Tip of the Spear Sam Palazzolo shares the 4 key points an investor wants to see in a presentation.

Entrepreneurs miss the target because they focus on their own story and not on what the investors need to hear, and they also pitch the wrong investors too often. Entrepreneur, Venture Capitalist, Author, Leadership Professor, and Nonprofit Philanthropist... Sam Palazzolo brings a variety of value creation topics to entrepreneurs and business leaders. His ideas and actionable takeaways are captured in his five books, the most recent being Leading at the Tip of the Spear Ventures. He shares practical tips on the 4 key points venture funds want to have in the deck, and also talks about their phone first, email second approach and how he uses the online chat bot to secure business.

Also check Sam's “Business Transformation Self-Assessment Workbook” here http://hubspot.tipofthespearventures.com/business-transformation

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Transcript

Sam Palazzolo: 0:00

I'm laughing.

Jim_James: 0:01

no, you're on ok laugh. We don't disallow laughing on the show.

Sam Palazzolo: 0:04

No, I'm laughing because I did have somebody ask me that some of those questions, because I won't say all of them, but that was

Jim_James: 0:11

Sam, Palazzolo, is that how I pronounce it properly? Sam

Sam Palazzolo: 0:14

it is.

Jim_James: 0:14

Great. So Sam, you're joining us all the way from Los Angeles, and you're going to share with us today how you help companies both to raise money and how to communicate when they're raising money. So welcome Sam.

Sam Palazzolo: 0:25

Thank you so much for me.

Jim_James: 0:26

So just give us a little bit of background. How do you help entrepreneurs to get noticed with the money man?

Sam Palazzolo: 0:32

Yeah. So I found a Tip of the Spear of Ventures back in 2012 after successfully leading a tech startup to a private equity exit. So we raised$8 million straight out of the shoot at that tech startup. I prior to that had my own sales business development consultancy. I brought to the tech startup that same blueprint architecture plan for how it is that we were going to not only raise capital, but actually develop the sales pipeline. we grew some traction. Traditionally, one of those mythical hockey stick graph revenue chart was our reality. We grew the attention of a couple of private equity firms at around the 18 month mark. And at 24 months, one of them ultimately purchased us kind of a, an acquisition to eliminate competition. If you will, from their perspective, Uh, regardless I off ramped either way formed tip of the spear ventures, and we have two sides of the firm today. we have a venture side of the firm where we work with entrepreneurs. We also do what McKinsey and Deloitte calls, business transformation consulting. I mentioned I come from big consulting now, but it's essentially change management, heavy focus though on sales and marketing there.

Jim_James: 1:44

So Sam, getting bought within sort of 24 months is most entrepreneurs dream how did those other companies know about you? Did you court them? Did you get in their face? Did they see you in PR? And went I've got to buy that company, tell us about how you manage.

Sam Palazzolo: 2:00

Yeah. so we do the same type of a methodology today in our business transformation consultancy, that we implemented at the tech company. I think it's one of those things where if you think about consulting where traditionally, it's a handshake type of a deal with the people that you know, that are within your network. that pool or that circle of population is only so large. We wanted to figure out how is it that we can expand that circle. In other words, we just, weren't interested in buck shotting, We wanted to know with specificity, we're going to approach a specific organization or a specific client or prospect, and we want to target them, and we want to outreach, attempt to connect with them and then see if we can develop some type of a relationship first and then relationship leads to ultimately business conversation and how it is that we know we can help them. We're a value creation firm and we believe that each one of the organizations that we work with has a value that they provide to their end client, how they message that value can be all the difference. I give you a great example. Jim. So we're working with an organization right now. It's engineered led. Engineers come up with some of the best innovative ideas they lead the best organizations or potentially the best. The problem is that as an engineer, you want to talk engineering. Uh, financial community, somebody like myself with a financial background, we want to know what the engineering specifics are. But if that's the only thing you're going to talk about, you're going to lose us. He's looking at putting a presentation in front of a financial community that is so deep in the weeds might be the best analogy I can give you. It's so engineering detail, rich that a financial investor doesn't really understand what it is that they're looking at, which is always amazing, right? Because financial folks look at numbers all day. but it is one of those things where they want to know something about what the business does, but more importantly, from an investor community, they really just want to know a couple of things. What is it that you're doing? What type of traction with what you're doing, have you been able to achieve? And if we invest in you, two things, what are you going to do with the money and what are we getting in return for the money over what time line Right. Those are really the nuts and the bolts and the essentials of what an investment community wants to hear. They also have a relatively short attention span so you need to be able to encapsulate those parameters that I just mentioned those handful within about a two minute time period. Now it doesn't mean that you can't circle back and do deeper dives on each one, but you need to architect a high level architecture so that way the investor can get a sense of. Okay, great. This makes sense. It makes sense for us to have a deeper conversation, dig a little bit deeper on some of the things that you mentioned in the overview. And if you think about it, this is what an executive summary is all about too, right? This is why you provide an executive summary that way, when the executive reads it, if they want to go deeper, they can, if they don't, they know just enough to be dangerous. So that's kinda, that's our approach how it is that we help organizations share that value creation that they provide to market.

