Pitching your Business “the Blackhawk Way”
I am approached by hundreds of entrepreneurs every year pitching me their respective businesses…Some real polished and focused, others amazingly ineffective and convoluted.
I thought I’d share with you some basic tips as to how you could make your pitch as effective as can be to get my team’s attention along with mine.
It is a fact that some CEOs are masters at communicating their ideas with their teams. Others fare less well if not miserably.
So here are some key general guidelines for your consideration.
- Don’t oversell: I understand how most successful entrepreneurs are passionate about their businesses, but please don’t bullshit me or sound like an infomercial. We have accumulated tons of data to call you on your bluff even before we have even met you. So you won’t do yourself any favors by adopting an overconfident, smarmy persona who sounds at best like a lawyer and at worst like a used car salesman. Just be yourself and never even think about getting away with any made up a story about you or your track record.
- Lay Out The Framework: At a high level you can probably reduce your business to a simple formula. If I’m asking about X, just show me where X fits into your overall formula and we can go from there. Don’t beat around the bush. Be laser-like focused in your answers. I like to set traps and see how you react.
- 3. Assume I know nothing about your business: It is a fact that one of the toughest parts of developing a pitch is getting the balance right between too much information and not enough. So use your limited time to give us a complete but succinct overview so my team and I truly understand what your product does, why it’s relevant and what gap it fills in the market. At the same time, please try to be as brief as possible.
- Watch your Body Language: Remember that more than 90% of all communications are non-verbal. As humans, we pick up a lot of signals even when we don’t realize we do, and you give them off in the same manner. We pick up eye-rolls, sighs, arm-crossing, boredom, etc…. We know when you’re disagreeing even if you don’t speak. If you disagree or don’t like what somebody says, pay attention not to give this off in body language. Just take a note to come back to it later. I know I’ll get mocked for saying it, but I actually think it’s important to think positive thoughts when you disagree with somebody. If you’re thinking positive thoughts, your body communicates positivity and you’re less likely to let off negative body language. I do this all the time — especially when somebody is pissing me off and I don’t want it to show.
- 5. Tell me something I don’t know: So many entrepreneurs come and tell us stories about the industry, their exponential growth potential, and how great they are… Frankly, this is of no real interest to us whatsoever as we can have access to such information more than any entrepreneur will ever be able to. What we are mostly interested is “HOW” you are going to execute and create for us all “obscene wealth”. Anything short of that is honestly for the birds…not for us. Very few entrepreneurs – only the real killers – are able to flesh out their “Value Proposition” in a very clear and systematic way. These are the type of entrepreneurs we usually back. Be one of them.
- No Competition/Inept Competition Statements: The number one way to ensure that your proposal is going to rain down from my office window onto the passersby below like confetti on New Year’s Eve is to make the statement that your business idea has no competition. While it may be true that no other company sells a product substantially similar to yours, this does not imply a lack of competition. Any substitute product, process, or service that satisfies the same need is a competitive solution. Stating that no competition exists reveals either a lack of market research or imagination on your part. While you may intend such a statement to imply that your new product, process, or service is so unique, proprietary, or innovative that it will corner the market overnight, I have to err on the side of caution and interpret the lack of competition as evidence that there is no perceived need for your product, process, or service. If there is a perceived need, then the market is either so risky, undesirable, or miniscule as to be unprofitable. Such a statement is an instant deal killer for me.
A close cousin to “there is no competition” is the statement that the existing competition is too lazy, stupid, or any other adjective you might use to denigrate your competition. This will detract from your business plan more than it adds. The statement offers me no insight into why your company will succeed against an entrenched company; however, it will tell me much about your emotional maturity and indicate a great deal about how you will react under pressure when things do not go as planned—which, by the way, is almost always the case. If the competition has failed to seize the initiative due to its organizational structure, speak to the lack of incentives implied by this type of organization and contrast how your organizational structure remedies that shortcoming. Identify weaknesses in the competition that are difficult to change, as opposed to poor leadership, which is relatively easy to change. Offer me information that shows me you have a thorough understanding of the competitive landscape rather than hurl invectives against the existing companies. All that is going to accomplish is having me hurl invectives against you.
