An entrepreneur eager to raise money for his fledgling company is cut off a few sentences into his pitch.
“Wait a minute. I’m bored,” says Mel Pirchesky, principal of Eagle Ventures and a dealmaker who has raised $40 million from high-net-worth individuals for various ventures.
Fortunately for the entrepreneur, it’s just a workshop to illustrate how to hone a pitch to a prospective investor or to anyone who might lead to a potential funding source.
Pirchesky says there’s no magic to raising money, it just takes a lot of hard work. None of his deals, he says, have been easy, but all have required an effective pitch to investors.
The key to an effective pitch is to refine it so that it captures interest in a couple of sentences.
“If you don’t catch their attention right away, you’ll lose them,” says Pirchesky.
Great deals get funded even in bad times — Pirchesky got a deal funded in the wake of the stock market crash of 1987 and raised $1 million for a grocery delivery company after the spectacular failure of Webvan, a similar venture.
“If you have a great deal — and if you’re not getting it funded — it’s not for the lack of money,” he says. “It’s all in how you’re articulating or not articulating.”
Pirchesky offered this advice to would-be money-raisers:
* Be enthusiastic. No one is going to show interest in your deal if you don’t demonstrate passion for it.
* Be prepared. Hone your pitch so you grab an investor’s attention quickly.
* Practice. Test your pitch over and over to make sure your target is getting the message. Seek out every opportunity to try out the pitch.
* Revise. If you’re not getting the money, you must change your pitch.
* Have a strong revenue model. Investors want to know how — and how fast — the business is going to make money.
* Get the right jockey. “Do you want to be rich or do you want to be the boss?” Pirchesky asks. You may be a great entrepreneur but not much of a CEO. If that’s the case, be honest and hire a professional manager to run the venture.
* Be truthful. There is no perfect deal, but that’s no reason to be deceptive about your company in your pitch. How to reach: Eagle Ventures, www.EagleVentures.biz