Need Capital? It's Time to Re-Think Your Elevator Pitch
Most entrepreneurs have their elevator pitch down pat—that 30-second speech about their company that can be delivered in the time it takes to go up or down a few floors. But angel investors and venture capitalists on a panel this week recommended listening rather than talking.
“The first thing I want to see, is the person really aware and present? Are they really listening to me? Are they looking at me and connecting with what I’m doing, because if they’re not I’m just getting a spiel,” said Pamela York, founder of Capita3, a new fund in Minneapolis looking to finance women-owned and –led companies.
“Awareness is a huge factor in entrepreneurs,” she added. “I want to hear—here’s this big problem and here’s the solution I have. And more or less, here’s how we can make money.” York was one of three panelists at a Network Connect event, which aims to connect entrepreneurs and investors, at the University of St. Thomas this week.
Another panelist, Marc Kermisch, is president and chief information officer at Red Wing Shoe Co., and separately an angel investor who advises early stage companies. “Most folks take a shotgun approach,” says Kermisch. “I think you should be very focused on what the investor is interested in, and what their network is. I’m looking for, what else does this give me besides a financial return?
“What turns me off is, somebody who immediately launches into that,” he said, meaning details of the financial return. “Start out with who you are, what’s your background.”
Rick Brimacomb, moderator of the panel and co-founder of Network Connect, asked if there were “soft” mistakes that could turn the panelists away from a deal. “So for me,” he offered, “it drives me crazy when they say it’s an X-billion-dollar industry and I only need one percent,” he said. He’d rather see laser-sharp focus on the particular niche the company is targeting and how it will gain customers in that niche.
Said York: “A deal killer for me is if I sense the person isn’t operating from integrity. It’s so much better to be honest,” rather than try to answer a question glibly. “The whole process of building a company requires you to be so humble and open and grow, and if you can’t do that in a conversation you can’t do that with your company.”
Andrew Murphy, managing partner at Loup Ventures, an early-stage venture capital firm investing in artificial intelligence, robotics and related fields, is trying to raise his first fund, of $20 million, and so is pitching his own opportunity to investors right now.
“When you’re given the opportunity to pitch a potential investor on the elevator, the temptation is to try and spit it all out and get in all your good points,” he said. “I think you miss the opportunity to hear what they’re interested in. So asking more questions than making points seems to resonate, because it shows an emotional intelligence.”