Your palms are sweaty, knees weak, arms heavy, what are you doing? You are about to make a pitch to an investor. And you’re a little bit nervous. Well, these are some tips that should help you make that process of selling your Regulation D security a little bit easier.
I’ve been right there with you. I’ve been in your shoes about 10 years ago, I did my first deal. And I sat across from my first prospect to invest in my deal. Now what happened to that? He didn’t invest. That’s not the point. I got back up on my feet pitched another person, and they invested a lot. So there you go. So these tips are here to help you hopefully, get over not only that anxiety, but kind of put it in context.
How are you selling, because at the end of the day, we want to do a, we want to be a syndicator, or we want to be a fund manager. But a lot of the job also does involve selling no matter what you think about selling and salespeople. You’re still selling people. Yeah, there’s a fear of rejection, there’s this thing that happens in our guts. I don’t know why. But somehow we get nervous by it. So let’s go through some tips to make the process a little bit easier. And my last tip is probably going to be for me, it’s the most useful, it’s like, wow, that’s a big aha moment. And I hope it will be for you, too.
But let’s get started with all these tips. So that first tip is know your offering. Gotta know your offering, because that’s what’s making you nervous, you’re nervous you’re gonna say something really ridiculous, like, “No, you’re never gonna get your money back.” Or no, it says that you’ve got all this and that’s you find out you didn’t and then suddenly you look like a complete idiot. You got to know your offering.
So what does that mean? Read all the marketing material you’ve got because you don’t want to be caught off guard, read the PPM read the operating agreement, you don’t have to know every little legal nuance in there. But you got to know what it’s doing. You got to know about the underwriting.
I had a partner long ago, who every single time they would pitch somebody, my phone would ring. And it was a question that was so obvious, if they had just spent a single time like looking at something they would have known the answer to, I didn’t work with that person again. So don’t do that. You got to know the offering. You gotta be or you just look like a complete idiot in front of everybody. So just know it.
Little mistakes, fine. Just know it. And if you do make a mistake, or if you don’t know something, just say it, just say, “Oh, I made a mistake there” or “Oh, you know, I don’t know that. Let me find out. And I’ll check with you. And I’ll get right back to you.” Nobody, that’s totally legitimate thing to do. So you’ll feel a lot better. If you just know, you can make little mistakes, you can make things just don’t like, think you have to know everything, but try to know everything. And if you don’t, admit it.
Number two, highlight your founder investment theory. It’s the most critical thing, it’s the most critical sales tool that you have. This is your reason for talking to this person. You want them to buy into the story of your founder investment theory for them to invest. If they buy into the story, and they trust you, they will invest. If they don’t invest, there’s a mismatch between what they’re looking for and your founder investment theory. That’s just not it’s just, it’s just not the right fit to use the same word, right? So it’s not the same thing. And it’s okay, if that happens, but highlight your fit. That is your crutch that is your best tool for selling. Plus, it’s easier to remember, right? So it’s easy to remember what your founder’s investment theory is your reason for doing it. The story behind it, it’s harder to remember like new numbers.
Number three, understand your investor. You got to know what they’re looking for. Are they driven by cash flow? Are they driven by appreciation? Do they want some crazy exciting thing? Or do they want something very safe and simple? Understand what they are? Find out what they’ve done before find out what they’re investing in. Right? Find out what those things are. If there’s somebody well known, then there’s probably media about what they like and what they’re you know, do. Get to know that person before you get to know that person as much as you can visit their LinkedIn page at the very least, why not?
Next one is similar to what we’re talking about. Be transparent. Be honest, tell people what the truth is, you know, little lies, they show up real quick, big lies, they show up even worse. So just be transparent. If you don’t know something, say you don’t know it. And then that you’ll find out and get right back to them. If there’s a problem in your offering, if there’s some big hairy problem with it, let people know what friend this is what it is, and fine and explain why it’s still a good investment. Explain why it fits into your founder investment theory.
Be transparent. Prepare materials. Materials are a great crutch. So if you got a slide deck, great, that’s a great crutch is a great thing to weigh to remember where you’re at. It’s one of the ways to really be prepared and show up like a professional. I’ve talked about that a lot on these videos, is showing up like a professional shows them that you are to be trusted. It shows your prospect “Hey, look, I know what I’m doing here, I’m a pro, you’re in safe hands. This is why it’s good for you want to come along for the ride.”
You’re welcome to practice. Practice pitching, get your spouse, your dog, your anybody and just practice pitching it to them. The more you repeat it, the more the words that are a little bit complicated, not the words that that you have a problem pronouncing and like kind of thing, but how they all fit together in the story, it comes together in a more natural way. So practice it is just practice it five, six times, practice it in the car, hey, what am I what bla bla bla bla bla bla, right. So practice.
