If you’re an entrepreneur, coming up with business ideas is the easy part. After all, being creative and innovative is as second nature as breathing. Selling those ideas to others, however, can often be your biggest challenge.
What’s the best way to pitch your brilliant idea to potential investors or partners?
First, be aware of the fact that humans form an opinion of another person in less than 150 milliseconds of meeting them. We immediately put each other into a certain ‘box’ and it can be very difficult to get out of it. While in some instances you may be meeting with your local bank manager or community business development agent who has known you for several years, in other cases you may be pitching to a roomful of strangers who will stereotype you as soon as they set eyes on you (albeit, most likely unconsciously). Solicit honest feedback from friends, family and colleagues so you can be aware of how you come off. For example, it’s wonderful to be confident, but you don’t want level up to power-ego.
Additionally, many investors are beginning to consider a pitcher’s emotional intelligence and its related abilities to attract, retain, and motivate employees – key factors that will ultimately impact the scalability and success of a company. For example, investors are assessing how often founders consult outside experts to help them manage their strengths and weaknesses, whether their communication style positively influences and inspires others, how they handle tough questions and scenarios, and whether or not they can stay flexible without losing focus.
You should also understand what adjustments you can make to your presentation to increase your chances for a successful pitch. Research conducted by Kimberly D. Elsbach, Professor of Management at Stanford University, showed that by making the ‘catcher’ (e.g.: the venture capitalist, angel investor, bank manager, your parents, etc.) feel that they are participating in an idea’s development, you’ll improve your chances of selling your idea.
Elsbach writes in ‘How to Pitch a Brilliant Idea’, that “People on the receiving end of pitches have no formal measures for assessing that elusive trait, creativity. In hurried business situations in which executives must evaluate dozens of ideas in a week, or even a day, catchers are rarely willing to expend the effort necessary to judge an idea more objectively. To avoid fast elimination, successful pitchers turn the tables on the catchers by enrolling them in the creative process.”
One way to do this is to try to deliver your pitch as one of the three personalities Elsbach’s research has shown to be highly successful: the showrunner, the artist, or the neophyte. The Showrunner expertly and intuitively combines creative thinking with passion, can demonstrate adequate technical know-how, and is comfortable using their wit and charisma when pitching. The Artist is a non-conformist, has a “single-minded passion and enthusiasm about their ideas”, and tends to be a little shy or socially awkward. “While not as polished as showrunners,” Elsbach writes, “artists are the most creative of the three types. They don’t play to type; they are the type…genuineness is what makes the artist credible.” The Neophtye is the opposite of the Showrunner: “Instead of displaying their expertise, they plead ignorance.” In other words, their appeal is in the fact that they dare to do the impossible and that they are eager learners. They ask for help in a way that a student asks for guidance from an experienced and talented mentor. (You can learn more about these three personalities here.)
Alternatively, she cites four personality types that can kill your pitch in a matter of seconds: The Pushover (would rather unload an idea than defend it), The Robot (presents detachedly as if the presentation has been memorized from a how-to book), The Used-Car Salesman (obnoxious, argumentative), and The Charity Case (needy; all they want is a job).
If you don’t identify with one of the three creative stereotypes, Elsbach offers this final advice: “A résumé full of successes is the best calling card of all. But if you can’t rely on your reputation, you should at least make an attempt to match yourself to the type you feel most comfortable with, if only because it’s necessary to get a foot in the door.”
- Choose a business model that matches your product/service.
- Have a functioning prototype.
- Demonstrate market demand and that you’ve gone through a rigorous validation process.
- Show you’ve got some market traction and that to date you’ve hit the milestones and sales goals you set for your company.
- Pay critical attention to the first impression you will make – your appearance, your gestures, your presentation.
- Name drop – this shows a lack of confidence in your idea and your own abilities to make it work.
- Overestimate the size of your market. Instead, show a bottom-up analysis based on sales projections.
- Lose your cool under intense questioning and scrutiny of your business since this could potentially set off warning bells that indicate a lower level of emotional intelligence.
- Be ungracious about constructive criticism or suggestions for pivoting to a different business model. Investors have witnessed many failures and successes and your willingness to adapt will be a big plus.