With a vibrant entrepreneurial community, budding business owners in Columbus have a variety of pitch platforms they can utilize to gain feedback on their ideas. From SunDown RunDown, Startup Weekend and WakeUp StartUp, to a multitude of events at OSU, there are ample opportunities for a business to perfect their pitch.
But what makes a good pitch? We’ve asked three business-savvy members of the startup community who might know just a bit about the topic – Dan Rockwell of WakeUp StartUp, Paul Proffitt of SunDown RunDown and Rick Coplin of TechColumbus – to outline the do’s, don’t’s and details of what a good pitch should include.
Prepping for your pitch.
First and foremost, understand your pitching platform. Do you have one minute to wow your audience, 20 to go into detail, or somewhere in between? For any pitch, audience members and investors expect at least an outline of the problem, the solution and what you are doing about it, or your traction. But more on that in the next section.
Know your pitch, now know your audience.
“The first thing you need to do in crafting a great pitch is to first know your audience,” Proffitt says. He recommends doing some research on who will be in the audience. Ask others who have pitched before about their experience, or watch the pitches before you.
When it comes time to pitch, show confidence. Rockwell calls it a confidence game with the goal of people being so excited about your idea, they want to talk to you afterwards. Confidence will help make a great first impression.
“First impressions are made during these first thirty seconds,” Coplin says. “Starting off with why you are pitching is an opportunity for you to show your passion and helps set the stage for your pitch.”
Finally, remember that your pitch should tell a story.
“We are story tellers and we hard-wired to understand narrative,” Proffitt says. “A pitch has flow, it has to logically stick together and draw the listener in.”
Your story can be based on personal experience, or tell how your product will impact customers.
“The story can take many forms, and it will be what makes your presentation memorable to investors,” Coplin says. “Telling a good story brings your vision to life and helps your audience understand your ideas and think of how they might benefit or imagine product extensions to benefit an even larger market.”
What should be included in your pitch?
Your slides will be the nuts and bolts of your pitch – and your business. Below Coplin outlines the perfect pitch and highlights the importance of each step.
1. Problem. Clearly state the problem you have identified and the pain it causes in the market. You need to help investors understand a problem exists and also help them identify with it or understand it. The problem you have uncovered should affect a large number of people and the pain caused by the problem must be significant enough that people will pay for a solution.
2. Solution. Explain how you solve the problem and clearly explain your unique solution. It is tempting to dive into the technology or benefits, but investors will be interested more in how the solution solves the problem. You can get into the technical details and product features during Q&A and/or later meetings.
3. Market. Describe the market you are entering and the market size – which must be large, addressable and specific. Size does matter in entrepreneurship. The market needs to be large enough that enough people will become customers to support your business. Addressable means that you can reach potential customers with your message and they will be open to your solution. Specific means that you can identify customers that you can reach, why they might buy, and then tailor your messaging to them.
4. Customers. Explain your plan to reach and sell to your first, 100th and 1,000th customers. Be clear on how customers will benefit and how often they will buy your product. What potential customers have you already talked to and what is their feedback on your idea? Summarize these conversations for the investors.
5. Business Model. What is your value proposition to the customer? Are you delivering price and efficiency, an overall experience or an outcome? Highlight the key components of what enables you to make money. Do you have key partner relationships that will be helpful? What channels will you use to reach your customers? What will your customer relationships be like? What is your cost structure? What revenue streams will you develop?
6. Competition. You need to be clear on who the direct competitors are and who might enter the market. Detail how you will overcome your customers’ reluctance to change habits or do nothing. What are competitors likely to do when you enter the market? What are your competitors’ strengths and weaknesses and how will you compete against them? Investors expect competitors to have strengths you do not and will appreciate your acknowledgement of those strengths and your mitigation strategies.
7. Financial Projections. Focus on the bottom lines, not the details of expenses and revenues. You can have three to five years worth of projections, but what investors will be paying attention to most are your assumptions and rationale for the numbers. Your numbers should be realistic and reflect what you and the investors know about your market. You should also be clear on when you reach cash-flow break even and at what points you expect to raise funds.
