After having participated in three seasons of the show In the Eye of the Dragon, I am frequently asked what advice I would give to entrepreneurs who are seeking funding for their project. My answer is simple: learn to make a good "pitch" of sales that is for investors.
It is fundamental to differentiate the sales pitch that we make to a customer to sell our product to the one we present to a potential investor to finance our project.
In front of an investor, it is your business that you sell. You must convince him that with you, and your product, it will make so much money, that it is worth listening to you. What the investor wants to know is that your product cost you, for example, 3 $ to produce, that you sell 80 $ and that you sell 150 000 units a 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 it invests in the person, the entrepreneur that you are first.
But the majority of entrepreneurs all make the same mistake: they emphasize the merits of the product at the outset. That your product feels 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 be a paying blow for him to invest with you.
You have to turn on your investor first, then give him time to ask questions. If he does not ask, he is not interested enough. After having piqued his curiosity on the investment side, you can talk about your product. The break that you will create is the defining moment of the pitch and it must come in the first five minutes. Bring him to ask you questions about the margin, the product, the profits you make, the valuation of the company, and so on.
You would not go to a bar to seduce someone by telling him about yourself for an hour without asking him questions, would you? It's the same for the investor: you have to be interested in him, know his interests and motivations to want to invest in your project. You must arrive prepared. We seek to create a long-term business relationship with him.
If we summarize the steps, we must: 1. Tell him how much money he will make, 2. Tell him about the product, and 3. Take an interest in him by asking him to ask you questions. And the worst thing to do would be to tackle all this for an hour without interruption, there you would come to lose your investor.
Your customer must convince him that your product is the best in the world and that he must buy it and buy it back. You must 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 client, the risk that he feels exploited. What he wants to know is if he gets value for the quality of the product, but especially for the service, the experience you offer him. The price takes on a whole new meaning when the customer knows the story behind the creation of the product he buys, from those who grew the raw materials, those who built the company 50 years ago. In addition, I advise business leaders to never give up sales to deal only with the administration. You are the best ambassador of the company, it is your story that people buy.
In the end, the art of pitching is the art of listening.