In my last post, I talked about two types of pitches: the elevator pitch and the full pitch. There’s a reason why I left out phone pitches. Fred Wilson, in his blog on phone pitches, expressed how he feels about them: “they aren’t very effective. I hate taking them and almost never do. I don’t think they allow the entrepreneur to show themselves very well which is the most important thing of all.” My sentiments exactly.
For me, doing a full pitch on the phone is very much like going to an interview without an appointment. It’s an exercise in futility.
Investors are very busy people. I always mention this—that is, if you haven’t already noticed—because I am of the opinion that if entrepreneurs understood this, they’d be able to avoid wasting their time and energy. And they’d make the world a better place for investors as well.
Investors typically get lots of calls a day. Let’s say 50 of those calls are 30-minute pitches. A 24-hour day then wouldn’t be enough to take each of those calls, would it? Therein lies the dilemma of phone pitches.
So, should entrepreneurs stop making calls?
Sarah Tavel, in her blog post “In defense of phone call pitches,” said that entrepreneurs shouldn’t avoid them altogether. She thinks that “they are a great first step.” For her calls are “not about a go/no go on an investment,” they are “about a go/no go on investing more time.”
To this I agree. Although I feel strongly against doing full pitches on the phone, I think that phone calls are a great opportunity to introduce your company and to let investors know of the opportunity. But keep the phone calls short. Remember the elevator pitch? You can use it to introduce yourself and to spark the investor’s interest. Investors often use it as a gauge. If they express interest, then you could set up a meeting for a full pitch.
Wilson has a similar thought: “I do think a short phone call introducing the opportunity at a very high level and making the case for an in person pitch is an important thing to do. You can accomplish that in a few minutes or less. It’s basically an elevator pitch. But don’t agree to do the whole pitch on the phone. Ask the investor make time for you in person to do that. That will determine if they have sufficient interest for you to invest your time with them.”
Phone calls may even help investors in the screening process. It would take an investor about ten hours to sit through ten full pitches. And 90% of this would have been a waste of his and the entrepreneurs’ time. If they called in first, then the investor would be able to tell from their elevator pitches which ones he’d like to hear a full pitch from. It would have taken him only 20-30 minutes to screen ten deals. And he would have spared himself from 9 grueling hours of bad pitches.
In summary, phone calls should NOT be about doing a full pitch. An elevator pitch would suffice. Audrey Watters, in her post The Phone Pitch: Should You Make the Call?, consolidated Tavel’s and Wilson’s posts with, “Think elevator speech. The goal of the call is several-fold: To introduce yourself. To assess an investor’s interest. To set up another meeting (preferably face-to-face).”
So remember. Keep the phone calls short and have these goals in mind:
- Introduce yourself
- Determine whether or not the investor is interested
- Set up a meeting for a full pitch
Overall I still believe that networking and building relationship with the investors and their inner circle is the best method to get investors attention. I have discussed this in my blog Quality of Deal Source: Why It Matters to Investors. Try avoiding “cold calls” to make an introduction, it always never work. And when you have an opportunity to have a call please exercise the above.