Elevator Pitch for Investors (How to Charm a Stone)
Investors are essential for business growth
Charm warms up investors
Brevity is the essence of charm.
Have you ever thought it funny that we call the short business pitch an elevator pitch since most people keep to themselves on elevators?
Well, maybe that’s because they don’t know how to say something interesting, informative and curiosity-invoking in 30 seconds or less.
But you’re about to learn a foolproof method for doing just that. I’ll explain it and give you a powerful context for how to use it effectively.
You may not ever use this technique on an elevator, but I hope you’ll use it again and again at social and business events where investors, lenders, business partners and other interesting people gather.
Remember the old adage that you never get a second chance to make a first impression? Keep that in mind as we discuss the way to have something truly interesting to say when you meet people — particularly investors — for the first time. Being remembered is a third of the game. Being remembered as someone with something truly interesting to say is another third. Being remembered, as someone with something interesting to say, that investors want to hear more about, is the final third. Make THAT kind of impression over the first handshake and you’ve won the game of making a great first impression.
Now you might be thinking that the way to accomplish this is to somehow encompass your entire business plan, investor offer, ROI plan and exit in 30 seconds or less.
Actually, that is the WRONG approach
It’s also the well-worn path taken by most people when they finally meet that big-time game-changer who can fund their company. People think, incorrectly, that “I’ve got one shot at this guy, so I’ve got to say every possible thing I can about what I’m doing.” I’m at cocktail parties and business events every week and hear this approach again and again — often aimed at me! So, if you take just one thing from this post then TRUST ME that nothing will make investors run for the chips and salsa faster than what I call the “gusher” pitch. It’s like an oil well bursting over the infrastructure, uncapped, flowing a thick, gooey, smelly mess all over everyone in earshot.
I’m telling you, it’s sad to observe. You can palpably see in the body language of the target of the “gusher” pitch a mix of irritation, hesitation, and then resignation if they can’t find a way to get out of the conversation. When the gushing finally stops, the survivors make their exit and — remember a lot of these people know each other — warn their colleagues to avoid the gusher “cuz she could blow again at any time!”
I trust I’ve made my point. But just in case: DO NOT BE A GUSHER.
Unless you want to alienate investors.
OK so what DO you want to do in order to make a great first impression that leaves investors interested in hearing more?
First, think through the CPR for an elevator pitch — Context, Purpose, Results. If you haven’t read about the CPR, you can find a detailed discussion of this valuable tool here. Using CPR technology, recall that you define the result first — so, for example, a good result for an elevator pitch for an investor event might be “I had three in-depth conversations about my business with investors. I got an invitation to call five other investors for a future conversation. I scheduled two of those calls on the spot.”
Next, define your purpose. What are you trying to accomplish with your pitch? A good purpose might be something like “I have an ear-opening pitch for my company so every investor in the room will want to hear more and eventually I get funding.”
Finally, set an inspiring context for creating the pitch for the event. A good context might be “Leave ’em Begging for More.”
OK, so once you have a CPR that lights you up, it’s time to actually create your pitch. Let me give you a few specific guidelines to keep in mind at the outset:
- Design your pitch specifically for your target audience — in this case an investor
- Design your pitch to be memorable and repeatable — by the investor
- Design your pitch to be simple and authentic — quickly get to what matters most
Now a great elevator pitch follows a simple, three-part formula. Master this formula and you’ll write masterful elevator pitches. You’ll want these three sentences to be brief and easily deliverable in 30 seconds or less — hopefully less.
- PROBLEM: The first sentence states a problem. Make it the core problem your business addresses. Make it clear and make it simple. But above all, make it a “waker-upper.” That means the investor will find the problem interesting, compelling or even daunting or threatening.
- SOLUTION: The second sentence defines your approach or solution to the problem. It is the bridge from the first sentence to your final sentence. State your solution simply — boil it down to the elemental part. Don’t try to explain details of how your solution is accomplished. No time for that.
- TECHNIQUE: The third sentence is a shocker — something the listener didn’t expect to hear. It’s your secret sauce. Your particular genius. The thing that makes you memorable and them wanting more. A Cliff-hanger. A firecracker finish.
So that’s the winning formula, “PST”. Let’s dissect it a bit more.
