April 5, 2007

Pitching Angels: Sell Your Company, Not Your Product

The next time you're pitching an investor -- whether it's in their office, at an event, on the phone -- repeat the following phrase 7 times before you walk in the door: "I am selling my company, not my product." Pitching an investor is not the same as pitching a customer. When you pitch a prospective buyer, you want them to buy your product or service. When you pitch investors, you want them to invest in your company. As with a good sales pitch, you want to cover the strongest points of the product that you are selling. While pitching your company, the points that are most interesting to the vast majority of investors are the traction you've made (sales, patents, past rounds of capital, sales and sales), your management team, market size/need and your business model. If you can convince them that these four elements of your business are rock-solid, it doesn't matter what your product is. You're likely to find success raising money. The tendency of most entrepreneurs is to spend the majority of their pitch telling the investor everything about his/her product -- how it works, how they thought of it, why it's better than the competition. Of course it's important to describe your product or service to investors, but it's should take up no more than 2/5 of your presentation.