A Successful Pitch May Come Down to Your Words
What to Say and What to Avoid
Lately, we’ve been talking a lot about pitching investors. We talked about the importance of your story coming through loud and clear and why you need two pitch decks. And with all this “talk,” it now comes down to your actual words.
You have a limited time to tell your story and make the best impression. Knowing what will resonate with potential investors, and perhaps, more importantly, what will not resonate with them, can make all the difference in whether you receive funding. Even if your pitch deck is perfect, it can easily be derailed by poor word choice. How you choose your words says a lot about you, your views on your business, and how you would fare as a potential partner.
Overall, your pitch will tell your story, including information about the problem (briefly), target market, revenue or business model, early successes and milestones, customer acquisition, team, financials, competition (briefly), funding needs, and exit strategy. As you’re talking about each, there are words and phrases you should avoid, as what the investor hears when you say them will be entirely different than what you intend. Take the following chart as an example of some of those situations.
|Words/Phrases to Avoid||What the Investor Hears/Thinks|
|Buzzwords (i.e. disruptive, visionary, innovative)||Disingenuous; insincerity|
|Solo entrepreneur||No one can do it alone. This person will burn out.|
|No competition||No market or you have not done your research|
|Guarantee||Amateur – there are no guarantees in investing.|
|Any word or phrase you cannot explain well||Unprepared|
A Quick Note on Buzzwords
People tend to use them because they think it will make them sound like they know what they’re talking about. But those people aren’t fooling anyone, particularly sophisticated investors. A “buzzword” is defined by Merriam Webster as “an important-sounding usually technical word or phrase often of little meaning used chiefly to impress laymen.” By the definition alone, you should see why you should exclude them completely. You want to impress the investors (who are not laymen) the right way – with legitimate numbers and proven strategy, not by trying to sound impressive.
Powerful Words/Phrases that Strengthen Your Story
Instead of the above words and phrases, focus on the following powerful ones that show you mean business:
- Customer Acquisition Cost (CAC) – explain how much your customer acquisition strategy costs and how it can be reduced over time.
- Lifetime Value – explain how your customers will eventually cover the cost of operations.
- Churn – explain how efficient you are about retaining your existing customers (eventually generate enough value to pay back their acquisition cost and help you generate a profit).
- Burn Rate – explain how much cash you have remaining to operate and how efficiently you are operating your business.
- Cost of Goods Sold (COGS) – explain the sum of all costs that go into offering your product.
- Gross Margin – explain how well your business is performing.
- EBITDA – understand what this means and have projections to back it up.
- Use of Proceeds – explain how the investor’s money will be spent and make sure it is not to increase the existing C Suite or Founder’s salary.
These are the terms investors want to hear. Not only do they demonstrate that you know your business inside and out, but they also give more credibility to your numbers. A win-win for investors!
Other Pitching Tips
Now that you understand the words and phrases to avoid and those to focus on, other pitch tips include:
- Stay professional
- Be on time and respectful of your time limit. Show that you value the investors’ time.
- Be confident, but not arrogant.
- Focus on the solution, not the problem.
- Don’t attack the competition. Instead, focus on your strengths.
- Think and talk long-term. Investors are not interested in quick wins. They’re looking for companies that are going to make an impact on their industry.
- Communicate your “why” passionately and infectiously.
- Understand that there is a difference between creating a great pitch deck and creating a great pitch.
Going into any pitch is a nerve-wracking experience. Even with practice, you may struggle to find the right words, which is why focusing on them from the start is so important. There are many available pitching tips out there, but word choice alone can make or break the deal. At the very minimum, they can give some extra positivity, and who doesn’t need that on pitch day?
Barker Associates has extensive experience with assisting companies in preparing their pitches, including the keywords they want to use (and to avoid). Schedule a free 30-minute consultation with this link to my calendar to talk about how we can work toward getting you the investment money you need.