass, a platform for people who were already interested in or wanted to learn more about wine. It started out as a magazine, and then grew into an app, podcast, and a gathering of wine sellers and drinkers at an event called Wine Riot.

“It’s a huge, massive wine carnival for four hours,” says Balliet.

Since 2010, Wine Riot—which takes place throughout the year in cities like Boston, New York City, Chicago, and Los Angeles—has attracted 85,000 attendees, half of which were in 2014 and 2015 alone.

At the event, attendees can log onto the Second Glass app and mark the 16 wines they tasted that day out of the 250 to 400 types available. According to Balliet, about 35 percent of attendees utilize the app, posting 275,000 reviews of wine.

Along with the actual wine drinking experience, Wine Riot events feature 20-minute seminars and experts at every booth explaining the products they’re selling.

“The app is really useful at Wine Riot,” he says. “The wine industry is very complicated.”

wineWith Second Glass and Wine Riot, Balliet aspires to educate people, mostly millennials, about wine. When he worked part-time at a wine shop in Boston, he saw that people his age were coming into his store and buying a lot of wine that they knew nothing about.

“I was trying to learn about wine then,” he says. “My only options were a 10-week college level class or a 900-page book, which I did end up reading. People are interested in wine, but they don’t want to make the effort.”

Aside from his first-hand experience with millennials, Balliet says millennials are buying more wine than the previous generations.

“It comes down to availability more than anything else,” he says. “Our grandparents drank cocktails because that’s what their parents drank during prohibition. When I went to college, wine was everywhere.”

Since many millennials haven’t turned 21 yet, Balliet wants to focus on this emerging market. In the future, he plans to go into retail stores and change the way that people shop for wine.

“Wine shops haven’t changed their look in 100 years,” he says. I would love to go in and update them for a new generation.”

Photo credit: Lauren Kallen

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