What Makes a Good Pitch

What Makes a Good Pitch: Tim O’Loughlin

A lot of the CFO’s will ask me what do you want to see in the pitch, and I’m very candid. We’re a growth stage investor. We want to see companies that are showing good revenue momentum. So there should be a slide in there that shows revenues going up into the right and dramatically, and as much back up data that you can put into it to lend credibility to it.

If you know you’ve got eighty five percent of your plan in the bag based on signed contracts, tell us that. Really what we want to know when we see a pitch is how we’re going to make money, it’s not more complicated than that.

And one thing that companies should focus on, is that the terms of a debt dealer are fairly homogeneous in terms of the interest rate, fees, the interest only periods, there’s some variations but they’re subtle. The biggest variation in how we negotiate deals is the warrant, and your pitch can help us structure that warrant. What you’re trying to talk us into is to use a certain company as a comparable value to your company. So when you go public and you have X millions of dollars in revenue the likely valuation at that point in time is going to be some multiple of sales.

So if you show us comps in your sector that have your birth rates and have your gross margins and other characteristics of your company, if you can support a higher comp you’re likely to be able to negotiate lower warrant coverage. So you’re really trying to negotiate the future value of your company and the more you educate us on what that could reasonably be, the better the recommendation.

Meet Tim O’Loughlin, Eastward Capital Partners Investment Partner

Back to the Venture Debt Blog

This is not an offer to sell, or a solicitation of an offer to purchase an interest(s) in any fund managed by Eastward Capital Partners, LLC (“Eastward”). Such an offer will be made only by an Offering Memorandum, a copy of which is available to qualifying potential investors upon request. This material is not financial advice or an offer to sell any product. Eastward is a registered investment adviser. Registration does not imply a certain level of skill or training. More information about Eastward including its advisory services and fee schedule can be found in Form ADV Part 2 which is available upon request.