Pitching Dominates In Baseball & Entrepreneurship
Successfully Pitching to Angels
Last year in baseball was called the year of the pitcher—and good pitching dominated the game. The same is true in entrepreneurship. A startup is always pitching—to investors, strategic partners, channel partners, in an elevator, to potential employees, etc. I previously wrote about pitching form and what makes your pitch stick.
Today we discuss content in the pitch and what will impress an investor. First of all, remember that the goal of any pitch is to get to a second meeting. Just say enough to get investors interested in your business. Enough to want more information.
If you are pitching before angel investors then remember three major points. The first is that you must have proof of concept. This is usually a technical point: The technology works, beyond paper theory, and you have developed a minimal viable product, in the form of a prototype. An even better situation is to have customers lined up willing to test and purchase the product, called traction by investors. The second point is to show proof of market: Does your solution show evidence of a large market? The third major point is you must show evidence that positive cash flow is easily possible within a reasonably certain time span.
Be articulate, short and to the point. Use the KIS (Keep it Simple) method, as you never know for certain who in the audience, and who understands the technical points of your solution. Keep the technology talk to minimum. With regard to technology, a good pitcher only needs to show that their technology works and has protectable intellectual property.
There are a number of other points that will score points in the eyes of investors. Does your current team, not those that will join after you are funded, have the horsepower to execute and scale the company? Investors usually bet on the jockey (team) and not the horse (technology).
Here are a couple of recommended slide decks and don’t forget to put in a title and ending slide along with your contact information.
- Problem/solution
- Market potential
- Team
- Channels and got to market strategy
- Competition
- Financial projections
- The ask and use of funds
- Always have backup slides (these are slides that answers the first few most likely asked questions)
And here is alternative, similar version:
- You address an important problem
- Your proof that this solution is complete and a magnitude better than others
- There is a large market for the solution
- The solution is better than others and why
- You have demonstrated good progress
- The team can execute on the company
- The investment provides a reasonable return to investors
What else might impress a potential investor?
- You know the rules of the game. For example, you understand how the investor operates, the investor’s average investment, you have completed your due diligence on the investor or group, your average valuations to prior investments, and what excites them about an entrepreneur. In other words, you understand their process.
- A flexible management team, good potential returns and an idea when an exit might occur
- Good use of the proceeds from the investment
- Good and frequent communications
- Delighting early customers
- You listen and learn well
- Good qualitative and quantitative milestones
- You measure progress religiously
What are some of the pitch or deal killers?
- Lack of clarity and not being articulate
- Demonstrating lack of leadership qualities
- Lack of appreciation for the competition
- A pitch long on history and technology but lacking an execution plan
- Generic assumptions
- Underestimating the barriers to entry, or overestimating those for your competitors
- Weak marketing and/or sales plan
- Unrealistic financials
- Unrealistic view of capital requirements
Pitchers rarely hit it out of the park. But that is your challenge, and your goal.
