Learn to succeed with investors–from a guy who failed.

Shortly after my college graduation, a few friends and I started a new media company. Within a few weeks we fleshed out the concept, wrote a business plan and set out to seek financing. With a little hustle, I managed to get us a meeting with a well-known investment firm to discuss the opportunity. Even though our business had yet to bring in a single dollar, and none of us had ever been the CEO of coffee shop let alone a multi-million dollar enterprise, we were all confident that we had a sure thing on our hands. After all, our financial projections forecasted gross revenues of $200 million. What investor could say no to that?

We’d be rich. All we needed to do was raise a small amount of capital–$15 million.

I remember thinking, “How hard could it be?” We were obviously, naïve, foolish and delusional.

There was one small problem with our plan. None of us had any idea how to pitch an investor. So I did what any clueless entrepreneurial upstart would do: Google searched “how to pitch an investor”.

Nothing that I read online could have prepared me for what was to come. We would quickly find out that our presentation was doomed before we ever set foot into the meeting. In reality, it was doomed before we started writing the business plan.

At the beginning of the meeting one of the investors asked me to hand him a one-page executive summary review. I hadn’t prepared a summary, so I handed him the first 11 pages out of the binder encasing my 95-page business plan. Strike one.

Less than four slides into my 32-slide presentation, the second investor interrupted me and said, “OK. Stop. I get it. You definitely don’t need $15 million.”

Defending our business plan, I overconfidently replied: “It can’t be done for less.”

“Really? It can’t be done, huh?” he responded with a smirk masking a hint of laughter. Strike two.

Both of the investors then proceeded to hit us with a barrage of questions:

“How much money have you personally put into your business? Anywhere near $15 million?”

“How can you possibly substantiate gross revenues of $200 million in year three?”

“Why are you trying to produce, market and distribute 10 products at the same time before you see if a single one sells at all?”

The questions went on and on. None of our answers were favorable. Strike three.

As you might have guessed, I didn’t walk out of that meeting with a $15 million check. I later realized, however, that this was one of the greatest educational experiences of my young career. I learned more about real-world fundraising in 30 minutes than many entrepreneurs learn in a lifetime. To this day, whenever I pitch investors for capital, I always remember these six hard-learned lessons:

1. Less is always more.

An elevator pitch is vital. Verbose presentations and lengthy explanations will not impress investors, and most likely will turn them off. Present your business in a manner that’s short, sweet and to the point. Investors need to be confident that your business will attract and retain customers. If they don’t grasp your concept in a short time span, they may presume that customers won’t understand it either.

2. Never hypothesize. Execute, execute, execute.

Inspire confidence with facts, not fiction. Most investors seek out low-risk businesses with proven managers that are as close to guarantees as possible. A company with cash flow, a track record and real-world experience has a better chance of getting investors than a business plan forecasting large returns. Find ways to test your business’s viability on a shoestring budget, and turn your idea into a functional business before you seek investment.

3. Leave the hockey sticks on the ice.

Excite investors about your big picture, but be reasonable and responsible. Avoid hockey stick projections. Respectable investors will not take you seriously if you present them with nonsensical financial graphs that claim your company’s revenues will grow from $100,000 to $50 million in three years. Show investors that you have a grasp on reality with three versions of financial projections: best case, moderate case and worst case. Base each of these models on facts, past and present performance data, industry and competitor analyses and a series of well-thought-out, defendable assumptions.

4. Learn to love discount stores.

Being cheap is chic. In an age where spending is out of control, you’ll need to prove that you are a fiscally responsible manager who knows how to get the most out of a buck. Give yourself wiggle room in your operations and marketing budgets, but avoid being excessive. Never ask for a large salary or big-budget perks. Investors want you to be in a position where everything is on the line.

5. Rome wasn’t built in a day. Your business won’t be either.

Investors are wary of funding over-eager businesses that seem destined to bite off more than they can chew. Before asking for millions of dollars to fund 50 divisions and hundreds of product lines, prove how well you can create, manage and fulfill demand for a single product. Demonstrate that your business can crawl before you say it can walk. Perfect your marketing tactics, sales strategies and operational procedures. Investors appreciate companies with sustainable step-and-repeat business models that are poised for exponential growth. Remember, even Google’s success is based on a single product.

