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This is an excerpt from The Six Secrets of Raising Capital, on sale from September 28th-October 5th for 50% off as part of our collection for entrepreneurs: Kickstart Your Kickstarter!
You will be able to give this speech when you wake up in the middle of the night, when you are on the subway or in an elevator, when you are called upon without warning, or when you bump into someone in a grocery store. It has to go off like an alarm, whenever the opportunity arises. You will tell your story an incredible number of times. The better you tell it and the more compact it is, the more impact it will have.
Looking at your bulletproof speech item-by-item can help you identify any unnecessary bulk that you may be having trouble eliminating. So, whether you are building your speech or refining it, here is a breakdown of exactly what each portion should accomplish in order to make it all-around bulletproof.
The Credibility Builder
When speaking to someone new, you start by establishing a level of credibility. Without this important step, your listener will be staring you in the face trying to understand why you are speaking to them. If you are giving your speech to a stranger, then chances are you have had some conversation leading up to it. During that conversation, you most likely established credibility in a roundabout way that led you to begin your speech. If, on the other hand, you have contacted someone with the intent of presenting, you need to start with linking them to you and your idea. Until you get past the credibility issue, the person you are speaking to will not be listening to what you are saying at all.
For example, imagine that you are launching a company that will revolutionize antivirus software; you have named it Lock-down Inc. You could start with, “Hello, I am Bill Fisher, and I was referred to you by Tom Powell, who mentioned to me that you are interested in the development of the antivirus software industry.” If you have a name that means something to this person, use it; of course, you will need to have the permission from the person who referred you. If you have not been referred to this person you might start with, “Hello, my name is Bill Fisher, and I read in the Wall Street Journal that you have an interest in the advancement of antivirus software.” You need to make whatever link you can that allows them to see why you have specifically targeted them with this proposal. You can find additional tips on establishing credibility in Secret 4, in a section entitled “You Get Introduced.”
The next portion of your pitch should revolve around your identified problem: the bad guy. Let your listener know that the problem exists and why it is significant. Let it be known that you are leading the crusade to solve this problem. For example, “I’m leading a senior team that is building a company focused on eliminating the source of most computer viruses, namely e-mail points of entry.”
Translate your problem into economic terms: “You probably know that the current industry expense of trying to cure viruses is $20 billion a year, and that number has been growing over 30 percent per year. What is not as well known is that 90 percent of viruses infect the computer purely through the e-mail portal.”
After you have identified the scope of your problem and the pain it inflicts, explain your solution. Allow your listener to clearly see how your solution can correct the problem that you have just detailed. The potential investor should be able to understand why your solution makes sense without needing a PhD in computer engineering. Aim to show the direct impact that your solution has on the problem. For instance, “My team has discovered a patentable technology fix for the majority of computer virus attacks worldwide. We’ve tested Lockdown Inc. software with large-scale beta customers, including Apple and IBM, and it works.”
Part of your solution is the expertise of your team. State the experience and skill sets that make your team members credible. For example, “My team of IT specialists is led by the creator of Hotmail. My two software developers were key players in creating the first antivirus programs at McAfee, my marketing team helped popularize Norton Antivirus, and product development is led by a former FBI technology fraud investigator.”
Explain that you have researched your competition, identified your niche, detailed a realistic budget, tested parts of your solution, built prototypes, etc. Show your potential investors that you have not been sitting around with your hand out waiting for money to drop into it.
For example, “So far we’ve built a prototype solution, tested it fully with large beta customers, and filed for a patent. Our competition is trapped by legacy technology that has them focused on the wrong end of the problem. We believe we can capture 1 percent of that $20 billion market in a five-to-seven-year time frame, creating a company that could be valued in the range of $200-$300 million.”
This is the portion of your pitch in which you first mention the available investment opportunity. You might say, for example, “The reason Tom introduced us is that we’re going to be choosing an investment partner soon to help finance the scaling up of our marketing efforts.” This allows you to draw them back to your source of credibility while you focus them on the investment opportunity.
Let your potential investor know that you are speaking with other investors, but you would like to work with them, in particular, for certain reasons. This is the point when you show your knowledge of their firm, if applicable, or of their investment history.
For example, “We are talking seriously with a couple of other firms, but you were suggested by Tom Powell as a potential partner because of your successful history in helping to develop software start-ups.”
Call to Action
When you reach this portion of your pitch, you will have already established credibility, identified the problem, provided your solution, outlined the solid progress you have already achieved in building your solution, identified the opportunity for investment, and mentioned why they might be a suitable investor. Now it is time to set up a more in-depth meeting. This is, after all, the point of your bulletproof speech: to get your potential investors to set up a time to hear more. For example, at the closing of your speech you could say, “I’d like to set up a time to explain a bit more about Lockdown Inc. What does your schedule look like in the next couple of weeks?” If you have ended up giving this presentation in a parking lot, an elevator, a subway, a noisy restaurant, you may want to say: “I’d like to set up a time to explain a bit more about Lockdown Inc. I’ll call your office tomorrow to find a time that works for your schedule.”
Remember, you will most likely give your bulletproof speech hundreds of times in order to narrow the field down, over time, to ten or twenty qualified investors. If you do not put the time and energy into making your speech bulletproof, plan on giving it thousands of times, or possibly for the rest of your life.