Make Your Financing Pitch Sizzle

How you pitch your company determines whether you get the right partners, favorable financing terms, super executives, and best shot at success

by Christine Comaford

If you're a South Park fan, you'll remember the episode called the "Underpants Gnomes," in which gnomes have built a business based on stealing underpants from the residents of South Park. When the kids finally catch them and ask why they are doing this, the gnomes say it's all part of their business plan. "What's your plan, exactly?" the kids ask. One of the gnomes fires up a PowerPoint presentation to outline their three-phase approach. Slide No. 1 says "Steal Underpants." Slide No. 2 is blank. Slide No. 3 says "Profit!"

I cannot stress how many business pitches I've seen like this, where Phase One is "create widget," Phase Three is "profit!" and the crucial Phase Two is a complete unknown. See the info on my pitch critique worksheet at the end of this column to make sure your pitch is complete.

Let's say you have a capital acquisition strategy (see BusinessWeek.com, 1/22/07, "Rules for Raising Capital") and an advisory board (see BusinessWeek.com, 2/1/07, "Don't Go It Alone: Create an Advisory Board") to boost your credibility. You need two more things: a sizzling pitch and a variety of funding sources. In this column we'll nail your financing pitch, and I'll address financing sources down the road.

Roping Them In

I'm assuming you've already created a killer business plan, which will yield your executive summary and financing pitch. Your business plan will be about 20 pages, covering all aspects of your business. Put in the hours to make it perfect, because you'll be repurposing the business plan's content in sales presentations, marketing collateral and white papers, recruiting pitches, and your Web site. Your executive summary is a two-to-five-page bottom-line version of your business plan, a riveting bulletin from the front line that primes investors to read on.

Few people will want to pore over the whole plan—this is why you've got to rope them in with those first pages and establish that you're a savvy, trustworthy person with a substantial idea before you lay out all the details. The financing pitch is 10 to 15 PowerPoint slides extracted from the executive summary. This is the distillation of your business, which you'll design to deliver in about 20 minutes for attention-span-challenged people (see BusinessWeek.com, 9/12/06, "Grab Your Audience Fast") and (see BusinessWeek.com, 12/5/06, "Presentations with Something for Everyone"). You'll likely need the pitch in document form, too.

As a former venture capitalist, I've read tottering towers of financing pitches and project proposals. Often the pitches were for products or services that no one truly needed, or projects that weren't cost-justified, or worse yet, fabulous ideas presented poorly. To stand out, your pitch needs to be concise, compelling, and complete.

1. Be Concise

A concise pitch provides a simple explanation for why your business or project is a great idea, and how you'll execute the steps to pull it off. The pitch must explain your company in such a crisp way that the money contingent won't be able to put it down. You must convince them that you have a sound execution strategy and pragmatic tactics for making your vision a reality.

The key questions financiers want you to answer are:

Have you hired the right people?

Can you build/deliver your product or service? Will it fly?

Are you chasing big enough markets and can you reach them?

How much will it cost us to build this business?

You won't be able to eliminate the financial risk completely, so focus on showing how solid your people are, how exceptional your product or service is (and why), and how huge the markets are that you're going after (plus how you'll capture them). You must define your current and potential competitors, too, in honest, realistic terms.