Here's the Pitch

How to Pitch Your Business to Anyone, Get Funded, and Win Clients

Martin Soorjoo

• Publisher: Wiley
• Year: 2012
• ISBN:
  9781118238844
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Advice for every pitch situation a modern day entrepreneur will encounter

Whether you're pitching for funding, the media, or to potential customers and partners, to survive and succeed as an entrepreneur, you have to know how to deliver a high-impact pitch. Here's the Pitch reveals powerful proven techniques to get your audience to take the action you want. You'll learn the same strategies and tactics that have been used by entrepreneurs to raise millions of dollars, secure partnerships, and win big sales contracts.

Here's the Pitch provides advice for every possible pitch situation, including virtual and Web 2.0 pitches. This book:

• Demonstrates proven, effective pitch techniques
• Offers step-by-step advice for preparing your pitch
• Helps you develop a confident, winning mind-set
• Examines a range of pitch scenarios entrepreneurs frequently encounter

Don't lose out on your next big sale, bid for exposure, or investment proposal for lack of skills. Here's the Pitch provides a complete toolkit that will enable you to deliver a confident, engaging, and successful pitch.

Part I

The Mechanics of Pitching

Chapter 1

The Power Dynamics of the Pitch

“Power is not only what you have but what the enemy thinks you have.”

—Saul Alinsky, Author of Rules for Radicals

The power dynamics of a pitch is one of the most important determinants of success yet is rarely discussed or acknowledged. In life, all parties to all relationships have some power. The relative strengths, equal or unequal, stable or unstable, are continually subject to change.

In a pitch scenario, the dynamics are typically stacked in favor of the party the entrepreneur is pitching. The entrepreneur believes that he or she needs the funding or contract more than the investor or potential client needs him or her. As a consequence, the entrepreneur will often feel and communicate neediness, or worse, desperation.

This inequality of power is compounded by the fact that the investor or executive, typically Alpha, feels more powerful. Alpha has status within the organization and financial security and is usually judging the pitch on his or her home territory. Once this dynamic is established and allowed to continue, the entrepreneur’s pitch is likely to fail or, at best, secure unfavorable terms. The good news is that you can take steps to increase your perceived and actual power.

Establish Favorable Dynamics at the Outset

On the basis that first impressions tend to set the scene, it’s critical that you are proactive in creating favorable power dynamics at the point of first contact. This is important because a part of the brain called the adaptive unconscious (also referred to as the reptilian or limbic brain) causes people to make key judgments about you within the first few seconds of contact, long before you’ve reached the day of your pitch.

Psychologist Timothy D. Wilson describes the important role of the adaptive unconscious in his book Strangers to Ourselves when he states:

The mind operates most efficiently by relegating a good deal of high-level, sophisticated thinking to the unconscious, just as a modern jetliner is able to fly on automatic pilot with little or no input from the human “conscious” pilot.

A study published in Nature Neuroscience took this understanding a stage further and concluded that our reptilian brain makes decisions before our conscious mind is aware of this. “Your decisions are strongly prepared by brain activity. By the time consciousness kicks in, most of the work has already been done,” said study coauthor John-Dylan Haynes, a Max Planck Institute neuroscientist. In other words, investors or executives may have subconsciously written you off before they even knew it.

How Initial Decisions Are Made

The problem of decisions and judgments being made within the first few seconds is compounded by the fact that people make decisions on emotion and then justify them with fact. Although we may like to think of ourselves, first and foremost, as rational, cognitive human beings, consistent research has proved otherwise.

This fact of life applies equally to everyone, including lawyers, investors, and executives. The primacy of emotion and instinct in decision making is reflected in everyday business decisions. People decide to work with, or invest in, people they like or have a good feeling about but will point to the person’s experience and qualifications as being the real reasons for doing so. People will buy from salespeople they like but then explain to family and friends that they really did need the purple Post-it storage box they just bought.

This isn’t to say that nonemotional factors such as experience, qualifications, market size, or financial projections are irrelevant to the ultimate decision-making process. They are indeed relevant and important, just secondary. Secondary in the sense that if you don’t start out by triggering the correct emotional responses in your audience, then even a strong business proposal, justified by hard data and numbers, will find itself pushing at a closed door.