6. Choose not to be the smartest person in the room.

Know what you know, know what you don’t know and find the people who know what you don’t know. Build a team of credible experts. The smartest leaders in the world are those who surround themselves with smarter people. Investors are funding a management team as much as they are investing in a great business concept.

Are you a young entrepreneur with a unique venture? Email Scott about it at pitchme@askgerber.com.

Scott Gerber is Entrepreneur Magazine’s Young Entrepreneur columnist, CEO of Gerber Enterprises and founder of AskGerber.com. Visit AskGerber.com to find out how your business can get featured in Scott’s new book, Never Get A Real Job. For information on speaking engagements, media appearances or Gerber Enterprises’ portfolio of businesses visit www.GerberEnterprises.com. Follow Scott on Twitter @askgerber.

Five ways to look like you make a lot of money without spending a lot.

In today’s cluttered, hyper-competitive marketplace your business can’t afford to make a poor first impression. Every touch point that leads to your company needs to impress, motivate and inspire a prospective customer. You may have a great product or service, but to be taken seriously, clients need to believe that you’re on the same playing field as the bigger guys. Even if you’re a consultant that works from a home office, you’ll need to position your company as a polished brand that touts confidence, experience and quality. Fear not. Here are five simple tips for branding your business to create the illusion that it is a global corporation with an army at the ready — all without breaking the bank.

1. Website:
Your website is the center of your brand universe. Simplicity is the key to looking like a big fish. Less is more. A clean, easy-to-navigate two-page site with useful content will make your company look far more established than a cluttered 20-page site with long-winded fluff. Design your site with the needs of your user in mind, not your ego. Sites that try to be everything to everyone will often become nothing to anyone.

Don’t get discouraged if you don’t know how to build a website. You can solicit bids from designers and programmers using sites such as Elance.com, GetACoder.com and Freelance.com. Other solutions include subscription-based companies such as Web.com. These service providers offer small businesses online tools, templates and hosting packages that can have your site up in a matter of hours without you needing any previous web experience.

Choosing the right URL is also a vital part of your brand positioning strategy. Your main URL should be no more than 10 characters in length. Long URLs are harder to remember, harder to read and are more likely to be spelled incorrectly. Avoid URLs that are phrases, begin with lackluster words or utilize dashes. There is a reason Apple.com isn’t WeLoveApple.com, or Apple-Computers.com. Finally, use a URL with a .com extension. While it’s important to purchase all of the other domain extensions to protect your name, major companies rarely use extensions such as .tv and .net.

2. Vanity Numbers:
How often have you seen a billboard or heard a radio spot that advertises an easily forgettable phone number? Phone numbers must be catchy, memorable and relate to your product or service in order to prove effective. Online services such as TollFreeNumbers.com sell custom vanity numbers for around $50. Purchasing a vanity number is a great way to increase sales call volume, build brand awareness and increase the effectiveness of your marketing efforts. Case in point, one of my businesses, SizzleIt.com, witnessed a 30 percent increase in calls the month after we replaced our generic 800 number with 877 EZ SIZZLE. Our clients told us that the number was easier to share with others and reinforced the simplicity of our services.

3. Automated Phone Systems:
Combining a toll free number with automated phone systems and virtual assistants enables small businesses to look and sound like a cohesive Fortune 500 enterprises while operating in multiple locations anywhere in the world. These services utilize professionally recorded voice over talents to automatically route callers to the appropriate party and provide callers with brand messaging and information while they wait on hold. While big companies pay tens of thousands of dollars for their phone services, small business phone systems, such as those offered by OneBox.com and My1Voice.com, can cost as low as $50 per month. This gives small-business owners and employees the ability to receive calls in their home offices or on their mobile devices while appearing to be available in their office. Which brings me to‚

