Getting to Carnegie Hall (and Funding!): Practicing Your Pitch to Investors

Getting to Carnegie Hall (and Funding!): Practicing Your Pitch to Investors

I was recently at the ‘s Pitch for $1,000 event, and that old saying, “How do you get to Carnegie Hall? Practice, Practice, Practice” came to mind. The set-up was simple. Anyone who wanted to was given the opportunity to pitch to a panel of well-known angel investors, the catch being that none of the pitches could exceed 30 seconds.  The winner would take home $1,000 at the end of the night. An exercise in brevity indeed! Well, as you can imagine, dozens of founders lined up to take a shot at the 30 second pitch.  Some were good, some were not-so-good, some were totally incoherent in trying to squeeze far too much information into 30 seconds. And then a woman got up, perfectly put together from her immaculately coiffed hair to the tips of her lilac shoes.  She stepped up to the microphone, took a breath and introduced herself, “My name is ________ and I’m from _________…” And then she stopped.  Her eyes widened and then glazed over, as her mouth hung open. And it quickly became apparent that she had completely forgotten the rest of her pitch. The audience shifted uncomfortably as she hemmed and hawed for the interminably long period before the MC called “Time,” and the next founder stepped up to the microphone. I spoke to Lilac Shoes afterwards to ask her about her company (which was actually very interesting), and she sighed “It was my first time…” Not a surprise.  And this is why I tell you, my friends, no matter how well put together your pitch it, it’s just as important to practice,...
On the Importance of “I Don’t Think It Will Work…”

On the Importance of “I Don’t Think It Will Work…”

I was speaking to a founder who had gotten a meeting with a prominent VC recently.  Let’s call her “Red Shoes.” “Well, what did he say?” I asked. “He said he didn’t think it would work,” she said, clearly disappointed. “And?” “And what?” “And what else did he say?” “Does it matter?”  she sighed. YES, IT DOES. I know it’s very disappointing not to get funded and in the moment, it can be hard to see past that, but please remember this.  Your ask for funding should not be the only ask you are prepared to make at your meeting. Look, the reality is that even in a best case scenario, you may not get funded and some of it is not within your control.  Your startup may not fit into a particular investor’s portfolio at a given time, he or she may not be prepared to make the kind of deal that you are seeking, the investor may not be comfortable with your business… and yes…, he or she may be having a bad day. If you are turned down for funding, you still have a chance to capitalize on your meeting.  Many investors revel in being able to give advice to young entrepreneurs, even when they end up not investing. It is a golden opportunity to get feedback on your idea, your business or your pitch, and also to ask for additional introductions. For example, if you do get the comment “I don’t think it will work,” it is a prime opportunity to ask the investor why he or she doesn’t think it will work.  Maybe they’re...
Why Your Your Product Is Not Your Product (A Sheik in the Desert) 

Why Your Your Product Is Not Your Product (A Sheik in the Desert) 

I was working with a young entrepreneur recently with a very promising company which sells a very niche nutrition drink.  Let’s call him “Sheik.” Sheik’s made real headway with his company, securing regional distribution and growing sales and revenue.  He’s looking to raise seed money now to secure his supply chain, so we started looking at his deck and pitch to investors. I learned that Sheik’s drink tastes naturally sweet.  It is organic and extremely nutritious in many ways. It is believed to be therapeutic for children with disabilities as well as endurance athletes. It is extremely labor-intensive (and expensive!) to produce. Sheik has expanded the drink into 8-10 different product lines. Boring! After hearing extensively about his non-GMO, non-homogenized, additive-free, preservative-free, probiotic, and delicious! drink, I finally had to ask Sheik the question, “Sheik, I’ve heard A LOT about why I should buy your drink.  But what I don’t understand is: why would I want to buy stock in your company?” Sheik’s actually pretty typical.  For many founders who have raised themselves up by their bootstraps, it’s hard to get out to sales mode. After going and knocking on door after door after door, getting customers to believe in their product and wanting to buy it, it can be extremely difficult for founders to get out of the mode of selling their product and into the mode of selling their company and themselves as founders. In fact, I see many pitch decks which clearly started life as sales decks with numerous slides attesting to the excellence of their product, but with little to no mention about how the...
The “Minute Pitch Word Salad Problem” (In the Land of the Speedtalkers)

The “Minute Pitch Word Salad Problem” (In the Land of the Speedtalkers)

