Investors are way overrated. Who needs them?As a proud dropout from the Founderitis Ten-Step Recovery Program, you realize that you are far better off without investors meddling in your business. However, other members of your Core Team are pressuring you to seek outside funding. No problem.
If you follow the tips outlined in this entry, you will be guaranteed to suffer absolutely no dilution, as there is zero chance that any reasonable investor will be compelled to purchase any of your equity. With a bit of effort, your pitch will cause the audience to walk away with no empathy for you, a vague, disinterested understanding of your adVenture’s value proposition and absolutely no desire to fork over their dough into your sweaty hands.
Bootstrapping may limit your adVenture’s ultimate chance of success, but at least you will never have to deal with pesky institutional investors.
Pop Quiz: What are the top five phobias?
As discussed in The Personal Pitch, the primary door-opener into the world of private equity has always been personal contacts. At one time, the written Business Plan was the chief communication tool to articulate the details of a prospective venture investment. However, the increased competition between Venture Capitalists and the decrease in cycle times between the emergence of discontinuous technologies have led to a de-emphasis on the importance of the written Business Plan and a greater focus on the Investor Pitch.
Answer: The top five phobias, from most feared to least feared, are as follows:
1) Public speaking
As such, one way to guarantee giving a terrible investor pitch is to do so while on brink of bankruptcy, dangling from a high building and wearing a beehive on your head immediately after learning that you have a terminal illness.
Given the importance of the Investor Pitch, it is not enough to simply craft a lousy Business Plan. For those unfortunate, fully solvent entrepreneurs who do not have a terminal illness nor access to a beehive, there is still hope. The horrendous investor pitch is within your grasp. Simply follow the tips outlined below.
Open with an Offensive Off-color Joke
The great thing about beginning your pitch in an awkward manner is that you can alienate the majority of your audience quickly, making the fact that you are unprepared (see next suggestion) much less relevant. If you do not turn the crowd against you from the outset, you run the risk of creating empathy. When investors view you in abstract, impersonal terms, you increase the likelihood that you will not have to deal with an intrusive, strong-willed, ROI-focused, outside Board of Directors.
In addition to being blatantly offensive, avoid establishing the proper context of your pitch at the outset of your talk. The less foreshadowing you provide the audience upfront, the more confused and disengaged they will become. Also, ignore the First Impression Rule, which dictates the relative importance of the following messaging modes: 55% (non verbal), 38% (tone of voice), 7% (verbal). The best way to botch the First Impression Rule is to speak in a nearly inaudible, flat, monotone voice accompanied by distracting and random facial expressions and hand gestures.
Wing It With Sonic Fillers
Would you study for a test, train for a marathon or memorize your lines for a play? Of course not. Such preparation would be a waste of time. You are an entrepreneur – go for it. If you need to fill any uncomfortable pauses, just utter brilliant sonic fillers, such as: “you know,” “like,” “ah,” “let’s see,” “as I was saying,” “you know what I’m saying,” “uh,” or the classic standby “ummm.” The “um” is especially versatile, as you can sustain it for as long as needed and thus effectively fill nearly any awkward silence.
Obscure How You Will Make Money
Throughout your presentation, emphasize fluff over substance. Liberally utilize video, graphics and other eye candy that distracts from your pitch and is irrelevant to your overall adVenture’s value proposition. If you are forced to display financial data, ensure that the slides are unintelligible. To further obscure how you will earn a return on the investors’ money, verbally stumble through the description of your financial forecast and make it clear that you only have a cursory understanding of the assumptions underlying your business model.
To further weaken your credibility, speak in the future tense as frequently as possible. This will make your adVenture seem less real and more intangible (e.g., we will eventually complete our development, once we begin shipping product, etc.). Avoid specifying concrete action steps by keeping your comments vague and circumspect. The more generic and jargon-laden your remarks, the greater the extent to which you will be perceived as an insubstantial and ineffective dolt.
Do Not Put Yourself in Your Audience’s Shoes
OK, you know that most professional investors listen to hundreds of pitches each year. So what? In order to deliver a particularly terrible fundraising presentation, disregard the fact that your audience is likely highly sophisticated and somewhat jaded. Make it clear you do not know their investment focus (e.g., early-stage, late-stage, market-sector focuses, etc.) nor did you take the time to research the investors’ respective investment portfolios.
