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Strive Masiyinwa: How To Make A Successful Pitch To Investors

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The clock is ticking… are you ready?

During the Transform Africa gathering in Kigali a few weeks ago, I took part in an event in which some really, really smart young entrepreneurs were pitching to a group of investors to take equity stakes in their businesses. The show was called Face the Gorillas. Each entrepreneur was given only about three minutes to make a “pitch” and then about 10 minutes to answer tough questions from the investors and to secure funding… right there and then!

Watching the event, I knew within one minute who would get money, and who would not. And in most cases, it had nothing to do with the quality of their venture.

I have been making “pitches” for finance for over 30 years. It is one of the core skills of an entrepreneur. You cannot delegate this, and no one can do it for you. If you’re going to do a venture, whether for profit or as a social enterprise, you must know how to make a pitch.

A few years ago, whilst traveling on business in the US, I came across a TV show called Shark Tank and became totally addicted to it. I have watched every episode that’s ever been shot, and sometimes several times!

I realized through this show that many entrepreneurs don’t know how to make a proper pitch to investors or banks, to provide them the capital they need. This is one of my inspirations for setting up the 24-hour entrepreneurial channel called Kwesé Inc.

# I told my team that they must go around the world and find content for Kwesé Inc so that entrepreneurs can see how “pitching” is done.

# We have spent millions of dollars ensuring that people across Africa can become immersed, day in and day out, in making pitches for capital.

Listen, it’s hard enough in Africa to raise capital, but opportunities will eventually come for you to get the attention of a financier (or banker) or even a venture capital investor. Increasingly, such people are taking an interest in Africa.

__When you get that opportunity to make a pitch, don’t mess it up by not knowing how to do it properly!

I’m so excited to tell you that Kwesé Inc has now recently started to show Shark Tank. It’s ONLY available on Kwesé Inc, and nowhere else in Africa for the next three years. It has already started showing.

There are other great programs which show how entrepreneurs make successful pitches for money, such as The Profit, Dragon’s Den, and so on. We’re also beginning to make shows specifically for African entrepreneurs, but how far we go depends on how much interest we get for the shows already on air.

On Kwesé Inc, we’re also developing a new concept whereby we’ll give an opportunity to entrepreneurs with an existing business or social enterprise to do a short three-minute video. We’ll then ask their peers on this platform to view them and “like” them, if they choose.

# The best will then be broadcast on Kwesé Inc, as a way to market (for free) those businesses across Africa, to millions of our viewers!

# This is also partly how we’ll choose the entrepreneurs who will come and spend time with me, as interns. We will be ready in a few months.

If you want to watch shows like Kwesé Inc, you can only do so with a Kwesé decoder, which can now be bought either online or through a dealer in your country. Go to the Kwese.com website to find out how!

Kwesé TV is now available in most English-speaking African countries, and we’re now beginning to work on French and Portuguese-speaking countries, too! We’ll keep you advised on progress.

For those of you who are entrepreneurs, I have done my bit when it comes to the subject of pitching to investors for money. You’ll find everything you need on those shows. Next year, we can discuss what you have learnt, and who knows… I might arrange for you to make a pitch to some investors.

Many of you asked me this week to say a bit more about “pitching,” including what the word really means. For an entrepreneur, a “pitch” is what you say and present to potential investors to market yourself, your idea and your business concept — not just to inspire them to invest, but to rush to be first in the queue!

Like I said before, our great reality shows on Kwesé Inc are now the best place for African entrepreneurs to see and hear from the best of the best in the world on this topic… and also watch people who “fail” to get investment (which is the majority). You can learn a lot from them, too!

Today though, in response to your requests, let me share the first of three parts of an excellent article from Entrepreneur magazine, written by Neil Patel, a young entrepreneur who gave me permission to republish it (remember the importance of intellectual property). It’s called: “13 Tips on How to Deliver a Pitch Investors Simply Can’t Turn Down.” Today I’ll share #1 thru #4.

I urge you to study and discuss each of these tips with your friends. You can also use them to assess the pitches and business approaches made by others on Kwesé Inc shows like Shark Tank, Adventure Capitalist and The Profit, because it will help you understand what it takes to secure funding from investors, when you get your chance. It’s important not to treat such shows as mere entertainment because they’re there to help you sharpen your skills!

Neil Patel’s “13 Tips” are excellent, and I will republish them all. But let me give you the most important tip of all: Securing funding from investors who require you to make a pitch, is won or lost long before you arrive to make your pitch!

__It’s going to be decided by the PREPARATIONS you make in the months and weeks leading up to that pitch.

In his article, Neil writes:

“Your pitch is the single thing that could either get your business off the ground or plunge your idea into eternal oblivion. It matters.

The rule of thumb for investors is that for every 100 investments they make, only 10 will go big.

