Oren Klaff is Director of Capital Markets for the investment bank Intersection Capital, where he raises tens of millions of dollars from investors and institutions. Intersection Capital has grown to $250 million of assets under management by using Klaff’s pioneering approaches to raising capital and incorporating neuroscience into its capital markets programs. He is a specialist in financial modeling and the codeveloper of Velocity, a capital markets product that has raised more than $100 million of private equity and venture capital.

PITCH ANYTHING

McGraw-Hill

Contents

Chapter One

Here's the "big idea" in 76 words: There is a fundamental disconnect between the way we pitch anything and the way it is received by our audience. As a result, at the crucial moment, when it is most important to be convincing, nine out of ten times we are not. Our most important messages have a surprisingly low chance of getting through.

You need to understand why this disconnect occurs in order to overcome it, succeed, and profit. This book tells you how.

I Am Not a Natural

I pitch deals for a living. My job is to raise capital for businesses looking to expand rapidly or go public. I am good at it. When companies need money, I get it for them. I have raised millions for deals involving Marriott, Hershey's, Citigroup, and many other household names—and I continue to do so at a rate of about $2 million per week. From the outside, the reasons for my success seem simple: I offer wealthy investors profitable deals that involve Wall Street banks. But others do that, too. Yet I raise a lot more money than they do. They compete in the same market. Do the same types of deals. Pitch the same kinds of facts and figures. But the numbers show I am consistently one of the best. The difference isn't luck. It is not a special gift. And I have no background in sales. What I do have is a good method.

As it turns out, pitching is one of those business skills that depends heavily on the method you use and not how hard you try. Better method, more money. Much better method, much more money. It's no different for you. The better you are at advocating your position, the more successful you will be. Maybe you want to sell an idea to investors, convince a client to choose you over the other guy, or even explain to your boss why you should be paid more. I can help you get better at it using the five methods in this book.

Pitching a Master of the Universe

Over the years, I've pitched to—and closed deals with—some of the iconic businesspeople of our time, including founding members of Yahoo!, Google, and Qualcomm. But the story of what I can offer you cannot really be told without my explaining the day I went to pitch one of the guys Tom Wolfe would describe as a "master of the universe."

"Jonathan" (never Johnny or even John) is an investment banker who controls vast sums of capital. He gets between 600 and 800 pitches a year; that's three to four every business day. He often makes multimillion-dollar investment decisions based on no more information than a few e-mails on his BlackBerry.

As a dealmaker, this guy—and I have absolutely no intention of giving you his name; he sues everyone and anyone at a moment's notice—is the real deal.

There are three things you must know about Jonathan. First, he's a math phenom who can calculate yield curves in his head. He doesn't need spreadsheets. He can instantly analyze what you are pitching him. Second, he's seen more than 10,000 deals and can detect any kind of flaw or BS no matter how well hidden. Third, he's tough talking and, at the same time, witty and charismatic. The upshot: When he's pitching you, his chances are good. When you're pitching him, yours aren't. Yet, if you want to be taken seriously in venture capital, you need to have done a deal with this guy. And so, some years ago, when I was working to raise money for a software company, I arranged to pitch Jonathan and his investment team. Given their reputation, I knew if I got them on board, it would be a lot easier to raise money from other investors who were still undecided. They'd say, "Hey, if Jonathan signed off on this, then I'm in too." But Jonathan knew the power of his endorsement—and he wasn't going to give me an easy win.

As my pitch got underway, he made things difficult. Maybe it was for sport. Maybe he was having a bad day. But it was clear he wanted to take—and keep—control of the whole presentation. I didn't realize this at the start, however, so, I began, as I always do, by framing (frames create context and relevance; as we will see, the person who owns the frame owns the conversation). I explained exactly what I would—and would not—be talking about, and Jonathan immediately started giving me a type of resistance called deframing, which is exactly like it sounds.

For example, when I said, "We expect revenues to be $10 million next year," he cut me off and changed the frame with, "Who cares about your made-up revenue projections. Tell me what your expenses are going to be."

A minute later, I was explaining, "Our secret sauce is such-and-such advanced technology."

And he said, "No, that's not a secret sauce. That's just ketchup."

I knew not to react to these comments. I pressed on.

"We have a Fortune 50 company as our largest customer."

He interrupted with, "Look, I'm done here in nine minutes, so can you get to the point?"

He was really making it difficult. You can imagine how hard it was to use all the right techniques: setting the frame, telling the story, revealing the intrigue, offering the prize, nailing the hookpoint, and getting the decision.

Collectively, I call these the STRONG method (you will learn about these soon).

Some 12 minutes after I began, what I had hoped was going to be my best pitch ever instead showed all the signs of being my one of my worst.

Put yourself in my situation. After just 12 minutes of your presentation, you've been told that your secret sauce is ketchup. Told that your projections are made-up numbers. And that you have nine minutes left to actually make a point.

I was faced with the presenter's problem: You can have incredible knowledge about your subject. You can make your most important points clearly, even with passion, and you can be very well organized. You can do all those things as well as they can be done—and still not be convincing. That's because a great pitch is not about procedure. It's about getting and keeping attention. And that means you have to own the room with frame control, drive emotions with intrigue pings, and get to a hookpoint fairly quickly. (Details on those last two in a second.)

I reminded myself of these steps in the face of Jonathan's interruptions. Then I swallowed hard and hoped my nervousness wasn't showing. I went back to my pitch, concentrating on my three objectives. I was determined. When he deframed, I reframed. When he looked disinterested, I delivered an intrigue ping (this is a short but provocative piece of information that arouses curiosity): "By the way, an NFL quarterback is also an investor." And finally, I got him to the hookpoint, the place in the presentation where your listeners become emotionally engaged. Instead of you giving them information, they are asking you for more on their own. At the hookpoint, they go beyond interested to being involved and then committed.

At the end of the 21 minutes, my pitch was complete. I knew Jonathan was in. He leaned forward and whispered, "Forget the deal for a moment. What in the hell was that? Nobody pitches like that but me."

I tried to show no emotion as I told him, "That, in general terms, is called...