Stop Pitching Investors | Know When to Pitch and When NOT to Pitch

Entrepreneurs everywhere are looking to master the pitch. There are countless books and articles on the subject of pitching and pitch decks. In pursuit of launching a new product or service, closing more deals, raising capital, etc., founders want to develop a killer, airtight pitch, so no opportunities are lost.

Often what’s equally important as what’s in your pitch is when to pitch. Timing and audience matter. Some audiences are ready and expect your pitch. Some aren’t. They won’t know what hit them. It’s essential to get it right when pitching investors. 

Pitching Gone Wrong

Here’s an example of pitching the wrong audience at the wrong time. A client of mine recently engaged the services of a pitch expert to deliver a customized pitch deck for his investment. Once he received the polished deck, he was anxious to put it to work.

He thought he’d try it on a longtime friend. Upon meeting this friend, it wasn’t long before he pulled out the deck and methodically worked through its points. It didn’t go as planned. Before he could get to the fifth slide, his friend stopped him and said, “What the heck are you doing? I’m your friend. Just talk to me about what you’re doing.”

So what went wrong? With all the attention on pitching and the pursuit of the “perfect pitch,” entrepreneurs often think they have to be pitching all the time. What gets lost is that not all investors are created equal. You have an important message, but you need to make sure it’s presented to the right people at the right time.

The Rules For Pitching Investors

With 26 years as an entrepreneur under my belt, I have closed large real estate deals, negotiated six-figure engagements, raised millions in private capital, and more. Here are my rules for pitching Accredited Investors:

• Who to pitch: Groups (either offline or online) and professional investors (such as venture capitalists and angel investors).

• Who not to pitch: Nonprofessional investors.

For a clear definition of each type of investor, please see my earlier article.

Pitching To Groups

The right pitch is ideal for sophisticated groups of investors. They’re like-minded, so you won’t have to worry about customizing your message or answering many questions. You don’t do the vetting. They do.

Groups of angel investors, venture capitalists, and professional investors have all been around the block. They’ve heard many pitches before, and they know how to evaluate a pitch, the questions to ask, and all the financial terms and metrics. Most group pitches consist of 10 minutes for the pitch and 10 minutes for questions. If you do your job, your pitch should answer most questions investors have.

Pitching One-On-One To Professional Investors

The individual professional investor, such as an angel investor, has seen a hundred pitches. They’re expecting your pitch and know what to expect and how to evaluate deals. The right pitch should work for most professional investors.

When Not To Pitch

Do not pitch nonprofessional investors — whether in person or over the phone. Nonprofessional investors are not prepared to evaluate a professional pitch deck or the metrics in most decks. Nonprofessional investors are each unique with their own particular set of circumstances. When you’re pitching deals or raising capital in front of one nonprofessional investor, the pitch does not take into account the prospect’s situation, investment knowledge, and experience.

Raising capital isn’t telemarketing. Your opportunities to get in front of investors should never be squandered, so prepare accordingly and put yourself in the shoes of the nonprofessional investor.

Remember the last call you received from a telemarketer? Telemarketers go right into their pitch, and you can’t get a word in edgewise. The telemarketer doesn’t consider your thoughts, experience, or expertise because they use a pitch. The same script is used for everyone.

How did the telemarketer make you feel? Like a statistic? Like everyone else? They don’t even pause to qualify you — to see if you’re even interested. You’ll lose your prospect if you treat them that way.

The nonprofessional investor (such as a C-level executive, medical professional or business owner) is sophisticated and will likely not be receptive to the pitch. You need to begin with a conversation and not a pitch. Ask questions, and learn more about their success, expertise, and experience.

For them, a “reverse pitch” is more effective. Let them pitch you. With the right prompts and questions, you’ll be able to tailor your message to lead the prospect to pitch you instead of the other way around. When done correctly, they’ll be the ones trying to convince you why you should take them on as a client or investor.

Tailor Your Approach To Your Audience

The perfect pitch will go a long way toward promoting an idea, growing a business, or financing a new venture, but there is a right time and place for pitching. Mastering that concept will maximize your opportunities. Groups and professional investors will be expecting your pitch. They’ll know what to expect and how to evaluate your pitch. The right pitch will be effective in these scenarios.

Nonprofessional investors are a different breed.

Unlike groups of professional investors or individual professional investors who have experience and knowledge with investing, nonprofessionals — who may have capital but not experience and expertise — each come with their own unique experiences. Using a pitch deck and your crafty pitch will likely confuse them and end up in a lost opportunity.

However, asking the right questions and modifying your approach will inform you on how a particular individual should be pitched. Many times, they end up pitching themselves, and everybody wins. That’s why timing is everything. There’s a time to pitch and a time not to pitch. Master the difference to close more deals and raise more capital.