Tag Archives: Business Pitch

Business Pitch: Don’t Confuse Optimism with Business Potential

Angel investment, Business Pitch,

Chart_shutterstock_42227020_by_ArchMan (2)I listen to a lot of business pitches and way too many of them try to make something out of the entrepreneur’s attitude. Commitment is great, but who isn’t committed? Passion is great but who isn’t passionate about their business. Saying that adds nothing. It’s assumed. So too, with optimism. Business pitch optimism is vastly overrated.

Business pitch optimism

This comes up because I heard this the other day:

I love your optimism. What I don’t like is the complete lack of experience that’s causing it.

Ideally, a business pitch is exciting because the business potential is exciting. Optimism ought to be a combination of potential market, product-market fit, scalability, defensibility, and management experience. Better yet, early sales, initial growth rates, proof of concept in buyers or users or subscribers or signups or something equally concrete.

Don’t talk about it. It’s assumed.

Frankly, in a business pitch, I mistrust shows of undue optimism, passion, commitment and resolve. I worry that early-stage entrepreneurs are working towards some mythological promise that they have the will to succeed, as if will alone can make a business successful. I don’t want to invest in passion unless it’s tempered by experience and based on a solid business plan.

You’ll find people talking about showmanship in business pitches. Absolutely. Tell your story well. Tell the story of the market, the need, the solution, the steps along the way, and the team that’s driving it. But it’s about your business, and you fit in as the manager who will drive it. Angel investors will frequently talk about betting on the jockey, not the horse. In that case, it’s betting on the jockey’s skill and experience, not just optimism or passion.

It’s a fine line. Sell your angel investors your business, not your optimism. Not your passion. Not your commitment.

 

Contrarian Advice on Investment Pitches from a Pitch Veteran

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“We coach entrepreneurs ‘think big.’ ‘Think change the world.’ That doesn’t mean use adjectives that are not credible. Everybody’s revolutionary and everybody’s disruptive now.” 

That’s Bill Reichert, managing director Garage Technology Ventures, veteran investor, a board member on multiple startups, and someone who has heard and reacted to hundreds of investment pitches. In this talk he offers really good advice to people doing pitches now and in the future. 

“The point of the first 20 seconds is to earn the right of continued engagement. If you aren’t compelling and clear in the first 20 seconds this [pointing to a picture of a turtle trapped on its back] is where you end up.”

Bill (a former classmate, by the way) surprised me several times in this excellent talk. He’s not afraid to question standard advice, particularly what pitch coaches tell too many people too often.  For example: 

  • He advises that you don’t spend so much time on the problem. If you start with it, make the point and move on. Investors will recognize it quickly. 
  • Don’t overemphasize the story. Here too, if it’s valid, investors get it quickly. 
  • Don’t believe the common pitch-coach advice about the first 2-3 minutes. “You have 20 seconds.” (That’s around 19 minutes into this video) 

There’s 60 minutes here. Make sure you watch the first 20-25 minutes. From there, having set up some surprises, he goes into techniques. If you’re pitching, this should be really interesting to you. 

Don’t Confuse Optimism with Business Potential

Angel investment, Business Pitch, ,

Overheard:

I love your optimism. What I don’t like is the complete lack of experience that’s causing it.

Ideally, a business pitch is exciting because the business potential is exciting. Optimism ought to be a combination of potential market, product-market fit, scalability, defensibility, and management experience. Better yet, early sales, initial growth rates, proof of concept in buyers or users or subscribers or signups or something equally concrete.

Frankly, in a business pitch, I mistrust shows of undue optimism, passion, and resolve. I worry that early-stage entrepreneurs are working towards some mythological promise that they have the will to succeed, as if will alone can make a business successful. I don’t want to invest in passion unless it’s tempered by experience and based on a solid business plan. 

You’ll find people talking about showmanship in business pitches. Absolutely. Tell your story well. Tell the story of the market, the need, the solution, the steps along the way, and the team that’s driving it. But it’s about your business, and you fit in as the manager who will drive it. Angel investors will frequently talk about betting on the jockey, not the horse. In that case, it’s betting on the jockey’s skill and experience, not just optimism or passion.

It’s a fine line. Sell your angel investors your business, not your optimism.

(Note: I posted this first at gust.com earlier this week. I’m posting it here for convenience of my readers here.)

True Stories: One Good and One Bad Answer to Investor Q&A

Angel investment, Business Pitch, ,

We talk about the slides, and what they cover, but some of the more important moments in business pitches I’ve seen are not about slides, or plans, but rather about the people themselves, and how they respond. pitching

For example, I posted last week on gust.com about two radically different ways to handle questions about financials. In both cases investors had interrupted a business pitch with complaints about financial slides. One response worked perfectly, and the other was disastrous.

A really good answer

A smart woman had a financial summary slide showing when one of the investors complained:

Those numbers are different from what you show in your plan.

She answered immediately, no pauses, no reflection, as quick as a heart beat:

Of course not. That version of the plan was submitted to your deadline, three weeks ago. We’re not static ever. Things change. This chart is from our latest projections.

That was a total win. Everybody in the room understood.

A really bad answer

It was another financial summary slide. Otherwise the pitch was pretty good, and the founders impressive, but the numbers were annoyingly unrealistic, particularly the huge profitability, something like 50 percent or more profits to sales.  Several of us objected. The answer was:

We don’t like those numbers either. They were done for us by an outside financial consultant. We’re looking for somebody to come in and revise them.

Ouch. Throwing some anonymous third person under a bus doesn’t impress your investors. You can’t disown your own slides.

On the other hand, just for a note of paradox, bad financial projections are easier to fix than a bad product/market mix. That disastrously bad answer was not absolutely fatal.

(Image: istockphoto.com)

Business Pitch for Fun and Profit

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(I just posted this on my Up And Running blog over at Entrepreneur.com. For the record, I rarely post the same thing in both places, but today, because I’m announcing this new pitch site, I’m making an exception.)

Consider yourself one of the first to know about the new Bplans.com pitch site at pitch.bplans.com. That means you can be one of the first to pitch and one of the first to get posted.

No, it’s not about putting your business in front of investors, although maybe it could be partly related to that. Instead, it’s about the art of the pitch. Free publicity perhaps too, and tips or comments. What it is about is the art of the pitch. Doing it right, doing it well, and getting yourself and your business up and showing up. (And let’s pause here to note that The Art of the Pitch is a chapter in Guy Kawasaki’s The Art of the Start book. Click here for his reading of that chapter.)

Take your browser to pitch.bplans.com and you’ll see the “Add pitch” button you can use to upload your pitch. What follows is a page of basic information (name, address, logo, etc.) and then a second page where you can add a YouTube video URL if you want, or short texts to deal with 10 key topics. 

This is all free to the users. What do you get out of it? A dedicated URL you can use to refer people to your business summary, plus the possibility of comments; this is free publicity, and publicity is assumed to be good. What do we get out of it? Bplans.com is about starting, growing, and planning a business, so we get more interesting stuff on our site.

And me? I like business pitches. That goes from the 60-second so-called elevator pitch to the 10-20 minute business pitch with slides. To me, business pitches, when well done, are fascinating. I see a lot of them. I see them in my role as a member of the Willamette Angel Conference, and I get to see them as a judge at venture competitions including Forbes and several business school contests. And I’ll be watching them on this site too.

Like they say in the commercials: do it today. Do it now. Click here.