How to Run an Effective Pitch Process
You should run a disciplined pitch process.
An effective pitch process is all about preparation, communication, and execution. There are a few key parts to the process:
Get a fast “no” - use the Teaser phase to filter down the set of partners to ones that will actually do the deal and then focus on getting several of those partners to a term sheet
Keep partners at the same stage - use industry events as ways to hit many partners in a short window and utilize the process structure to move potential partners along together
Gain leverage and apply pressure - use partner competition and the process structure to get slow movers to make decisions and commit within your preferred timeline
Here is a link to the timeline I used when pitching at Proletariat.
Pitch Process Steps
1. Target Planning
Start by creating a list of potential partners (investors/publishers/strategics/etc). This list should prioritize partners based on fit, identify the right contacts, and determine whether a warm introduction is possible.
2. Introduction
The goal here is to meet with the right person to gauge their interest and determine if your project or company is a fit before moving forward. If you are meeting with a partner for the first time, do the outreach several weeks before you want to send out the teaser materials because it can take time to get introduced.
Make it clear that no bridges will be burned if what you are pitching is not a good fit!
3. Teaser
At this phase you want to both further filter out partners that are likely to pass and gather information to tailor your pitch to each specific partner. That means sharing enough information that a partner can gauge if it is worth hearing the full pitch. This includes details like capital needs, timeline, high level product details and more. Be sure to ask questions at this phase, specifically how the partner sees the project or company aligned with their interests or goals.
4. Pitch/Demo
This is the main event and requires careful preparation. Customize your approach for each partner to align with the information you have gained in the previous steps. I will do several additional posts on making a great pitch deck and a compelling playable.
5. Playtest/Diligence
This phase can often be unpredictable and vary widely between partners. It is important to be responsive and maintain momentum. If one partner starts to move forward towards a term sheet, use that as a signal to push the others towards a decision.
7. Term Sheet Negotiation
Getting that first term sheet may feel like the finish line, but there is much more to go. Follow these steps:
Get a signable deal: Once you receive a term sheet, negotiate to ensure it meets your minimum acceptable terms.
Notify others: Inform other interested parties without disclosing confidential details, prompting them to make a decision.
Negotiate: Once you have a deal you’re happy with, use it as leverage to improve offers from other partners. Communicate clearly and move quickly to avoid hurting relationships.
I will write a future post about managing a competitive process that will go into more details.
8. Long Form/Additional Diligence
This step varies widely by partner. Work quickly and proactively to close the deal, as time kills all deals.
9. Close
Congratulations! Now the real work begins.
Final Thoughts
Preparation is the key to running a pitch process. In the later phases being responsive is critical and having much of the legwork done will make it easier. Stay confident, don’t let early passes drag you down. Approach the process with professionalism and persistence, and you’ll increase your chances of achieving a great outcome.