Pitch and Win #4 - Become the "Investor Whisperer" (Part 2)
First, let me tell you the reason I am writing article after article. I want YOU and your team to be the prize, the one that investors choose to fund. I want you to look like the happy people in the picture, to be celebrating your win. Read on with that in mind.
I may have left you with the false impression in my last post, Become The "Investor Whisperer", that to "be the prize" in the eyes of your investor requires that you dazzle them with your brilliant idea, passion, business model, and plan. Having some level of brilliance, creativity, market awareness and understanding of how your business scales are all important. Being passionate about what you do is a wonderful way to invite an investor to consider whether they share that passion. But ...
Those aren't the things that give you the upper hand with investors during the pitch. In fact, usually just the opposite will occur: focusing on your plan in too great detail moves them into analytical mode and gives them fodder for steering the conversation into a place where they're critiquing (or downright criticizing) you and your plan. After all, they've got the money, success, and experience. They know best and they can't wait to let you know it. Focusing too much on your passion might create a social bond if they share the passion. But, sadly, even if they share your passion, but think you can't execute on your ideas, you're not going to be seen as the prize.
So just to be clear: focusing your pitch around your brilliant idea, your passion for it or your great plan is NOT what I'm advocating. That will simply derail you as the investor gets into analysis mode and looks across the table at you and sees a dreamer, a risk, someone who probably can't execute his plan.
Remember that our grand overall context for months in this blog has been evoking that priceless thing: trust. Recall that an important element of trust among investors is whether you're competent and can execute on your plan. Finally, remember that at the outset they have little or no trust in you. They see you as a potentially a dreamer or even a fraud.
Bringing things back to our current conversation, when they don't trust you, you haven't yet gotten through the fight-or-flight part of the brain -- that old croc brain. Remember that you've got to get it's OK, then the OK of the dog brain -- the one that is wondering whether or not you're worth a relationship with and if so, what kind of relationship. If you haven't read my post about this process, please do so now, it's going to be indispensable for you! If you get an OK from the dog brain, THEN you're dealing with the frontal cortex and you can have a straight conversation and even get into some of that analytical material -- because you'll be doing that from a place of far higher trust.
OK so how to navigate the dog brain (without reactivating the croc brain) in your pitch?
Before I answer that question, just a "heads up" to all the execution masters and other team members out there who read this blog. I realize that a lot of the focus in these posts is for the vision masters. But sometimes it's not the vision master who is pitching in a particular case. So listen up other team members, especially you execution masters, because what I'm about to share can make a huge difference for you, too -- and at a critical time when you most need it. And remember that it's often when you most need to be convincing, as Oren Klaff so brilliantly points out, that you're often least able to do so.
As I have been saying for months now in this blog, what makes you "the prize" is that you, unlike other entrepreneurs pitching investors, can be trusted as the captain of your business ship - that you can carry out your plan, that you can perform, that you can execute. That's why we spent several weeks helping you master demonstrating that capability in the "How to Make Investors Sit Up And Notice" series.
So that's job #1 when you pitch. You're not just the man or woman with the plan, you're the one who can carry it out successfully.
OK, so how do you prove that without focusing too much on the plan details, which you now know could just end up derailing the conversation?
You tell a story. And you tell it at the right time.
I just love the movie "La La Land." My favorite scene is when Mia (played by Emma Stone) the down-and-out actress hopeful who has all but given up ever being cast in a major role, agrees to go to one last casting call. If you've seen the film you know what happens. If you haven't, I hate to spoil it for you, but . . .
She tells a story. It's poignant. It's personal. It's meaningful and gives the casting director a deep insight as to who this woman is, where she came from, what she is connected to and why she's right for the part.
Her story, not her looks, her resume, nor her acting talent nor her connections is what blows them away.
And she tells it at the perfect time when the whole thing is about to go down the drain like all her other casting calls.
That's what I want you to do when, inevitably, your pitch starts to go off the rails because the investor, who is in a tugging match with you for dominance of the meeting, starts to get into analytical mode.
Here's what to do and how to do it, with the help of the master of pitching effectively, Oren Klaff, when the investor starts to drag you into analysis mode:
"Do not let your audience go there—keep audience members focused on the relationship they are building with you. Your intrigue story breaks this analyst rule set in an entertaining way and replaces analytical thinking with narrative discourse." Pitch Anything: An Innovative Method for Presenting, Persuading, and Winning the Deal (Business Skills and Development) (p. 60). McGraw-Hill Education. Kindle Edition.
You have to have the gumption to drag the conversation back to where you want it to be -- where you are going to be seen as the prize. You do it by having the courage to NOT answer the analytical question or criticism, but shifting the frame from analysis to relationship-building, with you as a prize relationship the investor wants to pursue.
To accomplish this you, like Mia, have to tell a story. But not just any story. Klaff provides seven key elements to the story you need to deliver at the crucial moment:
1. It must be brief, and the subject must be relevant to your pitch.
2. You need to be at the center of the story.
3. There should be risk, danger, and uncertainty.
4. There should be time pressure—a clock is ticking somewhere, and there are ominous consequences if action is not taken quickly.
5. There should be tension—you are trying to do something but are being blocked by some force.
6. There should be serious consequences—failure will not be pretty.
7. Leave a cliff-hanger that you don't reveal the outcome of until the end of the pitch
A good story for investors is a story about how you as a business leader were faced with a business crisis and how you got out of it. This sets you up as a leader that can perform under pressure, exactly what you want them to remember. This may be the only part of the presentation they remember, and that's ok. You've achieved two goals here:
- Broken out of the analytical context, returning the focus to "Should we be in business together?" and
- Left the impression that you are in fact "the prize" -- an innovator who can be trusted to perform.
In the last post in this series, I'm going to walk you through these seven steps and help you develop the story that you're inevitably going to need. Deliver it well and at the right time and you'll be seen as the prize.
Key Takeaway: Don't focus your pitch around your brilliance, your passion, your plan or your model in too much detail. You'll end up talking about those things at some point. Focus your pitch on building trust by showing that you are the man or woman who can take the plan home successfully. That gets you past the croc and dog brains and into the frontal cortex where you can have a great chat. When you feel derailed by the investor, tug the conversation back to where you're the prize by telling a great story about your leadership in crisis at just the right time. Get the focus back on you as the prize they want.