A few years ago I was lucky enough to lure a top-notch investor to my digital marketing business. I’ll be honest, it didn’t go to plan and I almost missed the opportunity, but it taught me a lot about how to nail a pitch.
It was January 2019 and I was surfing LinkedIn on my holidays (yes, I am that cool) and a profile headline caught my eye: “Looking for digital agencies to invest in”. I had toyed with the idea of bringing an investor into my business so I clicked the profile, saw a potential opportunity and shot him a message. That progressed to a phone call, and then a meeting at a cafe.
Preparation pays off
Before we were even seated, he was asking about my P&Ls, retention rates and business operations. The whole experience was over in 15 minutes and before I knew what was happening, I was agreeing to send over my financials.
If you are lucky enough to get in front of a prospective buyer, make it count. Know your product or service inside out so you are ready for any curly questions.
If you are using a deck, give yourself plenty of time to put it together. Nothing looks worse than a deck riddled with errors. Also, rehearse running through your deck with someone else first.
When less is actually more
I hadn’t Googled him beforehand, so it was only afterwards that I realised the person I met was Nick Bell, a five-time AFR Young Rich Lister.
He started asking for specific information about my business. While it was tempting to bombard him with information, he was direct and very specific with what he was after, so I was very particular about what I sent, to make sure key information wasn’t lost.
Focus on a few key points when presenting your case. One of the most common problems is a convoluted pitch that leaves the potential buyer with no idea what they are being asked to invest in. Keep it simple.
Stop talking, start listening
People think that when they are pitching, they need to be doing all the talking. Wrong. Make sure you are actively listening.
Every time Nick and I spoke, I made sure to really listen to what he was asking.
Don’t assume you know what an investor will ask, or what they are thinking. This ensures you are on the same page as your prospective buyer so you can get on top of any objections, or pivot if they are clearly not interested in your original direction.
What if the answer is no?
Let’s face it, no one likes rejection. But if you can get over that uncomfortable feeling of being told ‘no’, you’ll get more out of life. My mentality is, if you don’t ask a question, then the answer is definitely no. If you put yourself out there, there’s at least a chance of getting a yes.
Nick and I went back and forth, sending numbers and business information, then the emails stopped. After a few days I emailed to ask if he was still interested. He replied it wasn’t the right opportunity for him. Safe to say I was pretty disappointed.
Later that night, I thought back to our first call, and the gut feeling I had then that we would do something together. So I emailed Nick and asked if he was open to a quick chat the next day. He said yes.
The next day we jumped on a call, and I confidently told him he was making a mistake and missing out on a huge opportunity. I explained why and to my surprise, he said he would make an offer. We reached an agreement and he invested in my business. It’s important to note here that since that initial investment other opportunities have followed that include having Nick as a mentor and working together on a new business that brings together mentors and mentees from around the world.
So what’s the moral of the story? Be prepared, keep it simple, actively listen, and don’t take no for an answer. If you believe in something, find a way to make it happen.