By Jason Purcell
Capturing the attention and imagination of buyers is key when you want to sell a business. And whether the buyer is a big corporate or a private equity investor, creating a compelling story around your business will help you stand out. The ‘narrative factor’ is one that is often underestimated by sellers, but just as charisma and a personable manner are important traits in individual salespeople, so too the story of your business itself provides a powerful vehicle to spark interest and emotional buy-in: two essential preconditions for a strong sale.
At FirstCapital, we’ve helped a wide range of clients craft pitch-perfect stories to support their transaction. It’s a tricky business and relies on the right balance of specific information and big picture narrative. A strong story will have enough detail to spark interest and to outline the unique prospect on offer without allowing potential buyers to zone out or lose interest. The idea is to reveal just enough at each stage to leave the buyer wanting to know more, to draw them in.
A pitch will be tailored to appeal to a specific audience. We help clients address specific buyer pain points and position their business as the right solution for them. This is something that can subtly be recalibrated to suit a range of buyers’ priorities. We are able to do this thanks to our in-depth understanding of buyer strategies and priorities, something we work on constantly using our deep relationships at all levels within our buyer network.
So, what makes for a great story? And how can we apply it to pitching in business? Here are some pointers:
Start with the problem
In literature and film, traditional narrative structure goes like this: the hero sets out on a quest with a set of ideas about the world and an idea of where he wants to get to, or the problem he wants to solve. In the body of the story, he has to overcome obstacles and through this process, comes to realise new truths about himself and adjust his original idea and his understanding of how best to achieve it. Finally, the hero puts this new knowledge and self-awareness into practice and achieves his goal. This is a useful skeleton for a business narrative, but to really make use of it, you need a clear vision on the exact problem in the market you’re addressing and how your company offers a new solution to it. Start with the problem and take your buyers on a journey to your refined solution to it. It’s a quick way to ensure they’ll understand what your business is about and the value to them.
Keep the detail for later
Don’t deluge buyers with detail too soon. Most people will only remember a small portion of it. Your main goal during a first meeting or call is to get a second meeting to discuss further. You should focus on pitching the big opportunity and having them leave the meeting wanting to know more. Gradually draw them into the process, revealing more as they progress. At the right point, when they are very keen, you then stop giving any more information, and ask them for their commitments.
Use plain English in your pitch. You shouldn’t assume people on the other side will understand jargon or technical vocabulary. Some buyers will be more aware than others, but all will want to be excited by what they hear and to buy into a compelling vision for the company’s future. When sellers are pitching, they are often quite fuzzy about exactly what they do and why it’s valuable to others. They often talk features not benefits. They may cloak unnecessary detail in technical jargon to make it sound more complicated than it is. At FirstCapital, we help sellers avoid this, ensuring that they communicate in clear and understandable language. This is a hard discipline, but essential.
Channel the now
Your conclusion should make clear why now is the right time for a transaction. Frame your reasons with imperative specifics: your company will open up new markets for the buyer or enable them to expand into a new geography. Your passion should be infectious. Be excited by what you’re doing and buyers will pick up on your positive energy.
Use a partner
The primary driver for doing any deal in M&A is the people on both sides of it. It is absolutely key that the people in the room representing your business in pitches and negotiations do a great job of selling it. Coaching on presentation and support with writing and then tailoring the pitch will help. Having an external deal partner who has experience of these types of conversations and can provide independent yet informed feedback and advice is a major asset.
FirstCapital helps its clients by working with them to build and articulate a strategic vision based on a granular understanding of their business, and an in-depth understanding of the market and buyer priorities. We know how to pitch tech businesses to buyers in language they will understand. Our track record of delivering a valuation premium of 50% for clients based on our SMART dealmaking framework proves the success of this approach.