7 tips for a successful business pitch from an entrepreneur
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The business of pitching to investors can be intimidating. For many in the UK, it conjures up the bright lights and steely glares associated with the BBC's "Dragon's Den," the hit show in which budding entrepreneurs get three minutes to pitch their business ideas to multi-millionaire investors.
But the success of small businesses can often rest on success or failure, and especially in the competitive world of venture-backed startups, getting it right has never been more important.
Kelsey Skinner is an engineer and entrepreneur who works in the low carbon industry. Currently, she sits on Shell's "Springboard" programme, which awards funding for low-carbon innovation UK entrepreneurs - and in that capacity, she has sat through enough pitches to know what separates a great one from an uninspiring one.
Here are some of Skinner's tips for making a successful startup pitch:
1. Tell the story of your business - and how you've improved.
Skinner said that the most successful pitch she has listened to was made by a low-energy lightbulb company who told the story of their business - including the things they'd got wrong.
"What stood out during their presentation was the way they built their company," she said. "They spent an entire slide on what went wrong with their prototype and the lessons learned - they told us, 'we made the light bulb too heavily and our customers didn't like it,' and said 'our manufacturing cost is too high'."
"It showed a growth mind-set and thoughtfulness around what are they were doing right and wrong, and how to make it better. In that way, it didn't feel like a sales pitch, it felt like an open honest conversation about growing their business," Skinner said.
2. Give a clear and thorough presentation.
"Overall the main thing we look for is a clear, well-structured pitch," Skinner said.
"If it's a formal presentation, that covers all the key areas - what is the key differentiation, what really makes this different from market competitors, why is this a company that has really differentiate itself from others from having this idea?" Skinner said.
If it's a less formal environment then Skinner looks for someone "with the ability to dive in and out of the different sections depending on the questions" she asks them.
3. Don't underestimate the importance of differentiation.
Skinner said that a common "red flag" during a pitch comes when firm fail to express why their product is sufficiently different to its competitors. Without differentiation and realistic market insight, a product is "just an idea" - if a pitcher doesn't understand what makes the market different, or why the customer would pay for a product, then the investor is unlikely to.
Anyone making a pitch needs to understand why and how their company can capture value from the customer, Skinner said - that way, an investor can assess whether that value will be big enough to make a good return on investment, and whether the start-up has high growth potential.
4. Surround yourself with experience - 'a few grey hairs.'
Having someone who has "been there before" provides invaluable experience, Skinner said. Find some who's "lost millions (maybe even made a few), with years of early-stage investment experience, and get them to be your funding advisor."
She cites a Silicon Valley saying: "It takes seven years and $30m lost to make a good early-stage venture investor."
5. Treat it as more than just a sales pitch.
Successful pitches are ones where people demonstrate an inside-out knowledge of their business - and successful pitchers "are those who know their businesses inside and out and are confident of that," Skinner said. "It's apparent their pitch is less of a sales job, and more about why they want to build their business."
6. Show off your team.
Skinner said that demonstrating the insight of your team, and its knowledge of the industry into which it is pitching, is essential. "Ideally, the pitch presenter and the core team comes from the industry [into which they are pitching], and understands the market dynamics of the industry well."
7. Avoid using the word 'should.'
As an extension of that, it is a good idea for pitchers to avoid the word "should," as " it "shows you don't understand your customer's buying decision or the customer's habits," Skinner said. Instead, clearly and consistently demonstrate confidence and knowledge of you bring to your own particular marketplace.