I say no to almost all of the pitches that come my way, but the few “yeses” really stand out.
6 min read
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Whenever its possible, I tell first-time entrepreneurs to bootstrap their own business ideas. If you want to be an entrepreneur, create something you can sell as soon as possible and start selling. That, or find an existing product to flip. Either way, there's nothing that can replace the in-the-trenches experience of getting out there and selling to the masses.
Still, there are certain ideas that can only become a reality with investor funding. Or maybe you have a product or service that's humming along, but you're hoping to accelerate your growth with the insight, mentorship or funding from an industry expert.
I've been pitched before on several different business ideas and said no to almost all of them, but some of those "yeses" that worked out have led to great opportunities both for the businesses I've invested in and for me. Plus, I started my first few businesses with the help of my mentor-turned-investor Jim Franco, so I've certainly benefited from these kinds of partnerships myself.
That's why today I want to give you my best advice on how to pitch your business, product, service or idea to industry experts, based on my experience sitting on both sides of the table.
Know the risks.
First of all, understand that partnerships of any kind are a huge risk. If you're going to start any kind of long-term partnership with your investor, you need to be crystal clear on the roles and responsibilities of every party involved.
In fact, in almost every case I can think of, I would recommend asking your investors/mentors/partners for a one-time loan which you promise to pay back with interest. And if they want equity, give them enough to have a solid payout, but not enough where they can claim significant ownership.
At the end of the day, you need to protect your position as the visionary for your business. You can accept help from others and still be the ultimate decision-maker. That's what you must do an entrepreneur, and the higher status or greater available funds of your mentor/investor doesn't change that.
Don't let the fear of failure fool you into thinking they will be the "man on the white horse" who will save your business when things get shaky. That's your responsibility. Whatever adversities or failures show up on the road to success are there to teach you, and you're robbing yourself of experience if you don't charge in and face them yourself.
Build a relationship first.
Have I given you enough of a warning yet? If you're still interested in pursuing an industry expert to be your investor or mentor, understand that you're playing the long game. It's extremely rare for a starting entrepreneur to approach an expert and win her over with just one pitch meeting.
In fact, if you do get the chance to speak with an expert, you absolutely should not lead with a pitch! That will immediately set the tone for a transactional relationship. You don't want that, because there's no way you can afford to buy out the expert just yet.
Instead, focus on building a genuine relationship with experts first. Once you get their attention, ask them how you can help them and don't expect anything in return. Better yet, do your research ahead of time, find out what they need and give that to them before they can even ask for it. That will put you in an entirely different category than the thousands of clueless wannabes and beginners who bombard them with pitches every day.
For example, I had one guy approach me out of the blue and say, "Hey Bedros, I'm an Instagram growth hacker and I noticed your official Instagram account for Fit Body Boot Camp could use a lot more followers. If you could give me access to it, I'll grow your following for free."
Sure enough, he brought us a ton of new followers on that account, and now he's helping us out on several different paid projects. Because he proved himself first and came to me with a giving hand, I'm happy to keep giving him bigger and better opportunities.
Prove you can connect with future buyers.
This is a true masterstroke when it comes to pitching. If you can show your potential investor or mentor that you already have an audience of qualified prospects who are eager to buy, it becomes almost impossible for them to tell you "no."
One of the most amazing examples of this I've ever seen comes from Jesse Itzler, who was kind enough to share this story on a recent episode of my podcast. When he was first creating his concept for Marquis Jet, he and his partners sat down and came up with everything they would want from a private jet service and put that into a business plan. Then, since they didn't have any jets and didn't have the money to buy their own jets, they looked around for who they could pitch this idea to.
They settled on the "800-pound gorilla," which was Warren Buffet's NetJets, which had the largest fleet of private jets in the world. At the first pitch meeting, the CEO told them "absolutely no way," but then his partner came running out after them and told them he'd get them a second chance.
At the second pitch meeting, Itzler and his partners brought in a focus group of eight potential prospects for Marquis jet, including Run from Run DMC, a professional athlete, and a powerful female real-estate mogul. One by one, all eight of them stood up and explained why they would never bother buying a traditional fraction with NetJets, but they would absolutely buy a jet card through Marquis Jets. Itzler and his partners ended up closing the deal and doing several billion dollars in business before selling the company.
At the end of the day, closing an investor or mentor on your idea comes down to the same basic need you have to answer when selling to a client or customer: You have to create certainty that what you have to offer will work. There's no better way to create certainty than to present a dramatic demonstration of proof right there in front of them. Seek out ways to create dramatic demonstrations like this, and you will attract the people you need to build your empire.