For some good tips on how to perfect you 'elevator' pitch click here
To watch a professional and well executed pitch click here
Rob Kinna knows all about making a successful business pitch. The inventor of
Bak Jak, a simple device to prevent back pain problems for workers in the
car industry, entered BBC’s Dragons’ Den looking for £60,000. He left with
funding from two of the five infamous entrepreneurs.
Cornwall-based Kinna explains: “The way I prepared was to get my numbers
crystal clear and to make my presentation as simple as possible. My pitch
had ten points. It explained the size of the market opportunity, the need
for the product, how it solved a problem and how the money would be used.
“But I practiced the pitch before I went into the Den. I rehearsed it so that
I felt confident and I all tried it out on other people, although not family
and friends who are too supportive, and answered all the questions they
posed. When I went into the Den, I kept my hands clasped and knew that each
finger stood for a point I wanted to make. It gave me control over what I
was doing and time to build a rapport.”
Kinna perhaps had an unfair advantage. He is also innovation mentor of
Business Link Devon & Cornwall, advising local start up businesses and
early stage companies.
But investors all agree that a business pitch should be brief and clear yet
not over-rehearsed. Evan Davis, presenter of Dragons’ Den, who has overseen
some disastrous pitches, believes learning lines can prove fatal because, in
the heat of the moment, it is too easy to lose one’s way.
“I am looking for a simple elevator pitch,” says Lawrence Garrett, partner at
venture capital firm 3i. “If somebody is waffling then I would worry about
their clarity of thought, and clarity of thought is crucial.”
Unlike Dragons’ Den, would-be entrepreneurs are usually allowed to bring
printed presentations or notes to a meeting with investors. Start-up
companies should also take prototypes of any products. However, it may be
wise to take out patents or organise confidentiality agreements before
sharing the patent or business idea with external investors.
Once the idea has been spelt out, however, investors will be looking at the
individual or team making the presentation, the market research that has
been conducted and the potential gain on their investment before making a
decision.
Anthony Clarke, chairman of the British Business Angels Association, the trade
body for the UK’s Business Angels Networks who invest in early stage
businesses, explains: “I think entrepreneurs pitching to investors should
remember that these people are looking for an equity gain on their
investment. They are not lending money.”
He adds: “It is not ‘I want to open a hairdressing salon’ but ‘we have
developed something exciting with huge potential. We will be making a gain
for you on your investment and for us with our gazelle-like business’. Tell
the investor what problem the product solves, prove that it works and
demonstrate the potential for financial gains. There is a very limited time
horizon to hook investors, perhaps 60 seconds and two minutes.”
Investors have serious concerns about entrepreneurs who are unable to do this
because, they assume, that they would have similar difficulties selling the
product to customers.
“I am also subconsciously looking at the people doing the pitch,” adds 3i’s
Garrett. “I am thinking ‘can I work with them?’ I am looking at their style.
How passionate they are. If it is a team, I am looking at how they interact,
how the members defer to the leader. If they argue openly, it is pretty
clear they can’t work with each other.”
Tim Campbell, the first winner of The Apprentice who recently launched Bright
Ideas Trust to support business start ups, adds: “You have got to have the
right management team, but I am also looking for research to back up the
business idea. For example, what is the size of the potential market or the
sales of competitor products? I have a lot more confidence if I am presented
with facts and figures.”
Would-be investors agree that, while research is vital, they do not expect a
business plan to be definitive. Part of their role will be to finesse
business plans and to help with pricing and profit projections.
“If somebody comes to me with a product that is faster, cheaper and better
than the competition, I would not expect them to understand the price point
at which they could enter the market,” explains Garrett. “But I would expect
them to make an informed attempt at guessing it.”
The final piece of advice comes from Kinna: don’t be overfamiliar or
patronising. “I almost joked ‘I doubt any of you have ever needed one of
these’,’ he explains. “I later learned that Duncan Bannaytyne [one of his
investors] used to work in the car industry.”
