Oodles.com founder Steve Sherlock has set himself the goal of raising a multimillion dollar Series A funding round by the end of January 2010. He is documenting his trials and tribulations and seeking feedback from readers on AnthillOnline.com. This is the sixth post in his series.
Week 6: Life’s a Pitch
This week I’ve focused on refining my pitch down to just six words.
It’s only taken five years, hundreds of hours of debate with my brother and countless networking conversations, but finally I think it’s almost succinct enough.
For me, whether it’s speed dating or a business proposition, a great pitch should help others understand your vision and get them excited about it as quickly as possible. For some reason my spiel has never generated that much enthusiasm in the speed-dating world, but the business environment is different (I hope).
Generally speaking, my pitches usually follow a formula, which explains (in order) the following:
- What does the product or service do?
- What problem does it solve and for whom?
- Who are we and specifically why do we believe we’ll succeed?
- How will we make money?
- How will we bring it to market?
- And how are we most likely to exit?
If I meet a potential investor, I tend not to do a PowerPoint presentation. Instead, I just have a conversation through the above points. If they are interested I will leave a printed version of the PowerPoint and an IM (Information Memorandum).
Then I give them a week to read and digest before calling them for any feedback.
I also have two versions of the conversation. One for investors and the other for strategically aligned companies. I make the point to both that we might need another round of funding before we get aligned with a strategic partner.
I’m also cognisant of the fact that some strategically-aligned investors may prefer an acquisition. As it was pointed out to me recently, there are ways to deal with this. For example the opportunity could be for a strategic investor to buy ‘X’ percent now, and then lock in to buy the rest in several years time using a multiple of earnings formula. This way they take less risk upfront and you have the opportunity to build value for existing shareholders with the help of a strategic investor.
Investors often say, “You’ve got to kiss a lot of frogs before you find a prince.” Not sure what the equivalent is for entrepreneurs, suffice to say you’ve got to be prepared to have a lot of conversations before you get invested in. I see the goal of each conversation as being not necessarily to get an investor, but rather to practice the pitch and continually gather helpful feedback.
I’ve done a number of pitches so far and got some nibbles, but I’ve got many more to do. I won’t do a running commentary on all of them, however, because I don’t want to jeopardise any ongoing talks.
What I will do, in my last post for the year, is leave you with my six-word Oodles pitch: “Car rental comparison for loyalty members.” Yes, yes, brilliant I know, though keep your cheque book in your pocket for now.
Let me know your feedback or any wisdom you can impart on the business pitch (or ways to improve my speed-dating performance).
See you in January and in the meantime have a great Christmas and New Year.
Steve Sherlock is co-founder of Oodles.com, one of Australia’s leading online car rental aggregators.
