Talk Like An 8th Grader When Pitching Investors

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Photo courtesy of Santa Barbara Independent’s recent Techtopia Issue

A version of this article previously appeared in Forbes.

Serial entrepreneurs agree that it is best to communicate with investors on an eighth grade level. To illustrate this point, former DoubleClick Founder and current CEO of Graphiq Kevin O’Connor often begins his talks to entrepreneurial students by asking the following question.

Select the real software product from this list.

A. Assimilated, zero-administration, standard database-queuing schema

B. Open-architected, workforce-neutral, productivity assimilator

C. Modularly reduced Graphical User Interface heuristic

D. Profit-focused, fault-tolerant encoding interface

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“The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.” - George Orwell, British Author

The correct answer is… none of the above. All of these “products” were created with a few clicks of a buzzword generator.

As Kevin points out, “Your prospects are busy people and they don’t care about the innards of your product. They care about finding solutions to their problems.” In the same vein, most investors are too busy to decipher obtuse buzzwords. If your pitch deck cannot be comprehended by an eighth grader, it’s probably won’t be read by the typical investor.

Effective corporate communications are not just applicable to investors. You must also place yourself in the shoes of other uniformed and indifferent stakeholders, including: customers, partners and suppliers. Do this by crisply explaining how you will resolve each of these constituents differing problems, and not bore them with the inner workings of your technology. People care about salving their pain, not the origin, design and composition of the painkiller.

Stephen King Startup Tip

In describing effective writing, the best-selling author Stephen King notes that, “Any word you have to hunt for in a thesaurus is the wrong word.” In business, if your audience focuses on your words, instead of your message, you are using the wrong words.

Worried that short, simple words will sound condescending? Don’t be.

According to the National Adult Literacy Survey, “The average adult reads at the 9th-grade level. This accounts for the fact that the popular blockbuster novels are written at the 7th grade level. People like to read recreationally two grades below their actual reading skill.” Not surprisingly, newspapers’ reading levels range from ninth to twelve grade, with the New York Times comprehensible by the typical High School sophomore.

There’s no question that they average stakeholder can comprehend language above a seventh grade level, but since most of our daily communications are in the Junior High reading range, text significantly more complex quickly becomes burdensome.

Still not convinced? In his book Fiction Writer’s Brainstormer, James V. Smith applied the Flesch-Kincaid Readability Test to the writing of ten best-selling novelists. Smith determined that the average grade level of their collective prose was 4.4 (i.e., the fourth month of the fourth grade) and that the average number of characters per word was 4.15.

If you are unsure how your corporate communications stack up against these mass-market benchmarks, run your text through the following Flesch-Kincaid Readability formulas.

Readability Test

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Grade Level Test

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Your college English Composition Professors be damned, literary flourishes written at an elevated reading level may alienate potential investors and customers.

By the way - I assessed a few random paragraphs from this entry via the Flesch-Kincaid test and it clocks in at a grade 12 reading level! I clearly have some work to do if I am to obtain parity with the New York Times.

Follow John’s startup-oriented Twitter feed here: @johngreathouse.

Image: Santa Barbara Independent, all rights reserved

 

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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