After appearing in three seasons of Dragon's Eye, I'm frequently asked what advice I would give to entrepreneurs seeking financing for their project. My answer is quite simple: learn how to make a good sales pitch that speaks to investors.s.
It is fundamental to differentiate the sales pitch that we make to a client to sell our product to that which we present to a potential investor to finance our project.
In front of an investor, it is your business that you are selling. You have to convince him that with you, and your product, he will make so much money, that it is worth listening to you. What an investor wants to know is that your product cost you, say, $ 3 to produce, that you sell it for $ 80, and that you sell 150,000 units per year. And thanks to its financing, you will double or triple your market share. Your investor now understands that he will make money with you. And precisely with you, because he invests in the person, the entrepreneur that you are first.
However, the majority of entrepreneurs all make the same mistake: they emphasize the merits of the product from the start. Whether your product smells good, tastes good, is unique, what the investor needs first. to hear to embark on your project is that it is profitable. That it will pay off for him to invest with you.
You need to turn on your investor first and then give them time to ask you questions. If he doesn't ask, then he's not interested enough. After piquing their curiosity on the investment side, you can talk about your product. The break you create is the defining moment of the pitch and it should come within the first five minutes. Get him to ask you questions, whether it's about the margin, the product, the profits you make, the valuation of the company, etc.
You wouldn't go to a bar to seduce someone by talking to them about you for an hour without asking them questions, would you? It's the same with the investor: you have to be interested in him, know his interests and his motivations for wanting to invest in your project. You must arrive prepared. We are looking to create a long-term business relationship with him..
If we recap the steps, we must therefore: 1. Tell him how much money he will make, 2. Tell him about the product, and 3. Take an interest in him by getting him to ask you questions. And the worst blunder to make would be to tackle it all for an hour without interruption, then you would just lose your investor.
You have to convince your customer that your product is the best in the world and that they absolutely have to buy it, and redeem it. You have to sell him your story, your passion for your product, and create a relationship with him too. It is understood that we do not talk about profitability to the customer, at the risk of feeling exploited. What he wants to know is if he gets his money's worth for the quality of the product, but most of all for the service, the experience you give him. Price takes on a whole new meaning when the customer knows the story behind the creation of the product they are buying, from those who cultivated the raw materials, to those who built the business 50 years ago. In addition, I advise business leaders to never abandon sales and focus only on administration. You are the best ambassador for the company, it is your story that people buy.
Ultimately, the art of pitching is the art of listening.