Pitch is vital for business success

If you're going to be successful getting your new business off the ground, you've got to know how to pitch.

And no, we're not talking about the great American pastime and the speedy and accurate delivery of the ball across home plate. We are talking about what an entrepreneur needs to do to raise capital, recruit and hire key employees, convince customers to buy products or build an important strategic partnership with another firm.

The ability to "pitch" — to communicate with clarity, create passion and secure commitment — is one of the key attributes of an entrepreneur.

Not too long ago I saw how important this ability could be when I had the opportunity to work with a young entrepreneur as he was formulating his business plan and later as he began to raise capital and organize his business. At first glance, he seemed an unlikely candidate to found a technology company. After all, he was coming directly out of an undergraduate education in history. But he was able to erase any handicap created by his young age or limited experience with his ability to pitch. Within a few months he raised $2 million in angel financing, built a small team and secured his first customers. Within a year he raised an additional $4 million after receiving multiple term sheets from several venture capital firms.

The investment pitch has become so common that most investors have an expectation of how it should be delivered and what it should include. After sitting through hundreds or even thousands of presentations, many investors find it unacceptable to sit through a pitch that is lacking in content or is delivered poorly.

Will Price, a partner in a West Coast VC firm, suggests that every pitch to investors include such information as: what we do, who we are, how we plan to make money, what we are asking for (how much money), a product or service demonstration, market analysis, competitive assessment, business model, financials and targeted milestones.

Once the presentation is developed, the next step is to concentrate on the delivery. In "The Art of the Start," Guy Kawasaki agrees with the number of slides that should be included in a PowerPoint-type presentation. He goes one step further with his "10, 20, 30" rule: 10 slides delivered in 20 minutes with a minimum font size of 30.

Many professional investors believe that the objective of the initial pitch meeting is to get to a second meeting. An investor cannot be expected to approve the deal after the initial presentation; therefore, gaining a commitment to move on to a subsequent session is crucial to building the relationship.