How does a budding innovator convince total strangers to give up their money? For Peter Evans, it's all about the pitch.
Evans, a senior advisor at technology incubator MaRS, presented at Enterprise Toronto's Small Business Forum his thoughts on crafting the ideal pitch to investors with the cash to spare and the ability to bankroll an entrepreneur's dreams. "You don't get other people's money if you can't effectively communicate to investors in a rational manner why your innovation is good for them to invest in," said Evans, a long-time tech entrepreneur and CEO of startup Speakerfile. Over the course of an hour at the Oct. 18 event, Evans outlined his methods in crafting an ideal investor presentation. He said his experience in various technology startups over nearly 20 years had taught him that a successful investor presentation must demonstrate within 12 minutes how a product will solve a real problem in the marketplace in a way that has never been conceived before, as well as provide compelling evidence on how such an innovation will greatly enhance an investor's bottom line. "You need to effectively summarize how it's a great product," Evans said. He compared a successful pitch to the "seduction" of an investor. "You throw up so many intriguing ideas that the investor immediately gets interested," he said. "You appeal to the investor's sense of greed." He suggested using the tried and true template of a standard informercial to demonstrate in a showy manner how a pressing problem in today's marketplace has no true solution save for the entrepreneur's invention. "Show the insanity of how customers address the issue today," Evans said. "Focus on a metaphor to show how your product will solve the issue." Using case studies from actual successful pitches from companies he worked with, he showed the receptive audience at the Metro Toronto Convention Centre how it was possible to produce a slick, informative presentation using graphics and PowerPoint to create a winning response from "angel" investors. He advised against getting in too many details since it could bog down the presentation or cause the pitch to become derailed.But he stressed no magical formula exists when it comes to successfully getting at other people's money. "No two investors are alike," he said. He said learning how to give effective investor presentations is crucial for investors if they ever want to secure funds from anyone but family and friends. "The only people who give you money without expectation of getting something back are your loved ones, people who want to give you money out of love or other irrational reasons," he said. Above all, Evans said entrepreneurs must be properly prepared to demonstrate they know everything there is know about their product, market, competitors and any hidden advantages that will cause an investor to get excited. "If you can't tell me about stuff that I could spend 30 seconds Googling then there's no way you're going to convince me to give up my money."