Author Archives: Michelem

Last Thursday I had the last class of another course (Business development lab, which I think most of the people in Technology based entrepreneurship are taking as well). During the class, we watched some Dragon’s den pitches. If you don’t know what Dragon’s den is, it’s a TV show where entrepreneurs pitch their idea to potential investor. Since it’s a TV show, it doesn’t necessarily shows what happens in real life, but it teaches some valuable lessons on what to say and what not do say during an investor pitch, especially in anticipation of our final BDL pitch.

Now, when pitching to an investor, we tend to speak too much in an attempt to appear confident and to show that we know what we are talking about, but most of the times that’s not the case, and after some question from the investor the answer is “No”. Hopefully that won’t be the case for us, since we prepared 4 months for this (I’m sorry if the people who are not taking the BDL course cannot relate). But what then? Say we find an investor who is willing to invest in our company, do we blindly say yes? We have to remember that a pitch it’s not an exam, and we are allowed to ask investors question for our own interest, it’s our company we are talking about after all.

So, what are the questions an entrepreneur should ask an investor?

• What’s their investment history in your sector: this should come with no surprise. An investment is not a bank loan, and an investor has the same interest as you have to make your company successful. Choosing an investor who already know your sector can give you some important advantages and insights.
• Do the prefer to lead or to follow deals: finding a lead investor is crucial. A lead investor is simply put the first person who puts money into the deal, and prioritizing leading investor over follower investor can really help your fundrasing process. Now, you may notice that since the first investor who “puts the money on the table” is the leading investor, by definition the first investor you find IS the leading investor, but that’s not the case. A leading investor is more than that, as he is the proof to other investor that your company is worth attention, and getting a first small investment (like follower investor tend to do) can give out the wrong message.
• What’s their investment capacity at the moment of their investment: investor are people as well, and don’t have infinte money (or capital) to invest. Finding out where they stand in their investment cycle can help you figure out how seriously they can consider investing in your company.
• What is their decision making process: again, real life it’s not Dragon’s den, and it might take time to get an answer from an investor. Knowing how they make a decision and evaluate an investment can help you determine how long it will take before the deal is finalized.
• What information do they need before making a final decision: while you should have already give the potential investor all the information you deem necessary, sometimes different investor can look for additional information in order to get more comfortable. Providing this information straightaway can help you find an investor earlier.

This question were adapted from an article I’ve found that i thought it was worth taking notes, but that I sadly did not save. I will update the post if I find it again.

On the 3rd of May I attended the fourth event of the Women @ EIT at the EIT CLC in Kista. When I read the description of the event on facebook I thought that the event would consist of lecture on how to perfect our pitching skills, so I was really surprised when I found out that the “training session” made up 90% of the workshop. The guest speaker was Anjali Virmani Paul, business coach at KTH Innovation, who explained to us how most of the times a pitch is not something staged, since most people find team members, customers and investors in weird places, like toilets or elevators, thus elevator pitches. It’s not hard to see how in an elevator you cannot rely on visual aids, like slides, and you cannot practice an elevator pitch, since it’s not a performance. In an elevator pitch what matter is your ability to make the person you are talking to what your idea is, following this useful points:

• The hook: you have to grab the attention of the person you are pitching your idea to.
• Who are the customers and what are their pains.
• Why you. What makes you different from the competition.
• What you need, wether you need an investment or team members .
• The three next steps you will take to take your startup further.

Now that we knew what to talk about, another important step was to understand that how we talk about our idea is equally important. Considering that a potential investor has to listen to hundreds of pitches every day is hard to stand out, moreover, when you start pitching your idea to someone in an elevator, you don’t really know wether that person is a potential investor, a potential customer, a potential partner or a potential team member. But how can we know when a pitch is effective?

The four criteria we were presented to measure the effectiveness of the pitch were:

• Words: jargon/technicalities vs stories/data.
• Tone: variation in pitch, pace, volume.
• Body language: gestures, eye contact, posture.
• Compelling: uniqueness, attention.

After this introduction we started the training session. Every attendant had 2 minutes to think about the idea he or she wanted to pitch, and to write down some guidelines following the points above. When the 2 minutes expired, we started the pitching session. Each person had 60 seconds to pitch his or her idea, after the pitch Anjali gave some feedback on the overall performance, making clear where we did wrong and what we could have done different to improve the effectiveness. Each person in the audience gave feedbacks as well, writing them on a post it. This feedbacks weren’t on the idea itself, rather on the pitching technique, and wether it was effective or not. The audience was also divided in groups, which changed after every pitch. This group had to give different kind of feedback (positive, negative, from a customer prospective and from an investor prospective).

Now, let’s talk about my pitch. Since the training session was not about getting feedback on the idea itself, I decided to pitch the app I’m building, which involves medical and recreational cannabis, so I knew beforehand it would have been fun to see the reaction. I also was, and still am,  aware that I et nervous when I speak in public, especially when I get to the end and I don’t know how to wrap the pitch up. 

Needless to say, Anjali agreed that what I pitched was risky, and she is against drugs, period. She explained how a pitch like this is risky in a way that it really depends who you are speaking to, it can be a strong yes or a hard no. In this case it was, for her, a hard no, and she suggested that I could have tried a different approach, trying to separate my target customer from the person i’m talking to, since it’s hard for a person against drugs to try and understand what the pain of a person which uses cannabis are, and this can put him at unease. But to my surprise the feedback I got weren’t bad at all, beside the one that noticed I was getting nervous toward the end, which I expected.

After the pitching session, we were asked to tell which of the pitch we remembered, and to write the name, the idea and some quotes of that pitch on a post it and give it to the person who pitched the idea. This was more difficult than expected, as a proof that pitching is really something that has to be perfected if you want to be remembered. Surprisingly (or not), no one remembered mine.