On a recent chilly Tuesday evening in the basement of Hill Country Chicken in Manhattan, New York, a couple dozen entrepreneurs are seated at red-checkered tables, munching on chicken legs and sipping beers while testing the pitches that they will make to a panel of judges the following evening. This was Challenge Cup, an international 16-city contest run by Washington, D.C., incubator 1776 to identify the most promising startups in the areas of health, energy, education, and smart cities.
Each contestant would each have one minute to pique the curiosity of the judges. Two entrepreneurs from each category would then be selected to give a 5-minute followup pitch. This competitive environment is not much different than real life, where entrepreneurs must deal with the very limited attention spans of potential investors and partners.
Evan Burfield, a founder of 1776, was onhand at Hill Country Chicken to offer the contestants some pitching advice:
1) Don’t make your pitch a hurried version of your full business plan. It’s not possible to cram everything you want to say about your startup in an elevator pitch. Present the problem, explain how your product or service provides a solution to that problem, and then present your startup’s value proposition. In other words, don’t get ahead of yourself and start talking about revenue cycles when your audience doesn’t even understand your product or why there is a need for it.
2) Don’t lose your audience. Explain your business in the simplest possible terms and avoid industry jargon. Statements like, “we create integrated platforms that leverage existing resources for maximum social impact” is empty language that will cause eyes to glaze over. Speak in plain English and don’t assume that your potential investor is knowledgable about your industry. Making a pitch is like building a house. You lay the foundation first, then the first floor, followed by the second floor, and then the attic. Don’t make the mistake of starting your pitch with the attic.
3) Demonstrate “traction.” Traction is defined as core metrics that show the viability of a startup. In most cases, traction means revenue, but it could also be defined, for instance, as number of downloads. Traction has replaced good software as the key ingredient for attracting investors.
4) Understand the new transparency. Think twice about embellishing your startup’s traction. Armed with social media, big data, and analytics, investors have at their disposal a wide array of due diligence tools. AngelList, Facebook, LinkedIn, Twitter, Compete, and Quora are just some of the platforms investors use to research startups.
5) Distribution is more important than product. Investors want to know how you’re going to reach your target audiences.
6) Tactics are more important than strategy. Investors appreciate a carefully thought out vision, but they need to be convinced that you can execute the blocking and tackling.
7) Rehearse, rehearse, rehearse.