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-You're in an elevator next to a venture capitalist who could invest millions in your business but doesn't know the first thing about it yet.
You have 90 seconds to explain, starting now.
That's the premise of the Elevator Pitch Olympics, a yearly event at the Wisconsin Early-Stage Symposium
. This year, a panel of eight investors dished out advice and a few hard knocks to hopeful entrepreneurs who presented their businesses in front of an audience.
Most people speak at between 100 and 200 words per minute. Think about the blurb on a book jacket that's about how much information the pitches should convey. The better presenters used their time well to persuade the judges that it would be a good idea to take a meeting or read their business plan in more detail.
The investors-cum-judges emphasized that each one of them is different. Some are angels meaning they'll invest in smaller opportunities and often put in less than $1 million even with a group investing. Others are venture capitalists, investing institutional money in batches of millions at a time and looking for companies that can grow explosively. Some invest in your industry, and some don't.
It's helpful to know who you're targeting with an investment pitch and what their background is, but the "elevator pitch" knows no boundaries. In the elevator, you don't have time for background research.
A few of the take-aways from the event:
Going off on a tangent is a little like driving off a bridge. Every sentence counts.
Don't live in the past. Going over company history and the backgrounds of the founders takes a long time and only adds to the pitch if it's something really distinctive.
Investors want to know what your product does, but they don't need a step-by-step walk-through. Leave time to tell them why your product beats the competition, how big the market is, and how you'll make money.
They don't necessarily like to hear that you "don't have" any competition, because you do, and you're at a disadvantage if you don't know who it is and why customers will choose you instead.
Existing customers are a big plus. But a single, large customer early on could be a warning sign that your product will be customized too much rather than meeting the needs of a larger market.
Investors are concerned about barriers to entry, such as long sales cycles to reach institutional customers in education and government. You'll stand out if you have a plan to overcome those barriers.
Eligibility for government grants means an investor can take advantage of "free" money without giving up any equity. (But don't count on grants to increase the valuation of a company. Investors like free money, but they don't necessarily want to pay for it.)
Whether an investor is interested in your pitch might depend on others they have heard recently. You can't control that.
Analogies can help you communicate a complex, technical product idea. But in a fast-talking, 90-second pitch to someone you've never met before, make sure they know it's actually an analogy, and not a literal description of your product!
A minute and a half is plenty of time if you're well prepared. Practice in the mirror, practice with colleagues, practice with your coffee mug. Several presenters read from notes are you always going to have those handy?
If you know your pitch by heart, you can tell everyone you meet why you're going to be the next big thing.Related stories
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