How To Pitch VC Funders

If you ever get the opportunity to help a client pitch venture capital funders, go for it. Even if you don’t actually shake loose some greenbacks, the experience and feedback are priceless.

I had such an opportunity at a VC event. One of my clients is bringing to market rare fruit including an all-natural sugar substitute and a taste modifier whose users include cancer patients. Talk about a fantastic way to change the world!

Well, we made it to the final four among some two dozen pitch makers, but ended up losing to some cute young ladies peddling lingerie. But I’m getting ahead of the story.

Let’s face it. The majority of business owners and C-level executives may be brilliant business people, but they don’t know how to pitch the short-attention-span VC crowd. So lots of coaching and “media training” is required. I say media training because it’s all about how to present top-line information and make it easy to grasp.

During the event held in Manhattan, we had five minutes or less to make our case to each VC person who came to our table, round-robin fashion. While it wasn’t exactly “Shark Tank,” we were in some rough waters. Here are a few takeaways:

-Keep the pitch in layman’s terms and easy to understand. Imagine you are presenting to your mother.

-VCs want the macro level, so refrain from industry jargon and technical details. One of them barked at my colleague, “I don’t want to hear about kilograms!”

-Overselling backfires. VC’s won’t be impressed that you are marketing to “everybody.” They want to know you have a grip on reality and have effectively defined your target market.

-Products or services that are in pre-revenue mode are really up against it. The folks we were pitching wanted to invest in companies that are already bringing in money.

-Don’t be afraid to rearrange your pitch space to your advantage. The original table layout had us with our backs to most of the room until I commandeered more space, moved some things around and gave us a more feng shui power position.

-Dress in a business suit (most of the VCs were men in suits or jackets and button-down shirts) and toss in one item of eye candy, in my case a necklace with a big, colorful stone.

Fortunately, we did get some amazing feedback after making it to the final four. Backed by what we learned, we’re giving it another go with VCs next quarter. Hopefully, this time we’ll have some revenue to talk about. I’m convinced this was a major advantage the cute little lingerie ladies had over me and my client. They could cheerily proclaim, “We took in 20 grand last week!”

Don’t get me wrong. I would have bought their stuff in a heartbeat.

(This post appeared in Media Post's Marketing Daily)

Top Takeaways from Ad Age’s Small Agency Conference

It's nice to see other professionals expound upon themes you feel are important. Small and mid-sized agencies wanting to stay competitive should take note of some key observations made by top professionals at Ad Age's Small Agency Conference in Minneapolis.

1) People make the agency - David Bell, former CEO of Interpublic and Michael Keller, CEO of Pearson Candy Co., emphasized matching hiring policies with an agency's culture. Bell said, "If you're going to grow an agency, build the culture first." Decide who you are and who you want to be as an agency. Knowing your culture helps you add personnel who accentuate and strengthen it rather than try to take it in another direction. He stressed, "Bad cultural influences will ruin agencies faster than anything." The wrong person, especially in a senior management position, creates a drag on the agency's momentum, poisons the work atmosphere and creates conflicts with clients. It's less expensive to pass on a potential hire than have to buy your way out of trouble later.

2) Small improvements - Most of us would be doubtful about seeing a 100% increase in client base, market share or earnings within 70 days. We doubt because we forget the power of compounded incremental change. Taking the philosophy of Bradley Wiggins, who attained a historic Tour de France win, we only need a 1% improvement each day to reach that goal. Breaking a huge goal up into a series of manageable, attainable goals we meet each day means constant improvement and make them more likely to last when the final goal is met.

3) Befriend agency competitors - A questioner asked about the advisability of small agencies working with other agencies, such as those with expertise in specific areas like PR or media, when presenting a pitch to potential clients. An agency consultant answered that collaborations between agencies could be very effective in the right circumstances. Rather than revealing a weakness to a client, the agency demonstrates its honest assessment of what it can deliver, which clients appreciate, while offering a ready made solution for a comprehensive campaign. It requires extensive meetings with the partnering agency, but shows an agency's ability to work effectively with other teams.

4) Take Risks - Michael Sprague, VP of Marketing and Communications for Kia, presented a concrete example of how risks, something he's pushed into the carmaker's marketing culture with the assistance of his agencies, can pay off. Three years ago Kia launched a campaign targeted at millennials that resulted in a massive sales spike. Since 2008, Kia has seen a 78% sales increase. The risk? Robotic hamsters. "Continue to push the envelope with your clients," he said. "There are no bad ideas. ... After all, we came up with hamsters."

