Grab their Hearts and the Rest will Follow!

Hi

I’ve been talking to Bill Reichert from Garage Technology Ventures in Silicon Valley. He and Guy Kawasaki invest in technology based businesses.

He made a very interesting point about what you need to do when pitching to investors and I quote:
“The reality is that raising venture capital is about getting investors to fall in love with your vision. As with any other pitch in your life, getting investors to do something for you is first about emotion, and then about logic. Investors are driven by their hearts and their guts, as well as their heads. First you have to appeal to their emotional and intuitive sides, and stimulate their enthusiasm, then you can work on their logical/analytic sides. Model your early communications with investors more along the lines of a movie trailer than an academic abstract.”

Bill Reichert, Managing Director, Garage Technology Ventures

It’s interesting that Bill stresses the need to capture their emotions, in other words, ENGAGE. There have been endless studies on how we human beings make decisions and a common theme that keeps emerging in that we make decisions based on our emotions and we then back up that decision with logic.

Fascinating, isn’t it?

And this applies to investors as well. I’ve seen it hundreds of times.

I was working with a group of 17 companies that were pitching over 2 days.

The investors and I were working through the plans submitted as part of the pitching process. The idea was to rank the companies. That way we came up with a ’short list’. There was one company in particular that was ranked in 14th place - not of much interest and not likely to get funded.

And then the team pitched!

It was just amazing. You should have seen it. What a performance. They brought a new perspective to the investment opportunity. And the investors loved it. They ENGAGED big time. At the end of the 2 days there were 3 investors who had set up meetings - all keen to get into due diligence.

The power of an engaging pitch should never be underestimated. You can reverse your fortunes and be meeting with investors even if your plan does not quite stack up. Mind you, these guys had a plan that got them into the boardroom so it was OK. Their plan just didn’t stack up well against the other companies pitching.

The pitch is the single most important activity in the capital raising process. Work hard at it. Make it great.

Cheers