Entrepreneurship is not a solo act. It is a team sport! Who you surround yourself with can make or break a startup. This includes partners, employees, advisors, mentors, directors, attorneys, accountants, incubators, accelerators and the list goes on.
Leverage your team, think like an investor and create an awesome pitch.
The first step in accessing capital is to build a world class extended team who you trust, and then leverage the networks of that team and your local entrepreneurial community. Investors expect you to be able to find a warm introduction. That is your first test.
Pitching to these investors is not rocket science, but you do need to get inside their heads and understand what is important to them. And remember, the goal of a pitch is not to close on funding; it is to get the next meeting. You want to:
- Open investors minds to your vision, not answer every question;
- Grab their interest, not overwhelm them;
- Get them excited, give the required info, but leave them wanting more; and,
- Create interest in a deep dive meeting.
The format is not as complex as one might think. Everything in a pitch falls into three basic buckets; team, market and product. Investors will actually be working their way through what amounts to a decision tree. It is a little like Maslow’s Hierarchy:
TEAM –This bucket is about trust and the concept of “safe hands.” Has this team built my trust and can they execute? Do they seem coachable? Do they have the required experience, skills and passion for the venture? If not, the discussion could be in trouble.
MARKET – The magnitude of the opportunity, the money, and the “problem”. Is the market size and revenue potential sufficient? Is this scalable? What is the marketing strategy, and are the numbers realistic? Is the customer and problem well defined, and is the business model sound? Do the economics make sense, are there realistic exits and is this an investible opportunity? If not, it doesn’t matter how great the solution and technology is, the discussion is on the rocks.
PRODUCT – If you pass the Team and Market Opportunity hurdles then you have an engaged audience to talk to about your awesome solution. The product/technology, value proposition, IP, barriers to entry, competitive landscape and the investors will listen closely, judge accordingly, decide if this merits going into a deeper dive and ultimately into due diligence.
Creating an investor presentation is part science, part art. And to make the pitch truly compelling takes skill and a lot of practice. The wisdom of the community is available for the asking. It is “open source.” The investors want you to succeed. For those entrepreneurs who want more details about the “buckets” mentioned above and step by step instructions on how to create a 15 slide investor deck, we have compiled the wisdom of the community into an Investor Pitch “Cookbook.” Visit our site GrowCT.com to connect with us and learn more.
Entrepreneurship is a team sport and the CTSBDC advisors are available to be part of your extended team.
The Connecticut Small Business Development Center (CTSBDC) provides no-cost, confidential business advising services to small business owners and entrepreneurs in every stage of business development and growth in the state of Connecticut. For more information or to register for business advising, visit GrowCT.com, Facebook.com/GrowCT, Twitter.com/GrowCT and LinkedIn.com/company/ctsbdc or call 855-428-7232.
(Patty Meagher is the Technology Business Advisor for the CTSBDC, founder of the Stamford Innovation Center and former principal at Dakota Ventures. The CTSBDC Venture Portfolio has mastered the art of the pitch, and successfully raised $41MM in Fiscal Year 2015.)
Read other Friday Focus columns.
Friday Focus is an online-only weekly series of columns focusing on human resource, business legal issues, technology, and marketing. Interested in participating? Send an email to Keith Griffin at kgriffin@hartfordbusiness.com.
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