A good pitch can propel a startup into the next phase of their development, landing them financial backing, clients and partners. Angel investor and coach Diane Tea talks about what she looks for in a pitch.
What kinds of pitches do you see and what is your main area of interest?
I left the corporate after 20 years to start my own company, B-Green, in 2017. The company has three pillars: development investment in real estate; I invest in tech startups and hold several mandates of board directorships mainly in startups; and I provide coaching in areas in which I have professional experience. I have a Master’s degree in ICT and I decided to invest in high tech startups. I’ve become very picky in terms of what events I go to to make sure that I’m not wasting my time listening to startups that wouldn’t make sense for me.
What was the worst pitch you ever heard?
I can count the good pitches on the fingers of two hands. But there are many, many bad pitches, mainly because of lack of training.
There are two that stand out for me. I was a jury member at Paperjam Startup Stories for three editions in a row and it was there that I saw one of the worst pitches. It was not the worst because the entrepreneur didn’t present well. His performance was average, but he went on stage without any presentation materials or visuals. Even if it’s just for three, short minutes, it’s very hard for the audience to concentrate and relate the words to something more concrete.
The second worst pitch had an overly crowded, overly text-based presentation. You need to have a good visual so that people can, within a few seconds or milliseconds, understand what the entrepreneur is talking about. The third worst kind of pitch is when you see an entrepreneur just reading the notes while presenting. You lose the audience by doing this.
How about the best pitches?
There are several that I remember, the most recent was in September at the Cluster4Logistics matchmaking event. The entrepreneur was from Flynex, and I even commented to the guy that he was a charismatic and convincing entrepreneur. His was the best out of the five pitches because he was very articulate and very clear in his presentation. His presentation and pitch were comprehensive: they covered every point that an investor like myself needed. I didn’t need to ask for further clarifications.
The speaker was very charismatic and I think this is not a given for every entrepreneur. Sometimes you can fight this shyness with training. But he had a natural ability to speak.
A second example is Ilana Devillers, from Food4All. It was the same thing: very charismatic, very articulate, very clear in the presentation. In both cases, the entrepreneurs were able to tell stories that touched the hearts of the audience. Even if the first example was techy, he put that across in a way that a non-techy audience could understand.
What are your golden rules for a perfect pitch?
Storytelling, include everything an investor will need to know in your pitch and train.
A good storytelling conveys how much the entrepreneur is valuable and how much potential the business has. There should be a proper ratio between the form and the content depending on the person in front of you and how much time you have.
If you are networking, you have only 30 seconds to pique the interest of the person. Our matchmaking is five minutes, which is a bit longer than a pitch contest, which is three minutes. For each, the ratio needs to be adapted.
Maybe you have piqued the interest of the investor, partner or customer, and you have 30 minutes to meet the CEO. Then the content would take over the form.
The second area is to make sure that what you say includes everything that an investor or customer or whoever is in the audience is looking for. By this I mean the vision and mission statement, the problem that you’re solving, your business model. The second message that needs to be in the pitch is commercial traction: all the things that have been achieved. I have seen many pitches where they don’t talk about commercial traction. If you don’t talk about it, then it doesn’t say much about the future business potential.
What is the growth potential? What is the size of the market? How much is it possible to scale up? How much are they differentiating themselves? What is the competitive advantage of all this? I would say that growth potential needs to be part of the pitch.
Then they need to talk about financials: budgeting, the ROI, etc anything an investor or customer would be looking for.
One thing startups are starting to include in the pitch is the team. No one would want to deal with a startup that is a one-man show. They need to talk about the team composition, its cohesion, the expertise of each member, and their complementarity. Because all of this will tell the audience how this team will cope with future growth. When a team is complementary, they will define and implement good processes that would allow the startup to cope with the growth.
The third golden rule is training. The ability to pitch is not innate–it’s something that we acquire over time by training ourselves. Practise, even if it’s in front of a mirror, friends or family. Record yourself and try to spot where there could be some deficiencies. The best training is to go out there, and try and even if you believe it is a failure, at the end of the day, there’s always a win to get out of trying.