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Crafting Your Sales Pitch

As daunting as creating your business plan may have seemed, drafting your sales pitch can be equally as challenging. However, by utilizing Biz Plan Review to craft an effective business plan, you possess a trump card in this endeavor. This document serves as a tremendous roadmap for your sales pitch.


Rules of the Road

In most instances you will only be afforded 10 to 15 minutes to state your case, so focus on the highlights and skip excessive details. Our general recommendation for pitch book length is one-half the number of pages of the business plan (excluding the appendix), +/- 2 pages. The prose should be clear, concise, and direct without harboring any complete sentences. Accordingly, no periods or explanation points should appear in your pitch – EVER.

As is the case with your business plan, grammar, spelling, and punctuation are critical elements in creating a professional appearance.  Contractions (isn’t, don’t, can’t, doesn’t) have no place in technical business writing and should never appear in a pitch book.

As noted in our narrative, Common Reasons Business Plans Get Rejected, you want investors to focus on your concept, not be distracted by formatting issues. Therefore, we recommend utilizing easy to read sans-serif typefaces such as Arial, Helvetica, Futura, Verdana, and Calibri. Frequently changing fonts can be distracting, annoying, and take away from your message. Unless it is an interactive presentation where the item being discussed is highlighted, avoid using multiple font colors at all costs.


Less is Sometimes More

The title page of your sales pitch is likely the easiest to create as it is merely the cover page from your business plan. It should include the company name (in larger font), logo (if any), a motto or tagline (if one has been chosen), contact information of the principal, and the date at the bottom. For the date, we recommend going with just the month and year because meetings can often be postponed a few days. This construct decreases the likelihood of having to recreate or rebuild pitch books for the meeting.

For a pitch book, we endorse no more than 6 bullet points per page (5 is better) and no clip-art, cartoon characters, animations, or emoticons. Graphs that illustrate trends and/or tables that summarize financials are encouraged and follow the general edict of “a picture being worth a thousand words.”

There are numerous ways to arrive at the bullet points involved with a sales pitch, and no single method is better than another. One approach is to integrate the key elements from each section of the business plan. If done properly, this should capture most of the thoughts presented within the Executive Summary.

If you follow the general direction of a proper business plan, it should tell a story that culminates in the financial need or ask. The same flow follows suit for the sales pitch.

We recommend setting aside a few pages of the pitch book to review the financials. A full set of pro forma financials is not necessary for your pitch. Charts, graphs, or tables with financial highlights are all that is required. To this end, we encourage liberal use of white space. Any visuals should be elegant, easy to read, and not be stretched out from one corner of the page to the other.

A word of caution: be aware of the fonts when utilizing charts, graphs, and tables that are copied from one application to the next. As noted earlier, changing fonts within a presentation can be distracting, annoying, and take away from the message. Moreover, it points to a lack of focus and attention to detail – not an idea you want to convey.

Recommendation: we advocate that the final page of your pitch book incorporate a single word: “Questions?”


Preparing for the Moment of Truth

While a business plan was the opportunity to divulge every single aspect of the opportunity, a sales pitch is a far more focused affair. Think of it as a test in which you will likely get just one shot to put it all together.

After you receive notice of an investor meeting, you will want to know who the other meeting participants will be. Our advice is to spend a little time to research the people you will be meeting with. Learn what you can about their backgrounds and areas of emphasis as it may lead to some specific lines of questioning during the presentation.

Once you know how many people will be in the presentation, we recommend practicing your sales pitch in a conference room (or similar) and mimic the surroundings to the best of your ability. To the extent it is practical, we advocate practicing in front of a video camera. This exercise is beneficial in eliminating any tendencies that might be distracting to your audience.


Game Day

We cannot underscore the following point enough: unless someone in the meeting worked in an organization similar to yours, it is highly probable that no one in the meeting understands your business as well as you. You are the authority and the definitive subject matter expert. As such, it is critical to read the audience while delivering your pitch. If one or more attendees appears confused during the presentation, it is best to pause to ask, “does anyone have any questions?” rather than singling someone out.

Be assertive in your delivery and be confident in the reasons your business concept will be successful. Do not be afraid to express the passion you have for your business, but beware of coming off as being overly emotional, arrogant, or cocky. These traits are generally not received well within the investment community.


Prepare for Multiple Questions

Depending on the structure and formality of the proceedings, questions may be held until the end or taken as asked. Holding all questions to the end is much better for the flow of the presentation and the delivery will be most similar to the manner in which you practiced. Answering questions during the pitch may interrupt the flow, but it can make for more of an informal, conversational event that can put everyone at ease. We have witnessed both meeting formats over the years and neither one is more effective than another.

If the presentation is more formal in nature and questions are held until the end, there is a natural transition that needs to occur. It is often best to segue to the Q&A with a slide (noted earlier in this narrative) and a simple statement such as, “thank you for your time and attention today. What I’d like to do now is open it up to some (more) questions.” If no one asks questions immediately, you want to employ an often-used strategy and query yourself to get the ball rolling. We recommend reviewing the actionable responses you drafted within the Risk Factors section of your business plan as a natural extension here.

You should expect to receive a few unusual questions during or after the presentation. Sometimes the questions are valid, other times they are geared towards seeing how you deal with abnormal circumstances. Either way, just remember you are the subject matter expert. Similar to writing the Risk Factors section of the business plan (reference our narrative, Identifying and Responding to Business Risks), you need to be able to turn negative sounding questions into positive answers and outcomes. At the end of the day, most of the people in the room simply want to extract the information necessary for them to arrive at an investment decision.


Next Steps

If the investor(s) you meet with ultimately decide to pass on your idea, ask for any feedback that might be helpful going forward. As noted in our missive, Dealing with No, Getting to Yes, this not only demonstrates your business maturity, desire to learn, and dedication to seeing your vision fulfilled, but could serve you in the long-run. Even though a business idea may be wrong for one investor, it does not mean that it is unsuitable for all. The world of private equity and venture investing is small; its principal actors communicate with one another. Accordingly, they may either provide a recommendation for you, or simply offer some advice on what could be different/better. Either way, you come out ahead.

If you have ever seen the TV show, Shark Tank, you will notice that the terms they offer are rarely in line with what the business owners want. Part of this is attributable to the natural tendency for entrepreneurs to value their business much higher than the market or what is deemed to be reasonable. Other times the “sharks” are providing low-ball offers to gauge interest and determine if they are able to invest in a particular opportunity for less than the perceived market value. Within the world of private equity, any negotiation between parties involves two principals: one constituent prices the opportunity high, the other values it low, and the market lies somewhere in the middle.

The lesson here is that you should be prepared for terms that might be lower than what you believe your business is worth. This is where the art of negotiation comes into play. Be prepared with a contingency or a counter-offer if the terms are not what you desire. Be flexible, but firm, and realize that the person on the other end of the discussion is interested, at some level, in investing in your business.