As part of my consulting services, I am tasked with evaluating companies for VC, private equity and angel investors.
I recently attended a private pitch by an experienced entrepreneur to evaluate the potential of the company for some interested investors.
The entrepreneur was the prototype of what many aspiring entrepreneurs or early stage founders wish they could be:
- Silicon Valley startup veteran
- Multiple startups
- VC funded in previous companies
- Had successfully exited and made his investors money
- Talented engineer
In short, he had a sterling track record, impeccable credentials and noteworthy references.
To the run-of-the-mill tech startup founder, he was the poster child for “who gets funded when I don’t.”
And, he failed.
During the pitch and questions, I actually tried to help him advance his cause. I was the only other person in the room with relevant technical experience, so I tried to bridge the gap between the entrepreneur’s technical jargon layered with ephemeral business assertions and the non-technical money guys in the room.
Despite my efforts to translate to them what was, I believed, an opportunity worthy of a follow-on meeting, he failed.
This was the second time I’d seen him pitch. I “got” his technology, his business model and, at a high level, his market opportunity.
Nobody else did.
Later, I provided some feedback to him to assist him in future pitches:
- You didn’t establish clearly that this is a product company (At the last pitch they all thought it was a consulting gig trying to become a product company, which in an investor’s mind = death)
- You didn’t establish clearly what the core technology was and what it means for the market (competing technology, market direction, external forcing functions driving adoption, etc.)
- You didn’t establish the foundational elements that added up to disruption
- Why and how the competition is trapped by their existing business/sales models
- How you bring disruption to the market due to price point and speed of implementation (usually only one is required: price, speed or capability)
- Most importantly, you didn’t clearly position the company with a concise, pithy and specific description, e.g. “It’s X for Y”
To his credit, he took the feedback well and indicated he’d use it to improve his future pitches.
That’s one sign of someone who has a chance to succeed: they are coachable and are always looking for ways to improve, learn and grow.
But, the big takeaway in this experience is that even if you have all the right boxes checked on your resume walking in, even if all the signs are positive that this should be a winner, even if you look the look, talk the talk and have walked the walk, unless you effectively and succinctly tell your story, you will fail.
For him, on that day, it was a swing and a miss.
When you are doing startups, you don’t get very many plate appearances, so you need to concentrate on making every at-bat count.