- Sweat Equity: The next misstep is telling me that the founders of your enterprise have invested X number of hours of their time in the company, thus having X amount of sweat equity. I do like to see that the founders of an entrepreneurial company seeking funding believe in their business enough to make investment and personal sacrifice to sustain its survival, but please do not confuse the two. While forgone salary represents an economic cost of the venture to an entrepreneur, it is not an investment into the business. Investment translates to “cash” spent for costs related to starting and developing the business. If you have spent a significant amount to do this, please make sure to include the figure somewhere in the financial section of your business plan. If you haven’t put your own money into the venture, don’t expect me to.
- Exaggeration: Don’t use hyperbole in estimating your market or how much market share you project you will capture. I just shake my head whenever I see statements like “We will sell into the $X trillion global market. . . .” Incorrectly sizing the market tells me one of two things: You lack either the knowledge to assess who would buy the product or the integrity to delimit this statistic accurately. If it is the first, I will think you are either too lazy or too stupid to succeed. If it is the latter, I don’t want to be in business with you. Either way, I’m not going to back your plan. I operate on the basic premise that business is “war” and the only way to win is to be armed with better intelligence. Let me give you a little insight. No matter what numbers you put in your plan, I am going to have my analysts and my intelligence network confirm them. If there is a variation of more than a few percentage points, I’m going to think you are not smart enough to know how to take my investment and build it into a healthy return. Pay attention to details and be honest. You are not going to impress me with your fantastic claims and wishful notions.
- Use of Funds: Knowing why you are raising the capital is as important to me as knowing for what you are raising capital. I have some experience in determining operating expenses and like to think I have a pretty good idea of what is required for certain businesses to succeed. Also, if I am going to fund your business, we are partners in a very real sense. I believe that gives me the right and, more important, the obligation as part of my duty and service to you to know what you are or will be doing with the money. I am not interested in funding lifestyle entrepreneurs who have somehow convinced themselves that in order to be taken seriously in their business, they have to have a penthouse overlooking South Beach, a chauffeured limousine, and a private jet. I’m looking to fund a performance entrepreneur who leases a space in an office park, drives an appropriate vehicle, and, if it is a requirement, has a membership with a service providing fractional ownership of a corporate jet. I am not opposed to utilizing all of the tools necessary to drive or even force your venture into success. Just show me that you understand concepts like opportunity cost, risk and return and deferred reward. The trappings of success come to those who have earned them, not to those who are living on someone else’s dime. The bottom line is that I use the old fruit stand analogy when evaluating a business plan: “Lemons ripen early, plums ripen late.” If the deal looks like a lemon early, it probably is a lemon.
- Be ready for questions that few people would ever ask : For example, if two people are co-founders and co-CEOs, I might ask, “If you got an offer for $100 million, would you sell?” or “If you ran out of cash and one of you had to go, who would it be?” I’m just looking to find out how decisions are made, how open you are with each other and whether there is clear leadership. Anything that can go wrong in a company will. I prefer to know how people respond to adverse situations and who is empowered….or I might just ask a very simple question such as “what pisses you off” and see how you would respond. Everything for me is about character… and I need and will see beyond the veneer; you can rest assured of that.
- Be on top of your facts and figures: I am often approached by entrepreneurs sounding like robots when doing their pitch…. Funny but true. If for example asked a question they cannot answer on the spot, their typical answer is “I will get back to you on this”. To be perfectly candid, this is not only unacceptable to the Blackhawk team but a complete turn off as well. If we are asking for a piece of information which isn’t very central to the way you think about your company , I’d love to learn why on the spot. If you haven’t run the test, don’t have the data handy or need to crunch the logs in order to tease out a piece of information, that’s totally cool… but don’t waste 10 minutes of my valuable time and yours looking through your inbox for the email with the stat…. For me, a CEO should be in total control of all… If not, go and find yourself a job.
- Expect the unexpected: If your computer presentation fails, be prepared to wing it. Everyone likes a story of battling adversity and coming out ahead; it’s no different with us. If you can deliver your pitch seamlessly when the walls are crumbling around you, you do a great service to your business and are likely to impress anyone. If your computer crashes during your presentation, be prepared to pitch without it. Don’t apologize, lose time trying to make the technology work and waste even more of our time and yours.
Now get your team ready… Let’s see if you have what it takes.