How to Pitch Investors and Win #2 - Be a Pitch Master
Alex Rappaport had the novel idea of using hip-hop songs as educational tools, with lyrics that actually communicated educational material to listeners. But he needed funding and wasn't getting traction from investors. At a going away party at a bar one evening, Rappaport just starting pitching everyone on his idea. People laughed or wished him well, but that was it; until a Columbia Business School graduate heard the pitch and wanted in. He helped Rappaport craft a formal investor pitch, entered it in a local pitch contest and walked away with the grand prize of $5,000 and connection to a host of investors, some of whom eventually funded "Flocabulary," which is now used by more than 20,000 students.
That kind of magic can happen for you, too. You can be a Pitch Master. And you can dramatically increase the chances of striking it big early in the funding game if you learn and master the secrets to breaking the investor trust barrier in the first few minutes while pitching or meeting. Instead of pitching being a grueling, nerve-wracking experience, you can actually embrace the adventure and have tremendous confidence -- and along with that confidence, a desire to pitch to those high net worth people that you might be fearful of approaching right now.
You're a visionary leader, with a great business idea and a team you are confident can make things happen. But, as we discussed in a previous blog, How Investors See You, you've got that invisible trust barrier to overcome with investors, because they initially see you as a high risk. They don't know you yet and they can't be sure that you and your team can execute on your vision (Do Investors Fund People or Ideas). And for your part, you're probably not even sure exactly what to say, what to focus on and what to avoid doing or saying when you do get that first meeting. If you've been following this blog for a while, you know that trust comes first: you have to push the trust button before you push the greed button with investors.
But if you've read through our series on trust and on standing out from the crowd with investors, you'll notice a nuance: much of what I have related to you in those posts involves how to deepen trust. It's vitally important! But, before you can deepen trust you must establish trust. That is another ballgame. In the coming posts, I'm going to teach you how to establish trust and then rapport in the first few minutes of a pitch or a meeting. This is the secret to unlock the door to follow-up meetings, having investors bring their own networks to you, getting investors to want to spend their valuable time and stake their valuable reputation on you and, ultimately, to write checks.
Let me remind you that I gave you a primer on how to structure a pitch in our popular blog Elevator Pitch for Investors (How to Charm a Stone) or a first meeting in such a way as to break down the initial trust barrier. In that post, I suggested using the CPR tool -- context, purpose and results, to structure your pitch or talk in a way that is specifically designed for your audience, is memorable and repeatable (for both you and those hearing it) and that is simple and authentic. That process really works and I encourage you to review the post on this. As we push ahead here, I'll then deepen your understanding of how the science of the brain can empower you to get your message through to anyone and be deeply listened to.
I can now disclose specific methods for smashing through the trust barrier and then gain the genuine attention of investors in the first few minutes of a pitch. This information is available in greater detail in the amazing book Pitch Anything by Oren Klaff. This book is a masterpiece (in my humble opinion). He introduces it like this:
"There is a fundamental disconnect between the way we pitch anything and the way it is received by our audience. As a result, at the crucial moment, when it is most important to be convincing, nine out of ten times we are not. Our most important messages have a surprisingly low chance of getting through. You need to understand why this disconnect occurs in order to overcome it, succeed, and profit. This book tells you how." (1)
Hear those words: "Our most important messages have a surprisingly low chance of getting through." No wonder it takes 100 meetings with wealthy investors for most innovators to get one check (on the average.) Let's change this story. Now.
Oren states, "We don’t pitch well because there is an evolutionary flaw in our brain—a wiring kluge in our hardware—that we must understand and learn to deal with if we are ever going to pitch successfully."
Here is what you need to know, paraphrasing from Pitch Anything: there are three levels to the human brain, each with its own function, and you have to gain acceptance to each in order to progress to the next. Each level presents a psychological barrier that you (and your pitch) must overcome in order to gain access to the next. Unless you can pass through these levels of the brain in the first few minutes, and continuously keep passing through them, you're not going to succeed. Sounds like a daunting task, right?
It is, but if you know how to do that, wouldn't that be a tremendous advantage?
Of course! And I am an investor so what you're getting here is the keys to the kingdom.
So let me begin to teach you the path through this wilderness.
When you first meet your potential investor you're not really speaking to the rational (human) part of their brain. You're speaking rationally, but not being received by a rational mind, yet. You are instead initially speaking to the "crocodile" brain and then, if the crocodile brain lets you through, you then are speaking to the midbrain (which I un-technically call the "dog" brain). The croc brain is concerned with simple decisions: is this person speaking a threat to me or a not (someone to fight, flee or eat vs someone to befriend, team up with or mate with).
IF you're accepted as a non-threat and if you're interesting, you then meet the investor's dog brain. The dog brain is concerned mostly with "social relationships" - i.e. do you, the pitch-master, fit-in? Are you socially acceptable? Most important: Are you powerful and in control of the situation? If the dog-brain approves, then, finally, you're given access to the rational brain (neocortex) and the investor will begin to actually listen.
Oren concludes: "Our thought process exactly matches our evolution: First, survival. Then, social relationships. Finally, problem-solving."
You cannot, must not, short-cut this process.
So how do you get through this chain of brains? Fortunately, it's not that hard, if you pay attention. So pay attention now.
In Oren's words: "If you got a chance to look at the croc brain’s filtering instructions, it would look something like this:
1. If it’s not dangerous, ignore it.
2. If it’s not new and exciting, ignore it.
3. If it is new, summarize it as quickly as possible—and forget about the details. And finally there is this specific instruction:
4. Do not send anything up to the neocortex for problem-solving unless you have a situation that is really unexpected and out of the ordinary.
These are the basic operating policies and procedures of our brains. No wonder pitching is so difficult."
Here's the intriguing part: Virtually every slide in your pitch deck has to pass the croc brain's filters. So you have to keep the information continuously new, exciting, brief, and unexpected all along the way. (You get a chance to be detailed and analytical later.)
Think of a best-selling thriller (movie or novel). They are page-turners. Virtually every page or every scene leaves you with a cliff-hanger, and you want more.
Then just to make it more interesting, when it comes to pitching -- your messages have to pass the dog brain filter too -- that is, you have to be socially acceptable, which in this context boils down to "socially powerful." This is because you're going to ask for a decision. Oren spends the better part of Pitch Anything showing you how to do this, how to maintain social control during the pitch. This is NOT about being loud or arrogant. It's more subtle than that. We're going to cover that in a coming blog post, so stay tuned.
Key takeaway: There is magic in great pitching; you can be a pitch-master. You have to understand that most of your message is filtered by primitive parts of the brain first, and these parts of the brain require that your messaging continuously be "new, exciting, unexpected." At the same time, you have to maintain social control over the room and the listener (no matter how high-status he/she is.) This is all covered in greater detail in Oren Klaff's intriguing Pitch Anything.
Reference: (1) Klaff, Oren. Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal (Business Skills and Development) (p. 1). McGraw-Hill Education. Kindle Edition.