It only took about nine months of deal flow and a handful of “pitches” before I realized that most entrepreneurs are really, really bad at “selling themselves” and “pitching” their ideas and companies to investors.
I cringe every time I hear about a great start-up idea or read a well-written business plan, and then watch in horror as the founder stumbles and falters throughout the “pitch”. So many good ideas and businesses are cast aside or ignored, and fail to receive the benefits of a properly funded start-up – all because of a poor presentation during the “pitch”.
During a recent VC meeting we sat and listened to a founder present a fantastic problem, idea, and solution – the Trifecta in the investor community. This was a technology play in a niche market with a proven concept. The only thing needed was the influx of money to take this business to the next level, but after watching a “pitch” that lacked focus and direction, we spent the next 30 minutes debating about whether or not this guy could actually turn his business into a profitable company worthy of our investment dollars. Because of a poor pitch he didn’t get funded.
The sad part was that as I’m sitting there taking notes, I’m thinking to myself, if only I could have spent a few hours with this poor guy BEFORE his presentation. We could have highlighted “this or that”, deleted a whole section here, added more about “this”, not talked about “that” – the guy probably could have gotten a “YES” and ultimately our money.
Learn to Pitch before you start raising capital. Here’s four simple suggestions to improving your pitch.
Tell us what you do in as few words as possible.
Maybe it’s me, but it seems like most Angels and VCs are people with type “A” personalities. We have short attention spans and don’t like to waste time. Give us the “short version”, and if or when we ask questions, then you can provide us with more details. The first thing we want to do is understand what it is that you do – in plain and simple English. Next on the list, we want to know what problem you solve and why your solution is important to your customer.
What’s the plan? How does it scale?
As investors, we aren’t always interested in your product, but we are interested in “returns”. Your mission statement is important to me, but what is really rolling around in my head while you’re up there giving us the “pitch” is: Will this work? Is this the right guy/gal for the job? How much money will we be able to make when we sell our shares? Does this thing scale? Explain to me how you are going to market and grow the business. Most investors are in it to make a profit, and if you’re business doesn’t scale – it probably won’t be very profitable. I’m not interested.
What’s your go-to-market strategy?
Your great idea is useless if no one hears about it or knows it even exists. So many people spend time developing a great product, only to find out no one wants it. How are you going to get it into the hands of your customers? What is your Marketing plan? What is your customer acquisition cost? Do you have any sales channels besides your sales team?
Let us touch and feel your product.
A short demo or actual product sample is really key. I want to use it, at least see it. Is it simple? Does it solve your customer’s problem? Is it easy to use from a user’s point of view? We don’t need to understand all the features or really any of the code – I just want to know that it’s clean, works and is simple to use. It’s hard to invest in things that look too complicated and things we can’t fully understand.
If you nail these 4 key points in the “pitch” and can answer some basic questions about your product, financials and your competition – you’ll have a much better chance of raising funds and building your awesome company.