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“Show me the money.”
The classic line from the film “Jerry Maguire” reverberates through many of the pitches entrepreneurs make to investors for funding.
In one sense, of course, the line – and the approach – is perfectly appropriate.
Investors invest, after all, to earn a financial return.
And if you’re selling bonds for the likes of a giant, well-established company such as IBM or General Mills, merely showing would-be investors the money probably works just fine.
But that strategy is less likely to work with potential investors considering funding your startup.
“Backable: The Surprising Truth Behind What Makes People Take a Chance on You,” a book by Suneel Gupta – brother of the telegenic neurosurgeon – explains precisely how unknown and unproven companies scored millions of dollars in funding and, in many cases, went on to earn their own fortunes.
Gupta, who has raised funds for his own startup, reviewed hundreds of successful pitch decks and now consults with scores of companies large and small.
His advice? Focus on areas other than just the dollars and cents.
In fact, he suggests you leave the financial details for another meeting and focus your energy on the granular details of your idea and how it will attract customers.
The book fosters an effortless and infectious joy – reading it feels like a personal coaching session.
Gupta doesn’t tell you what he thinks might work for your pitch. He tells you what has worked for hundreds of others.
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Gupta offers seven tips. Here are a few of them:
Know yourself and know your idea
Don’t start by trying to convince others that your idea could make money.
The right first step is to truly convince yourself that the idea is not only good but inevitable.
That requires an almost evangelical sort of storytelling. At their most convincing, these stories aren’t even about products but about customers – and how they interact with you and your products.
Zappos, for instance, is an online shoe store.
The fierce competition in women’s shoes is roughly akin to the NBA playoffs. There are thousands of shoe stores in the country in addition to discounters and department stores such as Nordstrom with hundreds upon hundreds of choices.
Every shoe brand has its own web presence and advertising. There is simply no shortage of places to buy shoes.
But not only does Zappos command a disproportionate share of the market – it’s No. 1 in the category – its customers are extraordinarily loyal.
Why? It’s not low prices. Zappos didn’t get to its level of success competing on price. It wins with superlative service.
Zappos makes buying a pair of shoes very easy. Returns are a snap. Shipping is free. Need help – just ask. Every employee is empowered to make the situation right and win a lifelong customer.
Here’s the kicker: Zappos is famous for paying embarrassingly low wages. And, yet, when it advertises open positions, it receives thousands of applications.
Why? Because the company focuses on its mission – serving customers – and only that. Sure, cannabis is different from shoes. But the lessons are no less useful.
Practice. Then practice some more
Gupta calls it his Rule of 21. He advises practicing your pitch 21 times – a full run-through with scripted and unscripted questions.
At roughly the 10th iteration, Gupta says, something happens. The presenter becomes so familiar with the material and the potential questions that the brain can focus on the audience and its reaction rather than the details of the pitch.
Maybe you won’t sell them all. In fact, you probably never will.
But keeping your senses trained on your listeners rather than your notes helps you see what’s working and allows you to hone your message on the fly.
Perhaps you’ll reach only one person in the room. Fine. That one person – or someone she tells – might make the difference for your company.
Tell your secrets – and how you got them
The other thing practice does is help you distill the truly valuable things about your company, the sort of inside baseball that might not be readily apparent.
Gupta advocates disclosing what he calls “earned secrets.”
For instance, a company once asked him to review its presentation.
He took a look, then went to an online site that offers paid input from users. For about $50, he got three short videos about the company he was looking into. When he relayed these concerns, the CEO was fascinated. “Where did you get this?” he asked.
This is precisely what we need to be focusing on. Investors want to know the secret sauce.
You do what no one else can do. What’s your secret?
Andy Obermueller can be reached at firstname.lastname@example.org.