4. Virtual Offices:
Even though you might be answering a call on your mobile phone from your living room, it’s important that your customers believe they are calling a global headquarters located in a skyscraper overlooking Central Park. Virtual offices are an effective solution for businesses that conduct most of their day-to-day communications via phone calls and emails, and rarely need to host their clients on-location. For only a few hundred dollars per year, virtual offices offer small businesses high profile mailing addresses on brand name streets in major metropolitan areas. In addition, they include mail receiving and forwarding services, receptionists and options for on-location meeting space. Instead of paying exorbitant NYC rental fees, my first business saved over $100,000 by purchasing a Madison Avenue address for only $300. The address enhanced my company’s clout so much that we needed to increase our rates in order to keep the illusion believable. After all, Madison Avenue companies aren’t cheap hires.
5. The Business Card:
Now you have a slick website, a jingle-worthy toll free number and a captain-of-industry street address. It’s time to combine all of those elements into a single tool. The business card is a vital part of the first impression experience and an instant reflection of you and your company’s work. A cheap, uninspired business card may send the wrong message to a prospective customer. Spend time designing a card that will have people saying, “Wow, nice business card.” Be creative, yet tasteful. Avoid using white, standard size business cards. Choose a thicker card stock with a high quality finish. Make the card longer, a different shape or a bold color to stand out. These printing options will increase the price of your cards, but they will pay off ten-fold in the long run. Customers want to do business with companies that demonstrate their ability to provide high quality services, and a creative business card will send them that message.

Scott D. Gerber is Entrepreneur.com’s Young Entrepreneur columnist and CEO of Gerber Entertainment, a brand development and venture management company that specializes in the entertainment, Internet, media and marketing industries. For information on speaking engagements, media appearances or Gerber Entertainment’s portfolio of businesses visit www.GerberEntertainment.com.

As a follow up to Jen’s recent piece, Media and Publicity Tips from the Pros, we thought we would share another one of our little secrets to getting free publicity…HARO – Help A Reporter Out, by our good friend Peter Shankman.

Our newest contributor, Scott Gerber (aka The Young Entrepreneur), wrote a great feature on Peter and his company and was willing to share it here with us!

HARO is a revolutionary social media platform that connects journalists from around the world with sources for their news stories. Each day founder Peter Shankman sends three ad-supported emails, each with 30 to 50 queries from journalists seeking experts, to an opt-in email list comprised of small businesses and PR professionals. If a HARO member feels they are a fit for a journalist’s story, they simply reach out to the journalist directly. The service is free, easy and provides results. Since the founding of HelpAReporter.com, members from the HARO community have been featured in hundreds of national and international media outlets including The Wall Street Journal, The New York Times, and the TODAY show, to name a few.

The Startup Story: In November 2007, Peter Shankman, founder of The Geek Factory, a boutique PR and marketing strategy firm, started a Facebook group in hopes of helping his journalist friends connect with sources. Within three weeks, word of mouth about the group had spread. What began as 150 friends quickly became a 1,200-person community. In order to keep up with the explosive growth, Shankman launched HelpAReporter.com. In just over a year and a half, HARO has become a global social media powerhouse, with 75,000 active members and growing.

Impressive Stat: While most businesses are lucky to attain a 5 percent open rate on a monthly email blast, HARO averages an impressive 80 percent open rate, three times a day.

Founder Fun Fact: Peter Shankman isn’t a traditionalist by any stretch of the imagination. Why should the capital raised for his first venture be any different? Simultaneous to the film release of Titanic, Shankman had the idea of selling T-shirts that poked fun at the blockbuster in Times Square. The shirts’ slogan read, “It Sank. Get Over It.” His out-of-the-box plan paid off big. Shankman was able to sell $100 thousand in shirts in a little less than two months — then funded his first venture. No wonder he wrote the book, Can We Do That?! Outrageous PR Stunts That Work and Why Your Company Needs Them.

Peter’s Advice: “Find something that works and do it again. If something doesn’t work, make it better, then try it again.”

Scott Gerber is a syndicated Young Entrepreneur columnist, CEO of Gerber Entertainment, an entrepreneurial incubator, and Founder of SizzleIt.com, the expert in producing affordable, captivating and effective sizzle reels for brands, products and services. For information on speaking engagements or media appearances visit www.GerberEntertainment.com.