Jim_James: 5:24

So Sam, you mentioned that in your business, you found the company you wanted to get in front of. So should entrepreneurs that are looking to raise money, should they really be shortlisting those VCs or angels before they prepare that presentation? Because it sounds like not all investors are looking for the same kind of investment.

Sam Palazzolo: 5:43

And they're not, I think that the more specific that you can be where you've done the research prior to, what the organization or the individual likes to invest in, those can be some of your most productive types of conversations. The things that don't work are the generic non-customized types of outreaches. I just got one this morning from an individual. We don't invest in anything that they're doing right now. Here's why specific outreach and approaches also work best because if the individual that you're outreaching to and you customized the outreach to them, if they can't help you, they probably know somebody within their network that can, the thing that I love about what it is that we do, and that is within this financial, this venture space is that it's a community of sharers, right? It's one that if the opportunity isn't right for them, they'll share the information to somebody else who is right for, and that works vice versa. So your original question, should I specify who it is that we outreach and connect with? The answer is absolutely.

Jim_James: 6:56

Now Sam, where would an entrepreneur go to find that community, in Asia there's the Asia venture capital journal, for example, but you need to subscribe to that. So it can be a slightly dark and distant community to get into how does an engineer or maybe a food tech entrepreneur find the right investment company to approach.

Sam Palazzolo: 7:19

We had an entrepreneur who approached us about four years ago and he said,"I've got an entrepreneurial idea. Here's what the idea consists of." It was brilliant. Jim, the problem was is that he had the idea and had been trying. And I say trying loosely to approach investors and the investment community for a period of about three years. When I asked him. So why aren't you making headway with the investment community? And his response to me was Sam, I wasn't born with a platinum or titanium spoon in my mouth. I don't have that network." And I said, I'm afraid that we're probably not your best resource in this instance, because if you're going to give up that quickly, none of us are born with a platinum number titanium spoon, or the majority of us aren't that are entrepreneurs. I wasn't, I was born in Detroit, Michigan in the shadow of a Ford manufacturing plants smokestack as my mother likes to say, on a good day, we had plastic spoons, but it is one of those things where you've got to figure out a way today. And especially during the pandemic, Jim, it's never been easier to get a hold of whoever it is you want to get ahold of because you can outreach and connect with them and you can conduct this type of a zoom meeting with them. They never have to leave the confines of their work from home, hopefully comfortable office space or even their kitchen. So its never been easier. Where do we find or where do we recommend people? Look, you mentioned some of the published listings of some venture capital, maybe private equity, maybe family offices. Those resources are available, but we also look at it from a different perspective and that is, let's just get a little more organic. Okay. Let's set up some Google alerts to see who it is. That's investing in this type of a space. So Google setting a Google alert, we'll get up to 10 each day. You can click a link to see more in the event that there were more, but that will give you a listing of some articles that were published on the topic. And if it's a business article, somebody probably published it. The author, somebody probably the author interviewed someone. So a great opportunity organically to find some people and specify who it is that you outreach to. We also have this thing That nobody takes advantage of and nobody works well. I'm convinced we're in the top 3% of how it is, or we go about leveraging LinkedIn, but I can tell you that there are some times even I sit back and I hear something and I'm like, why didn't we think of using it like that? LinkedIn is a great tool. It'll give you geographic specificity. It'll give you, the industry, the organization, the leader information. The two things that are differentiators for us that allow us to pinpoint some prospects and targets in an outreach attempt, those are the two primary things from an organic search.

Jim_James: 10:16

So Sam then you're using LinkedIn, but as an entrepreneur, looking at getting to these, storied people like on Sandy hill road is it just an email well-written or are there some other tools or tactics? I remember years ago, the old story, someone sent one shoe in a box to an ad agency and said, now I've got my foot in the door let me come for an interview to talk about the job. Do you have any stories or any ideas for people that to make them different? So they're not all just sending in the same formula four or five page PowerPoint presentation?

Sam Palazzolo: 10:52

Yeah. we've gotten that type of charge key where it's a baseball, we've gotten toothbrushes. we've gotten fertility testing kits. I've gotten all kinds of crazy stuff over the years. And, some of it is worth me looking at the majority of it though, are things that, we don't even look at, and we don't recommend that type of a hokey gimmicky type of an outreach because we know the entrepreneurs that we work with, they drive value. They want to be the top 3% of what, whatever industry or organization type classification that they produce within. And If they're value creators, they probably have a unique value that they have to offer. And part of that is the presentation for what it is that they have to offer. And here's what I mean by that, Jim, they probably have a unique perspective within the industry or the space that they're operating in that can elevate them from just somebody who's got an organization that's looking for some money or looking to connect with the investment community. To being a valuable authority within the space and as a valuable authority in the space. It's the, these are the opportunities also financially within this space that exists. And here's how our solution. Kind of bridges to that opportunity. So we always, I want to say position the entrepreneurs that we work with to outreach and connect with those investors or the financial community leadership to conduct an executive briefing it's a 15 minute type of an overview that establishes them as not only an entrepreneur, but an authority in the space. And here from an authority perspective, is why it is that you should talk with us because if they're not from an investor perspective, if they're not looking in the industry at this unique perspective that they're coming to the table, bringing them in that executive briefing, they're going to miss out.

