15 takeaways from this video:
00:00:31 Every good answer has to start with a good question.
00:01:35 The fundamental elements of a pitch include:
- Current market conditions
- Identified problem
- How we will solve this problem
- How we will make money
These elements can be reordered in whatever way you feel possible to cater to the investor and personalize your pitch, making it your own unique story.
00:02:00 The anatomy of a pitch. You are competing for both the investor’s time and attention. Obviously the more attention they pay, the greater the indication that they like your startup and the greater the chances are of them wanting to invest in or follow-up on your startup.
People generally pay attention in social settings because they are afraid of being at any moment asked to participate in the discussion. But just because they’re paying attention to you doesn’t mean that they are interested. There is, therefore, no guarantee that they are interested in you even though they appear to be.
Investors might not pay attention for several reasons, for example they are in a large group and so the risk of being directly asked to participate is low to non-existant, they may be distracted about work or home life, they don’t clearly understand what it is you offer r aren’t convinced by what you offer, or they simply don’t like something about you or your pitch.
00:02:55 Whether a person is watching a 30 second Youtube video, your pitch, or an hour long episode of Game of Thrones, people’s attention level follows a predictable path. Right at the beginning the person is paying full attention because it is new information, a new person, a new environment. This is known as the primacy effect – the tendency to recall information presented that happened at the beginning of an event or exchange.
Eventually the person’s attention level drops as they either lose interest and/or become distracted with other things and their mind begins to wander.
Towards the end, once you give the person a clue that the persentation is drawing to a close – such as with the words ‘in conclusion,’ ‘lastly,’ or ‘finally’ – the person’s attention level returns and is focused on you. This is known as the recency effect – the tendency to recall information presented that happened most recently.
00:03:35 Your call to action is your official instruction after a pitch or presentation specifically designed to provoke the investor into making some desired response. By the time you’ve reached your call to action, the investor will have already made up his or her mind as to whether or not to invest in your startup. The investor will either say:
- “Yes” and invest immediately or seriously begin the process leading up to investing in your startup by having their accounts examine your business plan more closely.
- “Not yet” and then startup may come across their desk later and they may reconsider their original valuation of your startup.
00:04:11 During your presentation you must include a logical, emotional, and compelling reason to believe in your startup followed by your call to action.
It is important to combine logic and emotion to create a well-rounded pitch. Emotional pitches lacking sound logic and feasibility do not make for persuasive pitches. Logically-sound and feasibility pitches lacking an emotional element do not make for attractive pitches either.
00:04:44 Basic things you can do to improve the amount of time the investor is paying attention during your presentation could be:
- Involving them in your presentation
- Maintaining eye contact with them
- Having a beautiful Powerpoint presentation that catches and keeps the investor’s attention
- Placing your Q&A intermittently during your presentation rather than exclusively at the end
- Having a really disruptive and/or very lucrative business idea that excites the investor
- Tell them a captivating story
00:05:35 Right or wrong, people make snap judgments about you. These decisions about you are unconscious and immediate and are based on years and years of the investor’s experience. If the investor in front of you is experienced, they will have already seen thousands of pitches and will instinctively know if:
- A startup has potential
- A startup is good but will require a lot of mentoring
- The startup’s name will need to be changed
- One or more of the startup’s team will need to be replaced or rearranged
- There is a weak link in the business model
00:06:10 The important question is “How long does it take for the investor to make a snap judgment?”
Professor Frank Bernieri of the Univeristy of Toledo found that in a job interview, the interviewer makes a snap judgment about potential job candidates within the first 15 seconds of a job interview, and that initial impression of you changes very little by the end of the interview. Those 15 seconds – your first impression – acted as an anchor and determined how the interviewer perceived you: your competence, level of intelligence, trustworthiness, etc. The remainder of your meeting acts to either confirm or deny the interviewer’s first impression of you.
Dr. Alexander Todorov of Princeton University took Professor Bernieri’s first impression findings even further, finding that just 100 milli-seconds was enough to predict election votes by a margin of 68-72% accuracy. Meaning that simply ‘looking’ competent may be convincing enough to get the job done.
This is the power of your introduction.
00:09:00 Max Garrone gave a very informative Q&A session for Ted.com entitled “Do startup names matter,” and concluded that investors act on gut and emotion…. Include some sort of quote.
00:09:26 Memory is made of data, facts and emotions. Facts establish the logic of your story as well as your credibility as an informed entrepreneur.
00:09:48 People don’t care about something until it affects them. If you won’t take the time necessary to understand who your audience is and what they want, why should they care about what you have to say or sell them?
[EDITOR’S NOTE: How To Start A Startup: The Importance Of Choosing Your Idea & Team offers great advice on the importance of understanding your audience.]
00:11:15 There are two different types of Powerpoint presentations: the presentations you give face-to-face, and the report publishing presentations you email or handout to your audience. DO NOT give a face-to-face presentation using your report publishing handout because your audience isn’t going to read all of the text on your slide; or if they do read it then they won’t be paying attention to you, the speaker.
If your presentation includes pie or bar charts, don’t include a key off to the side. Instead, integrate the key into the chart. This makes the presentation more beautiful, reduces space, and most importantly it takes less time for your audience to understand and remember your chart.
So take what your text and want to say and memorize them, then place them into the notes field of your Powerpoint presention for you to printout and hand to your audience to take home with them.
00:13:00 People forget 90% of what you said within 30 seconds. Recall the primacy and the recency effect where your audience remembers what you said at the very beginning and what you said most recently, and they might remember bits and pieces of what you said during your presentation.
00:13:49 People won’t always remember what you said, but they always remember how you made them feel. At the end of the day your presention will be nothing more than a handout, a few scribbled notes, and a general impression of you as a trustworty and competent person.