Do’s and Dont’s of a startup pitch
By Diego Serebrisky.
After seeing hundreds of pitches from startups, I want to present my recommendations on what works and what doesn’t in a pitch. In many cases an entrepreneur has only one opportunity to present to a potential investor and therefore having and executing the right pitch is key to start a dialogue with the investor.
I need to disclaim that I am an analytical and rational investor, so I like fact-based presentations versus emotional ones. Theatricals in a pitch are not for me. I invest in entrepreneurs, not in actors. A pitch is a short presentation of a startup by an entrepreneur with duration anywhere from 2 to 15 minutes but typically in the 3-5 minute range (and in many cases strongly enforced by clapping, rings, etc., when time is over).
There are longer presentations, but those have a completely different dynamic and normally time restriction is not as challenging. In most instances the purpose is to present the startup to a group of investors for fund raising for the first time. You, the entrepreneur, need to keep what is the purpose of the pitch in your mind as this will dictate what and how you present.
So, what are the do’s?
Regarding the what, the content, you need to focus and communicate the key aspects of your startups in a very short time. You shouldn’t waste presentation time in things that are less important or irrelevant for the purposes of your pitch.
There are six things you need to present: what problem are you solving, what’s your product (so the solution to the problem that customers are willing to pay for), the size of market and who are your competitors, how is the business going to make money (It has to be a business that make money at some moment in the future!), what you have achieved (your metrics) and who is the team.
Any other information you consider relevant is secondary and should be provided only if time allows but never at the expense of the five concepts. The typical by-the-book order would be as presented above, however you might do strategic order changes depending on the type of startup. If you have a very interesting product, one that the audience will relate to quickly, you can start with the description of the product to create an emotional connection. If you have a very strong team with lots of applicable experience, you can present the team early so to gain credibility for the rest of the pitch. If you have achieved a lot already, say so early on to grab the interest of the audience.
I want to emphasize that presenting your product by explaining what it does, or showing a quick demo or at least showing some screenshots is especially important. I have seen too many entrepreneurs that don’t take the time to explain what their product is and does (what is the functionality rather than a technical description), probably because they assume everybody knows.
For me at list, it is very hard to follow the rest of the pitch if I don’t understand what the product is. And if you can’t explain the concept of your product concisely, then you have a problem – how are you going to sell it to your potential customers.
Regarding the how of the pitch, the key is to communicate in a natural and articulated way, showing confidence and passion but without overacting. Your message is much more powerful if it feels natural rather than if it feels heavily rehearsed. The best actors look completely natural; they don’t look to be acting at all. You need to transmit the passion you have for the startup, which for the investor means you believe in what you are doing, want to do what you are doing and will be dedicated fully to it working as hard as you can to succeed.
Some don’ts I think it will be useful if I describe don’ts; things that you shouldn’t do in a pitch but that I have seen plenty of entrepreneurs doing them.
- Don’t try to create an emotional connection by mentioning imaginary users/clients by the first name – John is the accountant of company ABC Inc. and has a problem…– It sounds silly and unless you have a unique client, using example first names don’t generate any emotion from the investor.
- Similar to that, don’t use the word “imagine” to present a situation – “Imagine” that John wants to do “something”, “imagine” John wants to do it late at night, etc.– Again, it sounds silly, and frankly I want concrete situations not “imaginary” ones. The number of entrepreneurs doing this is absurdly high. I don’t know why exactly, but I suspect somebody told them that story telling is very powerful; but only if you have a strong or very interesting story to tell that audience will relate to. If not, it sounds like a bad story and it is better to focus on a factual description.
- Don’t explain things that the audience already knows – For example, for a European or Latam (as well as other parts of the world) audience dedicate precious minutes to explain that millions of people are fanatical about football/soccer. Just state the facts, maybe give one anecdote, and move on to the next concept in your pitch. The audience already has knowledge that you don’t need to repeat to them.
- As I said before, don’t over rehearse. This is especially critical if you are presenting in a language that is not your native language. Don’t try to memorize your pitch word by word. It will sound canned and not natural. You must be clear about the concepts you want to say and the vocabulary you need, but present naturally, almost improvising. I can assure you that after doing your pitch more than 10 times; it will come natural to you without the need to memorize it word by word.
- Don’t talk too fast, even if you feel you need it to say everything you want in the short time available. Talk at medium speed. If you talk too fast, people don’t have the time to process what you are saying; they get the words but not the ideas. This effect is compounded if you are talking in a language that is not native to you and your pronunciation is not the best.
- Don’t have two or more people presenting at the same time by switching back and forth between them. It generates a lot of distraction from the content of the pitch and doesn’t show that you are a great team, which I suppose is why teams decide to do it that way.
- Finally and very critical, don’t omit critical information, like discussing the competitive landscape or what are your metrics. If you do, it only raises suspicion that there is something wrong there you don’t want to explain.
Always keep in mind that the pitch is a way to generate interest in your startup from investors. You need to provide a snapshot of critical aspects of your company in a very short period of time, so they can decide to get more information about your startup and a one-to-one dialogue can be initiated. I hope this do’s and don’ts become helpful to you and other entrepreneurs. Comments are welcome.