One way to unequivocally convey that you did not take the time to understand your audience’s frame-of-reference is to tell them things you are certain they already know. For instance, emphasize basic market issues that are familiar to even the most casual observer of your adVenture’s space.
Another tactic that will effectively demonstrate your complete lack of self-awareness is to disrespect your audience’s time constraints. If one of your audience members tries to speed you along, consider this an overt challenge to your ability to give a decidedly poor presentation. Slow the cadence of your pitch to a crawl. Also, consider utilizing irrelevant tangents and frequent repetition to further lengthen the grueling duration of your remarks.
Death by PowerPoint
An effective method to incite Death By PowerPoint is to deploy an extraordinary number of slides. A minimum of 8 to 10 slides per minute is a reasonable rule of thumb. In addition to relying on an enormous slide deck, you can accentuate Death By PowerPoint in a number of ways:
- Hide behind a podium
- Avoid eye contact with your audience
- Turn your back to the audience and read each slide verbatim from the screen
- Limit the use of pictures or graphs on your slides
- Utilize extremely small fonts so you can maximize the amount of text per slide
- Select a complicated, distracting background that will compete with the content of the slides
Nothing more effectively conveys the sentiment, “I do not respect you. As such, I did not spend the time necessary to ensure that your time evaluating my presentation is well-spent” more than an explicit apology for being unprepared. You should also interlace your remarks throughout your presentation with apologies for: your slides, your disheveled appearance, starting the presentation late, running over your allotted time, etc. Such apologetic remarks will incrementally help to further erode your credibility.
You can also interject subtle, apologetic language into your pitch, such as: “sort of,” “pretty much,” “kind of,” etc. These qualifiers will denude the impact of your comments and reinforce your lack of self-confidence.
Q&A can often make the difference between a mediocre and a compelling bad presentation. This is an opportunity for you to shine. Irrespective of a question’s validity, approach each with an overt air of disdain. Never admit that you do not know something. If you are unsure of a factual response, make up a fictitious one. Investors are looking for someone who can think on their feet, so show them how you can spin a tall tale in real time.
In addition playing loose with the facts, be defensive and argumentative if a question is too pointed. If the questioner persists with a follow-up question, provide a rambling, semi-coherent response. If you speak long enough, you can be assured that you will squelch any additional questions.
Except as noted below, avoid preparing for Q&A. Do not anticipate questions or think through your responses in advance. You are winging it, remember? This includes Q&A. With that said, there are a few areas in which a practiced response will serve you well.
- If asked about the future growth of your management team, make it clear that you and the rest of the team are capable of leading your adVenture all the way through its IPO and beyond. Leave no doubt in the investors’ minds that there is no need to add ANYONE to your team. Consider reviewing Founderitis – A Ten-Step Recovery Program for related themes you can weave into your pitch.
- If asked about your adVenture’s exit, make it clear that you will refuse to accept anything less than $500 million. You should also state that you expect to be in a position to cash-out and move onto your next venture within the next 10 to 12 months.
- If asked about your “Plan B,” sarcastically ask the inquisitive party what they plan to do when their portfolio goes into the red, which is clearly what will happen if they do not invest in your adVenture.
Do Not Follow Up
Once the presentation is over, forget about it. If a potential investor asks a question that requires additional research, blow it off. In addition, do not bother tracking down the investors to solicit their feedback after the pitch. If they really want to invest, they will seek you out. You are far too busy for such Tomfoolery. Besides, such follow-up might inadvertently result in ongoing investor interest.
Cocktail Hour Infamy
If you follow these tips, you will be assured to deliver a horrendous investor pitch. If you are diligent, the investors will remember your pitch for years and will liven up many a cocktail party with anecdotes from your talk. Differentiation is a good thing, so relish the notoriety that these tips will help you achieve and rest assured that you will never be saddled with troublesome investors.
We have all been there. Please share the most egregious Death By PowerPoint moments you have experienced and what the speaker could have done to alleviate your pain.