Jim_James: 12:56

Okay. That's a really good idea. So getting the entrepreneur to be seen as a thought leader that can drive that forward. Now, Sam. with tip of the spear ventures, you're playing your thought leader and with lots of experience, how have you been building the brand of your own business? You'll need to get deal flow as well won't you from both entrepreneurs coming in and companies looking for business transformation. Can you just share with us as an entrepreneur, how you are succeeding in that area?

Sam Palazzolo: 13:23

So we do the same thing. We do the same type of organic outreach that I mentioned, where we set Google alerts within the industry or a specific keywords. We develop our own list of prospects on a monthly basis, and we go on the hunt. we outreach connect with folks that are outside of our network. We want them also to know that we're outreaching and attempting to connect with them. we're an email second type of an outreach approach as well. So here's what I mean by Yeah. Most folks just simply want to get together a listing, some type of a database. Maybe they'll go formal, put it into a CRM and they'll begin some type of an outbound campaign where they'll blast emails. Okay. We do that not necessarily a blast, more of a customization of those emails, but it's secondary, we're a phone first type of an organization. So we attempt to place phone calls, outbound. It's a differentiator for us, it's a differentiator for the entrepreneurs that we work with as well. And it forces them to actively pick up the phone and the phone call isn't necessarily to conduct the executive briefing right then and there it's simply just provide the introduction and establish an appointment for a future date to conduct that type of an executive briefing. So we're different in our outbound approach. From that perspective, it's very value-creation driven phone first, email second, we're looking to provide an introduction. Two seconds ago, the individual didn't know we existed. so let's introduce ourselves, let's drive the value creation and setting up a 15 minute appointment for an executive briefing. That's our outbound approach. Inbound. we do, and we encourage our entrepreneurs that we work. To follow HubSpot's methodology. I'm a pre IPO HubSpot fan back since 2014. I'm I won't say that I'm the best writer. I've written five books. I have almost 300 articles out on our website@tipofthespearofventures.com at the point blog. You can look at those. We've also got a series of white papers or whatnot, but we want to establish ourselves as that type of a inbound, outbound approach to prospective customers and we manage the sales funnel on a monthly basis and get this Jim I also challenge myself to outreach and connect with 50 different prospects each month. Why? Because I just don't want our team to have to do that. I want to do it as well. I'm not willing to assign anything that I'm not willing to roll up my sleeves myself as a leader to go out and conduct. It makes the conversations and our team meetings with our outbound type folks that much more productive because they know I'm doing it. I'm slugging it out right in the leadership trenches next to them.

Jim_James: 16:23

And Sam, if people want to find out about you and tip of the spear ventures and even get a chance to pick up one of your amazing five books, how can they find out about you?

Sam Palazzolo: 16:33

Yeah. super simple tipofthespearventures.com. You can find us there in the lower right-hand corner there's a chat bot. You'll see my picture on it because I'm the chat bot. If you type something in there, I'm the one who responds if I'm at my desktop or in my office, I'll respond right then and there, we had an entrepreneur who outreached connected with us a couple of weeks back. I called him up. And he said, who is this? And I said, it's Sam, you're at our website right now. How can I help? He said I can't believe it. I can't believe you're calling me.

Jim_James: 17:10

I'm the same. I have the Zoho chat on mine and I've rung, someone said you're on my website and they go, oh, So that's amazing that you're doing that. You're there online

Sam Palazzolo: 17:20

I'll give this offer. I know. We'll put it in the show notes too. We developed a business transformation self-assessment workbook. It's 37 pages in length, 132 questions, and it details out specificity regarding what it is in a, self-assessment kind of a DIY for your listeners. So that way they can look at and assess their business over the four parameters that we work with, in our business transformation, small businesses, SMB market here, as well as the fortune 100 organizations that our clients they're in, but our gift to you and your listeners, that business transformation self-assessment.

Jim_James: 18:01

Sam. That's wonderful. So to summarize, then you've got some day to day making phone calls. You've got a lot of, self-discipline a lot of outbound and inbound, and I love it that you are the real time on reception be cause that's. That is the mark of a true entrepreneur. I'm with you. I had that on my mobile phone. So Sam Palazzolo from Los Angeles tip of the spear ventures. Thanks for an inspiring and really informative conversation today with me on the UnNoticed show.

Sam Palazzolo: 18:28

Thank you, Jim.

Jim_James: 18:29

So you've been listening to Sam and he's got a long and complicated surname, which is Italian, even though he's from Chicago, living in Los Angeles, Palazzolo and he is from the tip of the spear venture. So we'll put all that in the show notes until we meet again. I wish you the very best that you are staying safe and that you are getting noticed for all the value that you can provide to your customers. Thanks so much for listening.