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Selling Your Deal

by Geoff Baum

Investors may be flush with cash, but they aren't stupid. And they won't invest in a company that doesn't do a damn good job of selling them on the technology, market, and team. Many entrepreneurs ruin their chances of getting financing before they even get out of the gate because they don't know how to sell their deal.

Here's a few lessons that can help you close the deal once an angel expresses interest in your company:

When an investor requests more information, don't just email him a business plan. It is much more effective to get on the phone. Call him or her. Angels like to know whom they are dealing with and how they present themselves. Answer their initial questions and set up a face-to-face meeting. Find out whether it is best to send more information via email, or whether a hard copy package might be more appropriate (a good way to qualify interest and set the next step).

When you meet an angel, try to get a sense of how you would work together. Remember that this is a two way street. Think: Is this someone you can trust and respect in big decisions? If not, keep looking. You don't have to decide after one meeting, but you should be keeping these thoughts in the back of your mind. If you don't think it is a good fit, or decide to pass, the professional thing to do is to communicate your intentions. Send a thank you note or email. It's a small world. Investors network and talk to one another, so never burn a bridge.

What does an angel want to hear? An investor is looking at you just like you're looking at them. They want to know if you are smart and resourceful. Are you a hard worker who won't quit when the going gets tough? These are things angels want to know. They aren't going to throw money at someone they don't trust and respect. If you can't sell your company to them, how will you be able to sell your product to customers? Answer questions and dazzle them with your market knowledge. Investors want to know that their entrepreneurs are hard workers. What better way to show them than to convince them that your deal is the greatest thing since Yahoo! Use your salesmanship skills, tell them about the market research you've done and why your technology is great. Convince them that you have built a strong team of executives and developers.

Be confident and self-assured, but don't overstate your case. Good investors have built-in BS sensors. The worst thing you can do is lose your credibility. Remember that the entire process is about building trust and confidence in you, the plan, and the team. Be sure to listen and learn the investor's interests and hot buttons. Listening is the process of the data moving from the ears to the brain, not just waiting to talk. It is important that you 'connect' with your investor.

When the ball is rolling, you must be responsive. Return calls and emails promptly, even if you don't have all of the answers. Once the relationship has traction, it is your responsibility to keep the momentum. Do not try to close too soon. Think of it as a ratcheted process. Every step is important. Visualize the outcome, believe in yourself and the process, and move it forward one step at a time.

Don't know the investor? Don't be scared. When you've decided to proceed, do some of your own due diligence. Make some calls and ask around. Find out if this is someone with whom you want to deal. Ask about how the investor has worked with other companies. Is he or she hands-on or passive? Are they accessible? What value will they bring the deal besides money? Just because you don't have a previous relationship with someone is no reason not to work with them now.

If the investor is a jerk, be courteous but follow your instincts. Don't be worried that this is the only investor out there. Be patient. Successful money raising is a process, not an event. Life is too short to deal with jerks. If you can't stand him, don't. Even if a jerk decides to invest, just think how painful it is going to be to work with this person as you try to build your company.

Selling your deal will probably be one of the first major business challenges you take on as an entrepreneur. Don't go into this battle unprepared. Create a well-developed business plan, a snappy elevator pitch, and make sure you've done research on your audience. Practice your pitch. Get feedback. Tune it. It should become second nature. This preparation won't be easy or quick, but in the long run it will be time well-spent. The work you do to prepare for meetings with potential investors will help you shape your business, build upon your original ideas, and ultimately sell your products.

How to Pitch in the Majors

When it comes to refining your pitch in front of the moneymen,
some think Jerry Weissman is the best $6,000-a-day coach your startup dollars can buy.
By Lauren Barack, Business 2.0

http://www.business2.com/articles/1999/07/content/pitch.html

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