Getting Past the Gatekeeper

Although many people are aware of the different roles of the left and right sides of the brain, few understand the differing roles of the reptilian brain and the new brain, which is the cerebral cortex. The reptilian brain is estimated to be between 300 million and 500 million years old, whereas the new brain is only 3 million to 4 million years old.

The primitive reptilian brain is where our emotions exist and is nonrational and nonreasoning. Its main purpose is our survival. By contrast, the new brain is the source of decision making and language. For the purposes of communicating and pitching, it’s critical to understand that our message is filtered by the reptilian brain gatekeeper before it is deemed suitable for consideration by the recipient’s new brain.

In How the Brain Works, Leslie A. Hart wrote, “Much evidence now indicates that the limbic area is the main switch in determining what sensory inputs will go to the neocortex and what decisions will be accepted from it.”

What This Means for Your Pitch

The implications of the scientific research on how we process information and make decisions are significant for pitching. Put simply, if you do not send the right messages to your audience’s reptilian brain at the earliest opportunity and continue to do so throughout your pitch, your chances of success are low. No matter how big your market or how solid your track record and financials, if you do not obtain reptilian brain approval, your message will not receive proper scrutiny by your audience’s analytical brain.

The findings from the various scientific studies are consistent with my own experience and observations of pitches and court trials. It’s always been clear to me that nonrational factors played an important part in the decision-making process, but it was only when I became familiar with the scientific research that I understood why.

Don’t Convey Neediness

At the beginning of this chapter, I explained why it was vital that you don’t come across as needy when pitching. There are two reasons for this. First, if someone appears desperate or needy, our reptilian brain becomes suspicious. Thoughts like, “Why does no one else want them?” or “How did they get into this desperate state?” will be generated. Alarm bells will start to ring, and your audience’s reptilian brains will warn their new brains to steer clear of you.

Second, we tend to want and value that which we can’t have or that which is difficult to obtain, and conversely we tend not to want or value that which is easy to get. This is a lesson many of us learned in high school—that frustrating problem of how the girl or boy you really wanted was always dating someone else or was just simply out of your reach.

Not long ago, I met with two friends who are seasoned angel investors (well connected, wealthy individuals who use their own money to invest). During dinner they discussed a Cloud services start-up pitch they had recently heard and were considering jointly investing in. What I found particularly interesting was the fact that their keenness to invest was significantly influenced by the knowledge that the founders of the start-up were in advanced discussions with other angel investors.

Now, although I am sure that neither of my friends would make an investment based solely on the fact that other investors were interested, it was equally clear to me that the fact that this start-up was being courted by other angels increased the chances of these founders being funded by my friends.

Be Desirable, Not Desperate

In Influence: The Psychology of Persuasion, Robert Cialdini, Regents’ Professor Emeritus of Psychology and Marketing at Arizona State University, looked at this behavior through the prism of the principle of scarcity. Cialdini concludes that people assign more value to opportunities when they are less available.

The use of this principle for profit can be seen in high-pressure sales techniques. Examples include only a “limited number” now available or a “deadline” for an offer. When something becomes less accessible, whether due to quantity or time restrictions, the freedom to have such an item may be lost. According to psychological reactance theory, people respond to the loss of freedom by wanting to have it more. The trusty reptilian brain, in its effort to protect, will take steps to ensure that opportunities and freedoms are not lost.

This means that when you’re pitching, it’s vital that at no stage should you come across as desperate or needy. You want your audience to want you, not believe that you desperately need them. Ideally, you want to be perceived as the hard-to-get prize that everyone else wants.

This becomes easier once you remind yourself that investors need to invest in companies to make money and companies need to buy products and services from the right suppliers in order to operate, grow, and remain profitable. In other words, your audience is meeting with you because they believe you may have something they need. Your task is to convince them that they are correct.

Putting This Into Practice

If you’re desperate for funding or a contract and feel you lack power in a relationship, your actions and words will convey this to the other party in a number of ways, including:

• Quickly agreeing to whatever time, date, and location the other party puts forward.
• Accepting whatever time the other party allows for the meeting; for example, you need 30 minutes to make your pitch and address FAQs but agree to the other party’s proposal of 15 minutes.
• According the other party greater status. The other party, whether a venture capitalist (VC) or ...