In yesterday’s edition of The Wall Street Journal, Ty McMahan offers four tips from venture capitalists for making a good pitch. This is a critical skill for entrepreneurs with promising start-ups to fund. It’s also central to the IR and PR programs we create for our clients. For clients seeking to impress investors in the current financial climate, it’s important to communicate effectively:
First impressions matter. Gimmicks don’t work. Investing revolves around money, so dress and conduct yourself professionally.
Be prepared. Know your audience and your markets down to the specifics. Come equipped with a solid business plan and a detailed but concise presentation that explains it. The presentation should clearly explain how your plan will make money for both you and the investors behind you.
“Modesty doesn’t pay,” to borrow a phrase from the WSJ article. If you have done or are doing something well, talk about it. For example, if you or another member of the management team has successfully developed and launched a biomedical product, make sure your audience is aware of that experience.
Be honest. When your potential investors ask tough questions about your business plan, give straight answers. Be realistic about the challenges you expect to face.
Keep on the radar. Follow up after the initial meeting. If you make advances toward the plan you pitched, let your audience know.
In tough economic times, venture capitalists are very careful about where they invest. A company that sticks to these tips has a better chance of being heard above the noise.