New Tips And Triks For You

Pete SheinbaumThe following guest post is by Pete Sheinbaum, founder and CEO of LinkSmart, a Boulder, CO, based company that helps web publishers develop and engage their audiences. He most recently served as the CEO of DailyCandy, overseeing its successful sale to Comcast Interactive Media.

People from all walks of life start businesses each year. Some spark brilliant concepts, some turn hobbies into enterprises and some stumble onto ideas by accident. Yet, all of these entrepreneurs have one thing in common - the courage to take the first step toward realizing a dream.

So what's the key factor that propels some toward success and others toward failure? In most instances it's capital - the fuel to take ideas from prototypes to companies. Securing capital involves several elements, but in my opinion, the ability to sell effectively is critical. As an entrepreneur, you must sell yourself and your idea and convince others to join you on this adventurous journey.

Selling yourself as a company founder means exuding confidence, leadership and a vision. Employees want to believe in something and they will look to you to inspire and reassure. Customers want to buy from a leader and a brand they can trust and respect. Investors want all of that and more.

Throughout the many stages of starting a company, most founders find themselves in uncharted territory. Rather than relying on a sink-or-swim methodology, here are a few self-selling tips for budding entrepreneurs who need the investor community to make their innovation a reality.

Know the Structure of the Initial Pitch Some nervous energy is good to bring to an initial investor meeting, but unpreparedness is not. Know what's expected of you and arrive armed and ready.

During this first pitch, prospective investors will be looking for you to succinctly cover three things: 1. The problem you are solving and how you plan to solve it, 2. Why you and your team have the experience or skill to execute on the vision, and, 3. That the market size is large and addressable, and the business model simple and transparent.

Communicate your vision by painting a picture using real examples or tell a story. Describe the use-case - Who will interact with the product? How will it improve their lives? How will it save them or make them money? Storytelling brings your vision to life, helps investors grasp your ideas faster, and makes them remember your company after you've left the building.

Research & Homework

Structure-wise, initial meetings typically last an hour, with 20 minutes for the 'pitch' and the remainder for Q&A. Set the hook in the first five minutes of the pitch. If an investor is interested in learning more, they'll ask for a summary to share with partners. Be armed with a 15-page slide deck that addresses the key elements of the product, market, how your product or service fits within that market, business model and team. If you're adjusting fonts to cram more information into your deck, it's too much.

It goes without saying that you should practice, practice, practice. Try out your pitch on your mentor or a friendly peer, as your executive team is drinking from the same Kool-Aid pitcher.

Do your homework on who you are pitching, the investments they have made and, if possible, find a personal relationship through mutual friends, school, hobby or geography. Investors not only need to like the idea, but also the people behind the idea, so don't be all business and neglect the personal aspect of the pitch.

Never Claim to Have Everything Figured Out

Typically during initial meetings, investors are asking themselves: "Do I like these people? Are they going to be easy (and fun) to work with? Are they creative? Are they smart? Are they confident but humble? Can they overcome adversity? Will they figure it out? Will they find and hire the right people? Have they ever done something like this before?"

Being knowledgeable about the market, space and players (without name dropping) shows your level of preparedness. Also, identifying what is not known but can be figured out is important.