Pitching: Five reasons NOT to invest!

Pitching: Five reasons NOT to invest!

It’s 2011. Rufus Grimson sells his company to Disney for 40 million dollars. He pitched with an unusual opening technique, the same that earned him 3,3 million investment dollars two years earlier.

Pitch the unexpected

When Rufus had to convince venture capitalists to invest in his online magazine Babble, he started his pitch with a slide they hadn’t expected. Usually pitches start off with the standard “problem”, that immediately clarifies the relevance of the solution. Worse pitches start off with a bulletpoint slide: Today I’m going to tell you about *, * and *.

Rufus caught the attention of all prepared-to-be-bored investors showing a “top 5 reasons NOT to invest in Babble”.

How disadvantages strengthen your story

Although it obviously feels counter-intuitive to start off with the cons to your great idea, here are three reasons you might want to consider mentioning them:

Enarmor your sceptics

Pitching new ideas brings a sceptical crowd. Scientific research from marketing professors Marian Fristad and Peter Wright states that when people are aware that someone will try to convince them, they automatically shield themselves. Their mental state will start focusing on the holes in your theory.

By – unexpectedly – starting off with the disadvantages, you change your criticasters in allies. You’re not selling them something, you’re offering to solve a puzzle for them.

You gain credibility

Being honest about the obstacles and risks that your company has to overcome, immediately makes your story more credible. You come across as humble, rational and most importantly helpful. An important part of the investor’s job is to unravel the wrongs and risks of a business model. By already naming them, you save them a lot of research and time.

Your IQ raises a few points

Not officially, of course. But in an interesting experiment Teresa Amabile let people rate the intelligence and expertise of book critics. Reviews from the New York Times were adapted in tone of voice – to solely positive and others more critical.
The outcome? The “critical” critics were thought the most intelligent by 14% and would have 16% more literary expertise. Therefore naming a few weaknesses makes you a smarter person.

Apply this succesfully

Naming disadvantages enarmors sceptical thinking and makes you gain both credibility and IQ. That’s why this tactic is a great technique for an opening step. Side-note: Don’t forget to follow up explaining why your idea is beyond worthwhile regardless!