5) Brand your agency - David Bell pointed out the irony that while agencies do a fantastic job of positioning their clients, the do a "horrible" job of doing the same for themselves. When you go before a client, you need not only demonstrate your ability to get their brand out front, but also make a clear statement about your brand. How is it going to stand out against the others? What does your agency bring to a campaign the others can't? He said agencies need to provide "proof points" that illustrate their position. If you don't, your agency is going to be indistinguishable from all the others. If you can't present your own brand effectively, then how can you claim effectiveness in presenting their brand?

I think the last point encompasses the others. In order to compete, smaller agencies must sell their brand. Their brand, who they are, is created by a common culture that runs from top to bottom and includes the confidence to make incremental changes, work with other professionals and push the envelope for their clients.

For more insights on Ad Age’s Small Agency Conference, see the report.

Laid off Launching Pad

Maybe now is the time to start your own business, or go out on your own.

Some of the greatest companies started in an economic downturn. William Hewlett and David Packard joined forces in the 30s Depression and started their research, development and manufacturing in the back of a 12x18 garage, which became the birthplace of Silicon Valley. Bill Gates dropped out of Harvard during the 1975,70s recession to start Microsoft. 16 of the 30 companies that make up the Dow industrial average) were started during a recession or depression, including Procter & Gamble, McDonald's, General Electric, Johnson & Johnson, Hyatt, LexisNexis and CNN.

Start-ups aren’t easy and don’t always survive; about 60% fail before the first 5 years. Most start-ups remain small. About 60% of the USA's 5.9 million small businesses have fewer than five workers.

Business start-ups soar when the economy tanks, mostly because many laid-off workers have nothing to lose and pursue self-employment. This positively affects the economy: small businesses create 75% of new jobs.

If you’re not ready to start a business, you might want to consider freelancing opportunities. It’s an easier sell for companies, looking for spot talent reluctant to increase a payroll. Your former employer may be your first client. I know tons of highly talented, successful marketing freelancers who love the flexibility.

Check out the book, Free Agent Nation: The Future of Working for Yourself from Dan Pink, contributing editor at Fast Company. This groundbreaking book on "How America's New Independent Workers Are Transforming the Way We Live" and the death of large economy will change your perspective of “career.”

I went through 4 mergers in 2 years, before I started Smart Solutions. Formerly a Vice President at top ad agency, Lowe Lintas, I was laid off in 2001, right before September 11th. While I doubt I would have had the guts to relinquish what was a perception of security to forge down the uncertain pathway of starting a new business, it ultimately proved to be incredibly more satisfying, fulfilling and lucrative.

It takes dedication, discipline and serious persistence. Most people give up too easily. Need inspiration?

Thomas Edison tried a thousand different elements to come up with the right material for a light bulb that all failed. When asked if his time had been wasted, He replied, “Hardly…I have discovered a thousand things that don't work.” Founded in 1876, General Electric is the third largest company in the world.

A broke Colonel Sanders offered his only asset—a great chicken recipe—to over a 1000 restaurants for free, in exchange for percentage of sales. Through constant rejection, he spent two years driving across the country and sleeping in his beat-up car. On his 1,009th sales visit, one restaurant finally accepted his offer. Today, KFC has over 11,000 restaurants in 80 countries.

Walt Disney was fired by Kansas City Star newspaper editor for not being creative enough. He was also turned down 302 times before he got financing for his dream of creating "The Happiest Place on Earth" All the banks thought he was crazy. Today, Disney is a global media and entertainment conglomerate.

Gabrielle (Coco) Chanel was shunned from society because she wasn’t educated or classy enough (how wildly ironic is that?) She spent years in poverty, trying to sell her original hats. She eventually got a business partner who funded her first storefront. She built Chanel in wartime, defied trends by developing "basic" clothes with comfort and elegance that women wanted and revolutionized the fashion industry.

My advice to survive and thrive?
- Be prepared to be in it for the long haul.
- Articulate a real differentiator and unique sales proposition.
- Always under-promise and over-deliver.

Most people give after making a handful of unsuccessful sales calls! Not many could survive the constant stream of rejection and struggle. A common theme in successful people is that they never give up. Do you have a dream that hasn’t been realized? Sometimes change can be a good thing. And it might just be the best thing that ever happened to you.



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