If you’re like a lot of aspiring entrepreneurs, you dream of the day when you meet with a respected investor, deliver a knockout pitch, and an investment is immediately made in your company. That’s a great storyline, but there’s a 99% chance that your reality will look a little different.
Many startups have the opportunity to pitch very early on − even before you’re ready for investors. Press and marketing creates buzz and helps to get you on the map, so it’s important for start-ups to take advantage of these early opportunities. There are a lot of resources out there for how to pitch an investor (my personal favorite is Chris Sacca schooling a budding entrepreneur in the Startup Podcast), but it’s important to know that there is a big difference between pitching an investor and pitching at start-up weekend or at an early-stage general demo day.
When you are meeting with an investor, your ultimate goals are to:
- Determine if you want this investor to be part of your company
- If yes, convince the investor to put dollars & energy into your company
Contrast this with your goals when you are pitching at a Startup Weekend or a community pitch night before you’re ready for investment. In this scenario your goals are to:
- Get the community excited and engaged
- Drip positive data points on potential investors, either directly or indirectly
Let me explain the indirect piece. I’ve had the pleasure of seeing hundreds of start-up pitches over the years. I’ve been a judge for a lot of pitch competitions and events ranging from Startup Weekends to Demo Days to Community Pitch Nights. I’ve given my own start-up pitches, participated in Google for Entrepreneurs Demo Day at Google Ventures, and hosted multiple events in Detroit. Despite not being an investor myself, I have strongly advocated for companies to investors and made many connections that have led to investment.
One question I get from investors and accelerators all the time is,
“Do you know of any good new companies that should be on our radar?”
This question (which I get 4-5 times each month) and my response, is your first moment of truth resulting from Startup Weekend. And while a positive data-point is a long way from a happy investment marriage, it is a meaningful step –equivalent to a good day of practice leading up to Saturday’s big game.
A good day of practice positions you for long-term success and stack the deck in your favor prior to the big game. Think about it for a minute – the connectors (judges, coaches, attendees) want to help their investor and accelerator friends, and often take pride in understanding the pulse of the local startup ecosystem. Knowing good young start-ups is a win for the connectors.
Investors love knowing strong emerging start-ups in the area to track their progress before it’s time to invest. It makes it easier to invest when you’ve seen the entrepreneur display a positive track record. Win for investors.
And you, the entrepreneur, benefit because you can walk into a meeting with a warm introduction and people already having a positive perspective of you. Win for you. This is excellent news for the whole start-up ecosystem and that’s true whether it’s Detroit, Denver, or Dallas. Good company, good investment, good community.
So – here’s your chance to start something great and my recommendations for making your pitch great:
1. Share your vision.
Get people excited about the world you will create. Be bold with your vision & share how it’s truly going to solve a problem or markedly improve the lives of your customers. One thing that’s underutilized in early-stage pitches is how your a startup will impact the life of a specific single user. In other words, show me how Hamza and his family have their life changed by using your product, don’t just tell me you’ll impact African youth. Most pitches include a market size slide, which works, but I prefer to see the big vision and allow the market size to become readily apparent thanks to your vision.
2. Pick a Customer Base. Pick a Segment.
Now that you’ve shared a great vision, it’s time to focus on one single customer segment & share how you’ll do scalable and non-scalable things to get your business off the ground. Don’t tell me how you’ll be everything to everyone. In the spirit of Paul Graham, tell me how you’ll be loved by a small number of customers rather than liked by a lot.
gathrd, Detroit’s 2nd place winner at Start-up Weekend, did a great job of this, sharing their plan to acquire customers by getting scrappy & creating buzz for a handful of specific upcoming conferences. The gathrd app could work for any gathering of people, but instead of sharing the 10 different types of events where their product would be effective, they made a clear choice and selected conferences as the starting point – plus shared a compelling plan for obtaining users. Decisiveness is a key part of creating a culture of discipline at your start-up & you can read lots more about that in an earlier post about injecting discipline in your start-up.