Investors gave thumbs up to the ability to improvise and thumbs down to an infomercial tone at a recent critique of entrepreneurial pitches in Philadelphia. A panel of investors evaluated presentations from four entrepreneurs and discussed what they look for in elevator and longer format pitches. The session was part of a seminar instructing entrepreneurs on how to succeed at the upcoming Angel Venture Fair 2012.
Four companies who will be participating in the fair won the opportunity to participate in the critique. Two gave eight-minute pitches and the other two had less than 2 minutes to sell their idea.
The panelists included Karen Griffith Gryga of Mid-Atlantic Angel Investor Group Fund, Bob Thomson of Ben Franklin Technology Partners of Northeastern Pennsylvania and Ellen Weber of Robin Hood Ventures. Beth Cohen acts as director of emerging growth services at Philadelphia law firm Blank Rome and moderated the panel. Here is some of their advice to entrepreneurs on how to make the cut on selection day.
Assume investors know nothing about your business or sector. One of the toughest parts of developing a pitch is getting the balance right between too much information and not enough. Use your limited time to give a complete but succinct overview so they understand what your product does, why it’s relevant and what gap it fills in the market. At the same time, try to be as brief as possible.
Offer some competitive analysis. You may be the first company to come out with a product that fulfills a particular need, but painting an accurate landscape of the market for your investors and how your product will change that could do wonders for how your investors perceive and value what your company offers. Be respectful of your competitors, though. As one investor noted, “show where you have credibility and where your rivals have credibility.”
Explain the sales and marketing side of business. Who are your current distributors? How are they distributing your product? This is something they will look for and will appreciate it if you can demonstrate this is an important consideration for your business.
Does your product solve a problem? Make sure this is clear to investors. You may even consider opening your pitch with “Wouldn’t it be great if there were a way to do xyz.” Hopefully, it’s a problem that enough people want solved. On the other hand, beware that you …
Don’t sound like an infomercial. Investors get that you are trying to sell them on your product. They also know you might be nervous. But you won’t do yourself any favors by adopting an overconfident, smarmy persona who sounds more like someone selling ShamWow towels than an innovative medical device or digital health program.
Give a sense of time to market. If you are a small company, do you have a big strategic partner that can help you grow? It’s easy to overlook that in your pitch, but this is one of the key items that investors like to hear about and may notice if it’s absent.
What’s your monetization strategy? You have to make it clear at some point how your company is going to make money. Nobody is expecting you to be profitable in the first year, but if you can give investors a road map on how you will make money, it will provide some logical reasons for companies to put money with you. While we’re on the subject of investors profiting from your business, you should also give them a sense of what your exit strategy is.
Got props? If you have a prototype of your device or product, bring it along. It helps convey what your company is doing and helps investors improve their understanding of your business in a tangible way.
In some cases, less is more. When it comes to visuals in a presentation, the less copy the better. Cohen said to one presenter, “I tell entrepreneurs I want investors to listen to you, not read your presentation.”
If your computer presentation fails, be prepared to wing it. Everyone likes a story of battling adversity and coming out ahead; it’s no different with investors. If you can deliver your pitch seamlessly when the walls are crumbling around you, you do a great service to your business and are likely to impress your audience. If your computer crashes during your presentation, be prepared to pitch without it. Don’t lose time trying to make the technology work.
The 14th annual angel investor fair in Philadelphia on April 13 is seeking startup companies to participate. For more information, click this link.