It happened again last week, I was listening to an entrepreneur’s elevator speech to an angel investor’s team and the entrepreneur spent the entire 5 minutes giving a product sales pitch. Needless to say, the investor tried to coax information from the entrepreneur, but to no avail. The entrepreneur didn’t understand what the angel investor wanted and so insisted on trying to ‘sell’ him on his product. This is a common situation that needs to be understood when you are developing your plan presentation or even your 60 second elevator speech.
What most entrepreneurs fail to appreciate is that the pitch isn’t a place to sell – it is a place to ask. A pitch is where you are asking for something in exchange for an equity position in your new venture. It is more than a selling transaction, you are literally asking for a long term financial and business development relationship. The key is developing trust through transparency about what is going on with your venture and what you will need in order to accomplish your visions of the future. Remember, at the pitch, most investors (or judges) will assume you’re an expert, so the tech or expertise content isn’t the most important element of the pitch. You can greatly increase your probability of success with the judges if you show them how you arrive at your decisions about the opportunity rather than the discussing product content.
Said a different way: resist the temptation of saying “we have spent the past 6 years developing a way to make a great electric bicycle that everyone will want because we really know electric bikes.” (I actually heard a student group at an east coast university say this.) Instead draw a complete venture picture around your 6 years of hard work as in: “our approach to the electric bike revolves around superior battery life and lightweight yet rugged design that will allow the urban cycling commuter to ride a full two hours at an average speed of 25 mph between charges. We have sold 15 bikes to date and need an investment of $125,000 to expand our manufacturing ability to meet the order demand we see over the next 12 months.”
So get your ask in gear, by focusing your pitch on asking for an investment that would accelerate your new venture to capture your awaiting opportunity.
-Stamp