Sometimes, it’s helpful to learn this kind of thing by using examples outside of the subject you’re working on. Your brain can take the information in, without immediately trying to apply it to your situation. So, to get a feel for what a great elevator pitch looks like based on the guidelines and formula I gave you, let’s look at one from history and one from film and literature.
Suppose you’re President Franklin D. Roosevelt and it’s the middle of World War Two, say early 1944. Your task: convince Dwight D. Eisenhower (“Ike”), Supreme Commander of the Allied Forces in Europe, to invade Europe through France. You know the following: The Russians are massing troops on the Eastern Front on the way to Germany from the east. Your overall goal is to win BOTH the war and the peace — defeat the Nazis and also secure Western Europe against a future communist threat. Time is of the essence. You’re the President.
Your pitch to Ike is:
- Problem: The Russians are coming
- Solution: Invade Northern France
- Technique: Use Patton as a diversion
Twelve words. Fifteen seconds at most. Firecracker finish. After all, who expect the most successful battlefield general of the War on the U.S. side to be used as a diversion? Now, you don’t need to agree with the set of facts I’m using here. Your goal is to learn the formula and to see how the formula, used correctly, can produce a BIG story in very few well-chosen words, with a BIG finish.
Let’s try one more. Suppose your job is to convince a friend to spend half a day watching the entire Lord of the Rings trilogy with you. How would you boil down a seven-hour film into an effective elevator pitch?
- A powerful evil has awakened
- Our only hope is to destroy it within its home territory
- An unarmed, four-foot tall creature is assigned the task
The first sentence states the compelling problem. The second sentence states a solution and bridge the listener to the firecracker finish, maintaining their interest level. The final sentence must be a surprise or a shock – the special sauce that no one else has. Something to pique their curiosity and leave them asking for more.
We could try to make this example even briefer:
- Evil has descended
- It must be destroyed
- Employ a small, harmless creature
By now you’re getting the idea, yes?
Let’s bring this closer to the world of business
I have a friend that counsels nonprofits about how to raise money. It’s tough out there, just like it is for early stage companies. And Executive Directors of nonprofits are doing what? Asking for money all day long, right? So, they, like you, need to nail the initial pitch. Too often, nonprofits get stuck in the morass of trying to explain their entire mission, program, benefits and why it’s important. My friend helps them get past that, get to the point, be interesting and remembered.
Imagine you’re a potential donor. You get hit with this pitch at a party:
I work with homeless Veterans.
They really need your help.
Your donation goes towards building housing for them.
Yuck! You’re not pulling your check book out, you’re looking for an excuse to politely end the conversation, right? They don’t even know you, yet they are trying to pry money from you because someone, somewhere that you don’t know, needs help.
Maybe that’s why Scrooge said “Aren’t there prisons? Aren’t there workhouses? Don’t I support those with my taxes?
Now try this one on . . .
One in four Veterans in the city is homeless.
You can reduce this to one in ten.
Provide housing that also includes work
THE THIRD ITEM HAS TO BE THE SPECIAL SAUCE, THE UNIQUE TRICK.
I don’t know about you, but I’m listening. In 15 seconds I learned a serious fact about people in my own city, a proposed solution that would resolve that fact and an intriguing technique that makes it all work. I’m interested in learning how that works. So, I’m listening.
Remember, your purpose in crafting a great elevator pitch is not to somehow tell your entire story in 30 seconds or less. That’s what a gusher does. It won’t work. In fact, it will usually backfire completely. Your goal here is to invite a conversation by saying a few memorable words, with a climax that piques enough curiosity to continue the conversation, either immediately, or by scheduling a call or meeting.
Make it quick. Make it compelling. Leave them wanting more.
Key takeaways: You never get a second chance to make a first impression with investors. A masterful elevator pitch can make a great first impression. To make it great, create a CPR before you write it, so you really know what you’re out to accomplish. Then follow the three-step process: problem, solution, technique — PST. State it is language people can remember and repeat to others. Get funded!
George Kenney, co-founder of noted VC firm Shepherd Ventures and now founder of the Entrepreneur’$ Bootcamp, guides and drills you face-to-face in elevator pitching and much much more about what it takes to touch, move and inspire real investors. Contact me to learn more about Entrepreneur’$ Bootcamp. You can reach me through the Connect page at www.IntelliversityCampus.org.