I recently had the pleasure of sitting in on a Minute Pitch competition run by FundingPost.com. For those of you who don’t know, a Minute Pitch (or “Elevator Pitch”) competition gives a series of candidates each exactly 60 seconds to pitch their company to a panel of investors and/or industry experts. At this particular Minute Pitch competition, 40some startups lined up against the wall to pitch for 60 seconds each. The variety of industries they represented was mind-blowing. Folks pitched on everything from eco-friendly housing to web content development to traditional tech hardware and everything in-between. The depth and breadth of what was presented was an incredibly encouraging sign for the developing Los Angeles startup scene! However, in the midst of listening to some forty pitches, there were moments where I wondered what an alien dropped down in the middle of this event might think hearing something like this: “Hi! IHAVEANEWTECHNOLOGYWHICHWILLTRANSFORMTHEWAYYOULIVEYOURLIFE. I’MGETTINGAPATENTONITBUTHWHENYOUTURNONYOURLIGHTSOROPENYOURREFRIGERATORIT’SGOINGTOBECOMPLETELYDIFFERENT300MILLIONAMERICANSOPENTHEIRREFRIGERATORSEVERYDAY.DON’TYOUWANTTOHAVEANEWEXPERIENCE.ISN’TITSOANNOYINGWHENYOUOPENYOURREFRIGERATORDOORANDALLYOURGROCERIESFALLOUT. WE’VEALREADYGOT200SIGNUPSTOTESTOURNEWREFRIGERATORANDNEED$1MILLIONINSEEDFUNDINGTOBUILDAPROTOTYPE.OURTEAMISREADYAREYOU? Okay, that may be an exaggeration, but only slightly.  There were long stretches of pitches when I started wondering whether I was really in a speedtalking rather than a pitch competition. A word to the wise:  The one who gets the most words out does not win in this case! The point of an elevator pitch is to get someone interested enough to want to listen to your full pitch.  It is not to cram everything in your full presentation into 60 seconds. And it is definitely not to try and say everything you know about your company in those 60 seconds.  (You’d be surprised what happens when the adrenalin kicks in!) The best minute pitches...
Building Your Pitch Deck:  Letting Out Your Inner Superhero

Building Your Pitch Deck:  Letting Out Your Inner Superhero

  I was working with a founder on her pitch deck recently.  Let’s call her “Violet.” Violet and I had been introduced through a mutual friend.  We had spoken a few times previously about her very promising start-up, and we had finally set up time to review a pitch deck that she and her partner had put together. At the appointed time, Violet took me painstakingly through the twentysomething slides of her pitch deck, explaining them one by one.  She carefully detailed the nuances of every line and chart in the deck, and explained the reasoning that she and her partner had gone through in developing the deck. I listened patiently as she ran through the pitch, until she finally concluded. “Violet,” I then asked.  “Don’t you have customers?” “Well, yes,” she said hesitantly.  “We do.” “And don’t they pay you real money?”  I pressed.  “I remember you telling me that you had real revenues, a significant growth rate and positive cash flow.” “Well, yes,” she admitted.  “That’s all true.” “Well then, Violet,” I wanted to know.  “Why isn’t any of that in your pitch deck?” She didn’t know, but made notes to make additions to their deck to that effect. We continued our slide by slide review of their deck, discussing various aspects of the slides and what they could improve to make greater impact.  And then we came to their founder slide. It’s safe to say that their founder slide was on the dry side, dutifully listing their previous positions and academic accomplishments. “Well Violet, the founder slide isn’t just about your bios,” I explained.  “It’s really...
Part 3 of the Tale of Yellow Shoes: How an Angel Investor Can Help You

Part 3 of the Tale of Yellow Shoes: How an Angel Investor Can Help You

For the last couple of weeks, I’ve been writing about Yellow Shoes, the founder of a very promising start-up which was funded while still in concept stage by a couple of angel investors… who proceeded to take over control of the company in the process. By now, you may be wondering why anyone would want to take on angel investors who just want to take over your company. And true, it may be daunting looking over a term sheet which demands a 45% stake in your company. Still, taking on an angel investor is still be the best choice for many founders. Even in the case of Yellow Shoes who lost control of her company, the angel investors brought a lot of value to the table which translated into major assets which got her company off the ground very quickly. Mostly obviously, the angels brought money which allowed Yellow Shoes’ company to grow at a pace which quite frankly would not have been possible otherwise. Remember 100% of a company that’s not growing, is 100% of a very small pie that’s probably not be going anywhere. Taking an outside investor is tradeoff to get necessary capital, and many successful companies would have been spinning their wheels otherwise. Yellow Shoes’ startup had very high customer acquisition costs, and without that quick infusion of cash, getting the business up and running and building momentum would have been highly unlikely. 40ish% of a growing pie is still a lot better than 100% of nothing. Moreover, a reputable angel can bring a lot more than money to the table. Advice, mentorship, and contacts...