Pitch Perfect

I've just attended WebSummit 2015 in Dublin. Its one of the largest gatherings of start-ups, investors and business angels during the year. Attendance is typically in the 20k bracket and its a popular event with celebrities such as Bono from U2.

This years event included several live pitch stages where anyone could stand up and live pitch their start-up directly to a group of investors in front of an audience. One of the pitch stages was sponsored by Audi and I watched a number of start-ups pitch during the course of the event.

For a lot of the people using the pitch stage, it didn't end well. We saw a succession of young hopefuls go down in flames under the weight of badly thought of ideas, unworkable business models, rampant ego's and twisted understanding of how investment works.

Anyone who really understands how investment works wouldn't get up on one of the these stages because they understand the damage that a bad pitch or a bad investor reaction to a pitch can be.

Let me just quantify that slightly.

- A bad pitch is an unrealistic, non-commercial or niche idea that has no audience or is unlikely to monetise itself.

- A bad pitch reaction is when you pitch to the wrong people, investors come in flavours and you need to find the right audience for your pitch. Pitching to just anyone who identifies themselves as an investor will ultimately lead you to a bad pitch reaction.

So what makes a good pitch and what is the right scenario to pitch in?

Creating a quality pitch deck takes time and expertise. If you're a first time entrepreneur then get help. Accountants and lawyers are the first port of call and then subject matter experts can all help you get the right vernacular. The slides must be accurate and succinct and must cover all the right aspects that the potential investor will need to know to understand if this is an idea that appeals to them.

Simply:

1. Who are you / who are the team

2. What is idea / problem you're solving

3. What is the solution your developing 

4. What is the revenue model / who is the customer

5. What is the cost of developing the solution

6. What is the time-scales / time to market / 1st £ of revenue

7. What is the exit strategy / Time to exit

At the end of this the investor should be able to rule you in/out of their thinking. They either understand what you're saying, like it and want to continue or they don't get it and you both need to draw it to a close and move on to the next opportunity. 

Based on watching the Audi pitch stage at WebSummit, this is what you cant do:

- Tell the investor they're wrong when they play devils advocate
- Dismiss pertinent questions
- Speak negatively in response to a potentially negative point
- Not look directly at the investor whilst being challenged
- Clearly make things up on the spot to negate a question
- Be anything less than accepting about the advice your given

I watched a number of people pitching just fail to deal with the questions from the panel after their initial pitch 4 minutes went reasonably well. The questions are a pre-cursor to a formal period of due diligence and the investor can judge your proclivities, quirks, attitude and personality as part of that due diligence process. 

There are a few things I can recommend as part of the post-pitch questioning:

- Only use positive language - I am, I will, I can, I accept
- Avoid negative language - I guess, If we're lucky, Maybe
- Look at the person who is asking the question directly, not your feet
- If you don't know the answer, tell the investor you will contact them later with the correct information
- Ask questions back following an answer to a question. "The answer to the question is X, is that an answer that is acceptable or meets your investment requirements?"

Summary

There is a school of thought with pitching that "less is more", its something I agree with. Many pitches get way to technical and detailed. I think that 5-8 slides is enough with 1 minute per slide. You should then be engaging with the investor directly opposed to broadcasting to them. Use the discussion as a part 2 of the pitch. Its pretty impossible to secure the deal in the pitch but its very easy to lose the investors interest so the pitch and the audience must line up perfectly, the pitch itself must be meticulous and the delivery must be well rehearsed and optimal.