Having a business innovation is easy: pitching to investors
for funding is much harder.
Entrepreneurs, business owners, sales people and corporate
innovators often do remarkable presentations to pitch their concept—only to be
rejected by corporate decision makers or private equity managers who do not
grasp the long term value. Why does this happen?
Having watched private equity managers who access business
pitches, the person on the receiving end—the “catcher”—tends to gauge the
pitcher’s competence at carrying through, as well as the deal. An impression of
the pitcher’s ability to open up and discuss the business in detail will
quickly overshadow the catcher’s assessment of the value of the deal. In other
words, if the pitcher can work with others, the deal moves forward. If there is
any hint of resistance to team input, the deal is dead.
Having interviewed many private equity managers, there are
patterns for those judging business opportunities.
Catchers subconsciously categorize successful pitches as
show runners (smooth and professional), experts (quirky and unpolished) and
neophytes (inexperienced and naive).
Research also reveals that investors tend to respond well
when they believe they are participating in developing the business going
forward. As Jacoline Loewen, a private equity expert, recommends, “ CEOs
pitching their business should pull back and encourage comments on the
business. Then use these comments to build on the Private Equity manager’s
comments to make them feel they are adding to the future plans.”
To be successful pitching, whether marketing ideas, sales innovations,
a start-up or a mature business, portray yourself as one of the three creative
types – show runner, expert or neophyte. Then engage the catcher in a
discussion where their views are discussed and integrated into the plan going
forward.
By giving catchers a chance to shine, you sell yourself as a
likeable collaborator.
You can Google back programs of The Pitch on BNN and watch
how the private equity investors either warm to the pitcher or shut them down.
See if you can categorize the pitchers who do achieve the thumbs up from the
private equity panel. You will see they fall into one of the three categories
and that they embrace comments enthusiastically and open up to ideas.
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