Make your business pitch compelling

John Aguilar —Contributed photo

John Aguilar is a serial entrepreneur and the founder and host of business reality TV show “The Final Pitch.” He won a Mansmith Innovation Award in the business model category. His new book, “The Art and Science of the Pitch,” cites valuable lessons, tips and techniques picked up from years of producing and hosting the pitching show, and interviewing experts across the globe.

Q: In your years of producing “The Final Pitch,” what have you found that makes a pitch most compelling to investors?

A: The most compelling pitches come from people who are out to solve a problem that they themselves are intimately involved in and want to solve. This usually comes from a close association with their “why” or perhaps a pain point they themselves want to alleviate and where they see an opportunity. I’d be lying if I said showmanship did not play a factor because the messenger sometimes has as much to do with the success of a pitch as the message.

Sincerity and commitment, however, always trump showmanship. At the end of the day, a successful pitch presents a problem that the entrepreneur is in the best position to solve, with the entrepreneur having done the work and with a minimum viable product to show for, with a solid team that has shown a solid track record in the domain or related field they are solving the problem in.

The best investors know how to see beyond the charisma and the fluff, and dig deep into the ability of the entrepreneurs to deliver on their promise or potential. Some of the most successful pitches I’ve seen came from entrepreneurs who had spent a considerable amount of time, resources and effort to gain deep knowledge and expertise in the industry they are trying to affect change in. They have engaged their market, and in some cases, probably have tried offering a related product or service that has given them the level of insight and knowledge to now come up with their current offering. The worst pitches are the ones that just present a theory or thesis with little research, work and engagement done in the industry.

Q: How do you handle the so-called endowment effect, where owners tend to think the value of what they have is much much more than the fair value?

A: It always helps to put yourself in the shoes of the buyer or client you are pitching to. At the end of the day, the buyer/client/audience is always looking at what you have and asking the question, “why should I care?” Oftentimes, we are so enamored with what we’ve built that we don’t ask ourselves the question that will make them not just believe in but embrace what you have. But rather than argue what “fair value” is, I would much rather venture the idea of how to build a product that is uniquely positioned not just to solve a problem well, but to create a totally new product or category altogether.

If that is the case, the conversation then shifts from fair value to, “how can I have it?” Steve Jobs was a master at this, and I think sometimes we need people like that who can push the value of things beyond anything that came before it, perceived or otherwise. As George Bernard Shaw once said, “The reasonable man adapts himself to the world; the unreasonable persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

Q: What kind of businesses may not benefit from being pitched to outside investors?

A: Businesses that are not ready for transparency and a degree of openness to advice should not even consider outside investment. Getting outside resources and inviting people to be part of your capital table necessitates opening your books, and being above board with your business dealings and plans. Ideally, the investors you will be bringing in are providing “smart money,” possibly market insight, access to customers and networks, and other resources that can help you grow.

If the above are not considerations for you, you would be better off perhaps taking out a loan, which can come off cheaper as you retain your stake in your company. If the investment is not strategic, investor money is the most expensive as you lose a degree of autonomy and ownership in your company.

Q: After a successful pitch, what are the common obstacles or problems faced by entrepreneurs that stall the investment or prevent the business from growing? What should investors be on the lookout for to anticipate this or to guide the entrepreneurs in avoiding this?

A: For the entrepreneur, be clear with what you want and what you are asking for. Be specific on the exact amount of investment you are seeking and/or form of support, and for how much percentage of equity in your company you are willing to give up for it. You should be clear with your usage of the funds; and all preliminary due diligence documents and information needed to be presented should be in a data room to make due diligence seamless for both parties.

Assuming you’ve ironed everything out and the term sheet is signed, make sure that the next steps are clear and that there is a clear timeline of agreed milestones and deliverables from both parties. Investors should also be prepared that the entrepreneurs may not be in sync with the investors’ own processes and corporate culture, and must exercise restraint to not make this a sticking point. Both parties can learn from each other if they both know and recognize where the other is coming from. They can equally learn a lot from each other and should be open to considering different points of view and ways of doing things.

Q: You won in the business model innovation category during the second Mansmith Innovation Awards. Please share what makes the business model of “The Final Pitch” different from similar popular shows abroad. Are you planning to change your business model soon?

A: The show closest to “The Final Pitch” is the highly successful business reality show “Shark Tank” in the United States, where judges invest in startups who pitch to them. In those shows, the producers of the shows pay the judges to be part of the cast, and the judges then use their own money and resources to invest in the entrepreneurs who pitch to them.

In our show, instead of us paying the judges, we flipped the model and have the judges pay us a seat fee—essentially making them coproducers of the show. We call ourselves a “SAAS” company, but instead of “software as a service,” we are a “show as a service,” with our primary clients being the judges and other companies who collaborate with us.

Why would the judges pay us? Through “The Final Pitch,” we are able to provide a funnel of the best startups to our investor-judges. These startups, by virtue of pitching on the show and getting an investment, are getting a head start in the public consciousness and in many instances, are able to get additional funding and partnerships outside of the show because of their exposure on “The Final Pitch.” So any investment our judges make on the entrepreneurs is like putting gasoline on the fire because of this multiplier effect. Our show is also unique because we give our judges a platform to communicate to the public what they’re all about.

Apart from the pitching component of the show, we also feature the businesses and personal brands of the judges through dedicated “investor episodes,” allowing them to be seen by the viewers who then learn from their stories of success. It is a great way to position their personal brands and thought leadership, and in some cases, their legacy and what they’ve built and will pass on to the next generation.

Ultimately, the audience of the show can learn from the pitches of the entrepreneurs and our judges’ stories of success, and be inspired to take on entrepreneurship themselves. We are intent on bringing this business model across the globe beginning with “The Final Pitch Asean” to be filmed in Singapore by next year, where apart from the Philippines, we will involve Singapore, Indonesia, Thailand, Malaysia and Vietnam. We will make “The Final Pitch” a global show proudly created by Filipinos, for the global audience. —contributed

Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. and cofounder of the Mansmith Innovation Awards.