Next, discuss the framework. You need to know a little bit about securities rules, you need to know if it’s a 506(b) offering or a 506(c) offering if it’s under Regulation D if you can have only accredited investors and if they’re accredited that they need to be verified or not. Whatever those things are, you need to know what those are. You don’t need to know the nuances of it. You don’t need to know the intricacies and what went wrong in 1935. And how we don’t need to know those things. But you need to know the basic framework that allows you to do this. So that way, if it comes up great, or if there’s any reason for you not to be confident in talking to them, you need to know what those are, so you can feel comfortable.
Next, this is a biggie. Showcase your team. Highlight all the people that are working for you. They’re the people that you’re also leaning on. You’re leaning on your experience on your fit, but also your team. So why your team is the best people to earn the trust of your investors money. It’s absolutely critical. External parties are common to us too. So property managers, a lot of people include me when they hire me in their materials as well. It’s fine with me. You know, as long as they don’t say Tilden Moschetti said, “This is an amazing deal. And you have to invest in it,” which I don’t say. So showcase your team.
Follow up promptly and often. So let people know that you’ll be following up and then do follow up. It shows that you’re a professional. But it also makes sure you stay top of mind and are right there.
Be prepared for rejection. My first pitch rejection, there’s other videos about that. It’s actually the development of the founder investment theory was came a lot from that first rejection. So good things happen out of rejection. And you know what, it wasn’t really a rejection. It was very nice. You didn’t say you’re a jerk get out of here. It just says that’s just not for me. Which is what 99.999% of the people that you’re talking to are and the ones that are the ones that are real jerks to you. You don’t want them in your investment anyway, so who cares about that?
All right, and now the big important one that I want to talk about. So we’re gonna switch back to full screen mode here. Here’s the big lesson too. So as listening to a podcast with Dr. Ian Robertson. So Dr. Ian Robertson is a neuroscientist. He is a clinical psychologist. And what he does is he studies the brain. And really his memory of interest is where that brain that structural piece meets with the emotional part, or the mind part, right where that that crosses the line.
And he was talking about a very interesting study by Alison Brooks out of Pittsburgh University, and Alison Brooks had an idea. So it’s been known for quite a while that the emotions of fear, anger, anxiety, and excitement and happiness, extreme happiness, all have exactly the same physiological mechanisms. So you can look at like an EKG, you can look at brainwave patterns, and they’ll look exactly identical, whether they’re angry, or they’re happy, whether they’re excited, or they’re anxious, right, there’s two those different things.
So what Allison Brooks did is she did a study where she created and this sounds like a torture study to me. But in this study, she puts people up on stage. And she gives them a very, very hard math problem that they have to solve in their heads in the audience, is very critical group of people. So they’re actually the researchers, but they’re trained to be very, very kind of mean and critical. Like, you know, making mistakes is not allowed, all those sorts of things. Now, that certainly makes people will make somebody anxious, because you don’t want to look like an idiot in front of all these people. You know, they wanted to put it make it even worse, put the girlfriend in the audience too. And so now they really have to do it, oh, my God, they’re gonna be so nervous.
Now, to make it worse, right behind them displayed is their EKG. So their heart rate is being displayed to the whole audience to make it just like the stato fear thing, right. So what they did is they had the people come up, they would give them the math problem. And then they would the, the participant would say, either, “I’m very anxious about this,” and then start working on solving the problem. Or they’d say, “I’m very excited about this.” Turns out the people who say that they’re very excited, solved it much, much, much faster, and had a much more pleasurable time than the people that said, “I’m very anxious about it.” Now, nothing else was different. The math problems were the same, the level of scary stuff out there was exactly the same. The only difference was how they labeled it vocally to themselves.
So when you are about to do your presentation, be excited. It’s an exciting time. I mean, when you have a prospect now in front of you, who you’re either going to learn from, you’re either going to learn about how to pitch from right, that’s just like my first mistake, my first pitch, I learned a lot from it, I developed a whole theory of investing out of it. That’s what comes out of failure. Not something really bad. So be excited, because you’re either gonna walk away with money, or you’re gonna walk away with a great lesson.
Now, my name is Tilden Moschetti. I am a syndication attorney with the Moschetti Syndication Law Group. What we do is we help syndicators, investment funds, things like that, to raise money by helping them with their legal documents. So we do the PPM the operating agreements, subscription agreement questionnaire, but beyond that, I’m also there as a consultant, I need my clients to be successful, I really, really want them to be successful, not only because they keep hiring me, but I think that’s how I can add good and value to this world.
So it’s very important to me that they’re successful. And if I can do that, by contributing to their success, that’s fantastic. I love when my clients call me and say, “We just closed, we just finalized this deal. We raised these investors,” you know, are they “We’ve closed our deal out, it’s been fun, we return their money, and we made them more than than we thought we would.” I love those stories. It’s great. It fills me up.
So that’s why we make sure that we give the advice. If you take it fantastic. If you don’t take it, that’s great too. It’s up to you. But what we do is make sure that you have that information. So again Tilden Moschetti, Moschetti Syndication Law Group, visit our webpage if we think there’s a chance we can help you just give us a call setting up an appointment, and we’ll go through what you’re working on.