The Perfect Pitch Works

“He cared; more than Harvey Ramos” – quote from this blog’s author.

I know what you are thinking – he has run out of quotes so now he is quoting himself. So before you get the wrong impression, let me explain.

As part of instructor training at EY, we were told at cocktails when we arrived that the next day, we would be asked to introduce ourselves with the proviso that our presentation had to end with what we wanted scripted on our tombstone. (BTW I suggest you try this sometime.) Well I tossed and turned that night and after trying what I felt were thousands of iterations, I finally settled on “he cared.”

The next day we are going through our presentations and preceding me is Harvey. He comes to the end and announces that his tombstone will read “he cared.” The instructor thanks Harvey and immediately calls on me. My readers are pretty smart so you know how this concluded. So why the long lead in?

If nothing else, this exercise caused me to reflect deeply on what I really wanted to say about my life in simple terms and owners do the same for their company each time they make a pitch for investment. Lately, I have been through a couple of failed funding attempts and I wanted to better understand why investors said “no.” I reached out to some of the investors that passed and also saw a couple of recent articles on the subject. Always searching for a new angle, I gathered about a dozen or so different reasons but was disappointed to find they really had not changed in the last four decades. Some common culprits:

  • Barriers to entry not highlighted
  • KPI failure – either don’t know them, they are poorly defined or poorly measured
  • Shallow knowledge of competition – and the always fatal “we have no competition”
  • Economics – not clear how investment will be used or no “paying” sales channel presented
  • All OPM – where was founders’ buy-in?

I then looked at our “Perfect Pitch” guidelines (available @ and realized all these points would have been addressed had the founders done a deep dive into what they were presenting. To draw the analogy, had they invested the same level of thought into what their pitch “said” as I had in doing the simple tombstone exercise, all of these points would have been addressed.

Your “pitch” is your chance to show your best. I really do not care if you use what has worked for us over the years or another guide, when you are preparing it, invest the time to completely address what is suggested – – there is a reason for it. This is not the same as being at a New Jersey diner and spending the time figuring out what you want from the hundreds of items on the menu. This is not a checklist; it is a starting point for you to shape the future of the economic life of your company.

So please when you put the meat on the bones of your pitch, think about what it says about you and your company; what it stands for and what it represents. Don’t get turned down just because you did not do your homework. Think about how an investor sees it, because properly prepared, the Perfect Pitch does work. Good luck.


It’s Time to be a Shareholder Not a CEO

Max Bialystock: “So you’re an accountant, eh?”

Leo Bloom: “Yes sir.”

Max Bialystock: “Then account for yourself! Do you believe in God? Do you believe in gold? Why are you looking up old lady’s dresses? Bit of a pervert, eh?”

Dialogue from the Mel Brooks classic “The Producers.”

A few years ago, I was working with a long-time client who followed a very democratic process when dealing with his senior management group who also had ownership through an ESOP. There were 5 key management members but the CEO would really not make a move unless he had unanimous agreement. The company had grown nicely in 20+ years but had started to plateau. The CEO approached me about getting an outside board member. He knew things had to change, but he was not sure what to do and felt some independent insight might be a solution.

A couple of years earlier, the CEO of one of my clients had sold (I can do a whole blog on that story), and he was looking for a board seat. While both CEO’s were highly technical (PhDs from top schools), the one who sold was more aggressive and I was reluctant to introduce him into this very democratic environment. After warning both sides, I arranged a dinner. The client who sold asked for some basic data and was very prepared. After exchanging some small talk, the potential board member began interrogating my current client. His basic line of questioning was simple; why was the democratic CEO not acting like a shareholder and avoiding decisions that could increase shareholder value? Did he not realize his fiduciary responsibility? The above noted dialogue came to mind and there wasn’t enough room under the table for me to hide; and after dinner, I felt I had to apologize to my current client for my experiment. To my surprise, he looked at me and said, “Your guy is right; we have to change our point of view.” Long story short; my former client ended up joining the company and becoming a change agent, including helping them with a successful IPO.

I tell that story because I recently met with a good friend of mine who is a middle market investment banker. In many ways, we see the same issue with the need to change the mindset of many of our owners so they can take the steps to maximize the value of their company, especially if they are thinking of an exit. The most successful solution is to build a strong management team who can take over. We both agreed that while our roles were different, getting CEOs to think like shareholders was a key part of what we had to do to help owners. This is especially true if the CEO is perceived as being one and the same as the company. Getting this point across is particularly hard when CEOs point to others who have tried it and failed. Steve Jobs and Apple come to mind.

So as in all things entrepreneurial, it is not easy. You have to stay involved sufficiently to help ensure your vision is executed but not so involved that you are seen as the only one who can run the show. As another good client of mine always said, “Says easy; does hard.” So all I ask is when you go into the office tomorrow, ask yourself if you are acting more like a CEO than a shareholder. Realizing there has to be a change is the first step on the road to your goal. This client (and others I had) did and had great success. With the right mindset, you can do the same.

Business Owners Separation – One Solution

“They say that breaking up is hard to do

Now, I know, I know that it’s true

Don’t say that this is the end Instead of breaking up

I wish that we were making up again”

Lyrics from the 1975 hit Breakin’ Up Is Hard to Do by Neil Sedaka

Let’s face it, whether it is a business or a personal relationship, breakups are tough.  There is usually some underlying issue or problem that could probably be addressed logically, but soon emotions take over which leads to the famed “irreconcilable differences” and before you know it, you need an intermediary; sometimes to avoid physical confrontation.

I have been involved in countless shareholder disputes; many rather benign, but, also, a few doozies.  Trust me, I am not a lawyer and when the legal threats start getting tossed back and forth, I am one of the first to head for the exits.  I am not so naïve to believe I can reconcile irreconcilable differences; it’s just not what I do.

But, many situations can be negotiated out as long as there is some desire to reach closure by both parties.  I have watched a very good lawyer friend of mine do this many times under the guise that many differences can be reduced to dollars and cents.  Quite honestly, an objective issue (like money) is much easier to negotiate than a subjective one (like hurt feelings.)

Here is one technique that I recently used that seemed to work following this concept. Three partners in a business decided to go their separate ways.  Of course, there was no provision in the “shareholders agreement” to cover this eventuality.  Though often used as a solution, selling the business was not an option here.  There were also differences as to what each wanted to do in the future.  With all of the focus on each owners’ share of the company, there seemed to be a logjam in the separation process and it started to negatively impact the business.

I decided to bifurcate the focus into compensation for value contributed and ownership rights.  After consulting with a compensation consultant, we were able to get the parties to agree to compensation levels based upon job responsibilities and then two owners agreed to take less compensation for less time.  Next, we followed the concept of owners getting paid for any share of the business they gave up.  We set up some limited buyouts and after a few weeks of haggling, an overall solution was reached.

With hindsight, there was really no major dispute.  It was simply that a couple of owners wanted to pull back a bit but unfortunately, there was no framework to do so.  Once emotions were put aside, getting to a solution was not that difficult.

So, two simple lessons learned.  First, keeping a focus on measurable versus subjective points helps when resolving ownerships issues.  Second, and more important, the time to negotiate exit provisions is at the beginning of a relationship, not in the heat of a dispute.  Keep in mind the old adage… you should not get into a deal unless you know how you are going to get out.