Let me take that rule of thumb a step further. For every 1,000 pitches an investor hears, he or she will fund only 100 of them. Statistically, the odds for success are not great. You can beat the statistics, however, by crafting a pitch that turns heads and gets funded.

What are the ingredients of an ultra-compelling, irresistible, outstanding, and unforgettable pitch?

1. Take only ten minutes.
Timing is critical. The less time your pitch takes, the better.

A brilliant idea means nothing unless you can distill it to a few moments of sheer power. The more concise you can be, the more effective you will be. Here are a few timing pointers:

# If you say that you’ll take “only X minutes,” then take at least one minute less.

# If you are told, “You only have X minutes to pitch,” then take at least five minutes less.

# If you say, “One last thing” or something similar, then make sure it’s truly the
one last thing.

# Move at a good pace. Don’t rush at the end.

# If you’re using slides, don’t get stuck on one slide for more than three minutes.

Here’s the great thing about taking ten minutes. If the investors are really interested, they’ll ask questions. If they’re not interested, then you will have saved them (and yourself) some time.

2. Turn your pitch into a story.
Storytelling is a scientifically-proven way to capture a listener’s attention and hold it. Besides, it makes your pitch unforgettable.

Investors are bored with spreadsheets, valuations and numbers. If they want that information, they can get it. What you can offer that no term sheet can convey is the story and pathos behind your startup. Everyone loves a good story, even the most data-driven investor.

So, tell your story and tell it right. You’re bound to gain attention, and the funding will follow.

3. Be laser-focused.
Investors’ time is their most valuable asset. If you convey a respect for their time, they will interpret that respect as your ability to treat their funding with respect.

Because time is important, you need to develop an absolute focus on the core components of your pitch. What are those core components? They’re detailed in the following tips.

4. Explain EXACTLY what your product or service is.
Show your potential investors a picture of, or give them the actual product to handle.

Be careful not to drone endlessly on about your product. Honestly, investors don’t really care about your product as much as they care about the money that your product will make. The sooner you get to the good stuff — the money — the better.

__Know your product, your customers and your investor!

When investors listen to a “pitch,” establishing whether or not someone has a good business idea is the easy part. Most investors walk away because they’re not convinced they can trust you with their money. It’s really that simple. If I don’t tell you this, I will have done you a disservice. It’s nothing to be angry or bitter about.

This post must be read with the other two posts I’ve done on this subject. If you haven’t yet done so, I suggest you read them carefully, including my comments and those of your colleagues.

For those of you who missed last week, here’s a summary of Neil Patel’s first four pitching “tips”: 1) Take only ten minutes; 2) Turn your pitch into a story; 3) Be laser-focused; and 4) Explain EXACTLY what your product or service is.

Neil’s article continues with Tips #5 thru #8:

“5. Explain EXACTLY what is unique about your product or service.
If you are not producing or providing anything different from the run-of-the-mill widget, don’t even go to the meeting. Go back to your drawing board, and design something better.

6. Explain EXACTLY who your target audience is.
Use demographic and psychographic features to pinpoint your customers. Show investors a picture of a customer along with relevant data points.

7. Explain EXACTLY how you intend to acquire these customers.
Business success comes down to marketing. If you have a marketing idea, method, technique or process, this is your chance to showcase it. Contrary to pithy maxims, great products don’t sell themselves. You sell the product. To be persuaded, investors have to see an airtight strategy for getting the product to market.

Most VCs are well aware of the advantages of digital marketing and won’t take a second glance at a product that isn’t backed by a tactical plan for online marketing.

8. Explain your revenue model.
Investors invest because they want to make a return on that investment. An investor will care about your pitch if you can answer this question: ‘How will my company make you rich?’

The answer, in investor-speak, is your revenue model. Specifically identify which type of revenue model you are embracing, and how you intend to apply it. . .”

***

__By now you know that one of my favorite TV shows of all time is Shark Tank. I hope Neil’s excellent tips #1 thru #8 are preparing YOU to “swim with the sharks”! In my comments last week, I drew your attention over and over again to the need for you to understand investors. When you do your pitch, you must remember:

# Investors are not donors.

# Investors are not tourists.

# Investors are not philanthropists or charities.

# Investors have options.

If you have the opportunity to pitch to an investor, consider it a privilege rather than an entitlement:

# A good investor will never put money into a venture run by someone who comes across as arrogant, cocky or argumentative.

# A good investor will never put money behind someone who is dishonest, corrupt, or a thief. If you have a tendency for dishonesty or misuse of other people’s money, a good investor will find out before they give you a cent!

# A good investor will not put money behind someone who is careless or disorganized.

# A good investor will not invest in someone who is highly emotional. Being passionate is one thing, but being emotional is not acceptable!

# A good investor will not invest in someone who is political. You should understand the politics of your country from an economic perspective, but not come across as an active participant in politics.

Being a good investor is very hard!

__Your job is to show them that you can be trusted with someone else’s money.

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