Equity · Investor pitch

Pitch and fundraising consultant - what percent/compensation should they get?

Alison Lewis CEO/Creative Director

June 4th, 2014

I've been contacted by some pitch helpers. I'm not that great at it, been doing it for the past 2 months and can get the meeting, but want some help to move to the next stage and get financing.

I'll be working with a couple people to do the following:
Demo Day Talking Points
for our Demo Staff

I'm thinking of doing a straight up percent for the raise or a mix of raise and percent for incentive.

Anyone else ever do this? What do you suggest?

Jeff Axup Sr. Manager, Palo Alto UX Design Research Group at Bosch

June 4th, 2014

I've done a number of formal pitches (hundreds informally) and we made it through a demo day at Wearable World. We're currently raising a seed round. Happy to collaborate offline and share tips if it's useful.

Jessica Alter Entrepreneur & Advisor

June 4th, 2014

You should either pay them hourly or make them an advisor.  They are only a small part in whether you actually get money. FWIW, you should definitely be able to find advisors that are great at fundraising and will give you the feedback you need, either through FD:Advisors or if you're part of an accelerator they should be doing intensive pitch prep.

Rob G

June 5th, 2014

Alison, just to clarify, are you proposing that  these people would actually do the pitching for you or?  As a side note, investors often don't like the idea of a portion of their check going to pay consultants to help raise money.  i would second Jessica's comment. 

Alison Lewis CEO/Creative Director

June 5th, 2014

Rob. I have the same concern about money to outsiders. One of the people is an official advisor and will get percent. Is that alright? 

Alison Lewis CEO/Creative Director

June 4th, 2014

We have lots of advisors in the incubator and people giving advice all over the place. Looking for people who have a lot of experience who can bare down and work... that sounded. Been practicing and pitching for 3 months now, my tone is great, people like me, but I am not getting it in sync. 

I've practice pitched over 30 times and it's still missing some element that investors want to hear. I think you have to care about what they care about and I'm finding it difficult. 

I am looking for people that will take me through this process so I learn it firmly and quickly. Kind of a hands on tutor. 

Tim Parks VP of Growth at UpCounsel, Inc.

June 5th, 2014

There are lots of parts to "pitching" and I'm curious what part(s) you think you are not good at.  That will make it easier to prescribe a solution.  Are you able to excite potential investors enough to get them to sit down with you?  Are you not getting good feedback on your actual deck?  Are you having trouble taking the data and making a compelling case to show how this will grow?  Is it a public speaking issue?

Not trying to single you out here, but feel like breaking down the areas where you want to improve is essential as you are trying to ask anyone for help.  

Paying a firm to help you pitch is most likely not going to solve the problem(s) because you are going to have to explain your business to them, something that takes tons of time.  Failure is going to happen 99% of the time in fundraising, so I'd try to break it down into an iterative process as much as you can.

agree with Jessica Alter's points above.

Alison Lewis CEO/Creative Director

June 4th, 2014

sorry if that sounded brash.... didn't mean too! 

Bob Binder Member of Technical Staff at Software Engineering Institute | Carnegie Mellon University

June 5th, 2014

First, read and internalize Kawasaki's "The Art of the Start" - about $20 with shipping and handling. Develop your ten slides, then try that in front of every audience you can think of. Imagine yourself on Shark Tank and try to role play each of the inquisitors, or get your friends or others to do that. There are many non-fee advisors in my area - incubators, university projects, and government-related business development.  Most metro areas have the same. Find them and pitch them.

It sounds like you may have done some of that already. Are you certain your business has compelling investor value? Why can't you clearly communicate that?  

If you still think you need to pay for assistance, check out Chris Shipley - http://www.cshipley.com/  Take that as the gold standard, and compare others to her. Offer payment contingent on success - they get paid after you deposit the check from investors. Ask the prospective helpers for references of others they've helped who were funded. Also ask for references of those they helped, but who did not get funded. Have a nice long chat with each. If actual value is evident, I'd offer a flat fee you can afford or options that vest at a later liquidity event.- not a percent of the raise, unless they are absolutely essential to making the deal.

Rob G

June 5th, 2014

pitching is hard.  you are not alone in your struggles.  You need to have different pitches for different circumstances - a 30 second, a 2 min., a 5 min and a 10 min.  and different audiences - customers, investors, etc. So one bit of advice is don't try to do it all with one pitch.  As Tim P mentions above, if you can narrow down where you think you are struggling most that might help - Likely some pretty experienced 'pitchers' here on FD.  You could then schedule a G hangout or skype call and pitch to a small group of FDers and see what you get.  

Rob G

June 5th, 2014

Alison, yes, VC expect equity to go to advisors, no issues there - their interests are aligned with the company's. Try to keep the number of advisors reasonable to keep the cap table as clean as possible.  The issue they have is taking their cash and paying that out to consultants/advisors who help you raise cash.  Not a deal breaker but it will raise eyebrows.