8. Funding Needs. You will need to be crystal clear on why you are raising funds and how each dollar is pushing your company forward. Think about how timing those funds (investments usually come in several “traunches” or portions of the total investment) impacts your plans. Be clear about each tranche’s milestones and how those represent significant risk reduction and progress for your company.
9. Team. Briefly review your team, why they are qualified and the role each plays in moving your company forward. Does your team possess the necessary experience in business development, sales, team building, hiring and firing, raising and managing capital? Do they have industry relationships that can be leveraged to build your business? Your ability to execute will be judged on the composition of your team.
10. Risk factors. Objectively assess risks in terms of your product, markets, economic factors, competition, funding and execution. Clearly and effectively communicate these risks and your plans to minimize their effect on your business.
11. Exit possibilities. Investors will be looking for potential exists (sale of your company) so they can realize a return on their investment. Know the details of several comparable companies’ exits, at what stage of company growth they occurred, the value of the transactions and why the exits took place. Think in terms of timeframes, milestones and potential partners for your company.
A pitch ultimately means you are making some sort of ask of the audience.
“Asks can be anything – mentors, advice, connections, developers, but cash is typically what people want,” Rockwell reminds pitchers. Whatever you are asking, make sure it’s appropriate for where you are in the business development process.
“What do you need to get from where you are at to your next milestone?” Proffitt asks. “The thing about the ask is that it has to be the right thing at the right time in your development of your company.”
Some subtle details can turn your pitch from ho-hum to memorable – and thereby more likely to attract investors.
Use personal examples and real stories. “Judges love real props, customer stories, tangible things,” Rockwell says. “Be memorable!”
With that Coplin recommends including strategic, key sound bytes. “Doing so will help investors to remember key points and will help guide questions during the Q&A,” he says. “Sound bytes can be a phrase or brand slogan you repeat a few times that helps drive home key points.”
As Coplin mentioned, there will likely be a Q&A – which you should be prepared for – but you can use your pitch to help guide.
“As you develop your pitch, keep in mind what questions investors might ask and what questions you want them to ask,” he says. While the natural inclination is to want to include every amazing detail about your product in a pitch, there normally isn’t time to do so. Piquing interest but leaving room for questions is the sweet spot. “Carefully consider what details can be left out and how you might say key phrases that will stimulate questions in your audience’s minds,” Coplin says.
The Q&A is also a valuable learning tool. “You learn a ton from the questions you get, and the like-minded people you associate yourself with,” Rockwell says.
Finally, be receptive to feedback. Rockwell stresses the importance of being mentorable. “Pitching is more personal than we’d like to admit, but we’re looking for a good bet. We’re reading charisma. We need to know these people will take my money, but more so, will listen to my advice but have the resilience and determination to take it or not, but overall go, go, go, go,” Rockwell says.
Don’t do that.
At the top of the don’t-do list? Don’t just read your slides.
“Slides should support your narrative,” Proffitt says. “Actually build your slides after you develop your pitch.”
Slides should be clear and simple. “If either you or your audience are reading the slides, nobody is paying attention to you,” Coplin says.
Also of extreme importance, don’t be dishonest. “Hiding information or giving answers that are partially true are deal-killers when investors find out you were less then forthcoming during your pitch,” Coplin says. To avoid a game-over situation, Proffitt recommends researching as best you can, developing a deep understanding of your product, and knowing when to ask for help.
What you don’t say can be just as important as what you do. Coplin recommends avoiding overly descriptive language, meaning words like very, exceedingly, world-class, etc.
“Entrepreneurs tend to use these words when they lack confidence in what they are saying,” he says. “Your descriptions need to be grounded in reality while painting a positive picture of potential.”
Practice makes perfect.
Rockwell sums it up in two words, “Pitch often.” You are bound to receive several no’s before the magical yes, so be persistent, and use each pitch as an opportunity to further build confidence in your concept, and utilize feedback to continue to improve it.