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An overweight man with a beard once told me, “We are all selling something.” And while that girthy gent may or may not have been me in the mirror, either way, it’s largely true. Whether it’s a product, a service, a story, a belief or whatever – nearly everyone is selling.
If you’ve ever started a company – particularly in tech – before you can get it off the ground, more than likely you’ve had to sell your idea. The reality is that most great ideas simply cannot come to fruition without funding – from angels, VCs, private equity, individuals, friends and family and the so on. You pitch to prospective investors, and most of whom generously crap all over a concept that you’d convinced yourself could very well save the world as we know it.
I went through the process some nine years ago – trying to launch a marketing and reputation management consultancy that my partners and I believed was conceptionally ahead of its time. We pitched the idea to a number of would-be backers several times over. It was emotionally draining, at times disappointing, periodically exciting and somewhat painful until we finally found a believer and got it off the ground.
Welcome to startup life, and it’s played out every day on shows like “Shark Tank” and across the U.S. at your friendly neighborhood startup accelerators and incubators – from YCombinator to TechStars to Capital Innovatorsto Enterprise Works to 1871 to CIC and everything in between.
Last week, 15 early-stage companies from St. Louis’ burgeoning startup ecosystem traveled to New York and the Thomson Reuters building on a trip coordinated by Reuters, the St. Louis Regional Chamber and Accelerate St. Louis. The reason? Yep, five-minute pitches in front of a group of more than 100 business analysts, bankers, prospective investors, media and other slack-jawed gawkers in hopes that someone might think their idea is the greatest thing since Kit the talking car in “Knight Rider.”
Companies ranged from data analytics to mortgage lending technologies, social media technologies, tech to improve healthcare outcomes to senior care monitoring, cyber security and even artificial intelligence-driven question answering.
And knowing just how challenging that pitching blind in front of a full room of strangers can be, I asked five of the startup CEOs what they dislike most about the pitching process:
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Evan Schnidman of Quiet Signal, which analyzes market chatter and turns it into actionable signals for the financial services industry: “When doing a short pitch, it is impossible to convey the complexity of our business. So you are left to stand there and explain only the value proposition and essentially tell everyone how great you are when all you really want to do is show them how great you are. This type of pitch lends itself well to businesses that have little substance, poor traction or weak technology and actually hurts complex businesses by comparison. When doing a longer pitch to investors, the worst part is talking to someone who knows a little, but thinks they know a lot. Odds are that as an entrepreneur you know more about your industry than most of the investors you meet, but you have to sit there and pretend they are asking the best, most insightful questions you have ever heard despite the fact that your 19-year-old intern asked you the same question last week. VC pitches end up being a game where a lot of energy is spent educating most investors without letting know now they are being educated. Once they get it, that is when you can really dig into the value proposition and evaluate whether they can provide something beyond just cash to your company.
Nick Szabo of Swizzle, which uses artificial intelligence to analyze and pull insights from large volumes of content and is part of the esteemed Arch Grants program: “The worst part about pitching for me in a setting like that is you carefully choose your words to have the most impact in your short time, but then the audience hears 14 other people and your message gets lost. I prefer doing pitches with less companies just because the audience has a better chance of remembering what you said.”
Christina Hawatmeh of Scopio, which curates, licenses and publishes relevant, fresh and relatable, user-generated images and videos: “The worst part is not being able to talk to chat with the other entrepreneurs as much as you would like, in a big demo presentation like (the Reuters event). Usually in big shows and demos, we’re only able to talk to who comes up to our booth. So in many shows we leave not knowing much about the other companies. But in this case, we heard their pitch twice, in Saint Louis and New York so that was fun.”
Amit Kothari of Tallyfy, which has a cloud app that helps financial institutions standardize and simply business processes: “The worst part about pitching is trying to ensure that your story resonates with a diverse audience. Sometimes, the room is full of a combination of people. For example – investors (who buy the vision), customers (who have a specific problem in mind) or partners (who want to know what’s in it for them to work with you). The other difficult part is gauging who is interested in talking afterwards and who isn’t. If events had a simple way of someone declaring “interest” in talking to someone else for any particular reason – that would make match-making between two people much more effective.”
Josh Holstein of CellARide, which allows car shoppers to more easily find pertinent vehicle purchase information, lets dealers gain a lead capture tool and helps brands gain insights into how shoppers interact with vehicles: “The worst thing about pitching in any setting is to know your audience and to have to adjust your presentation on the fly. For the presentation (in New York) I had to condense my 12-minute into a three-minute pitch, and for someone who can ramble on like myself, that’s a challenge.”