Today was the day of Elevator Pitches, and 30 students or so had the chance to present their idea to “potential investors”. Inspiring!
As you all would know, a short pitch format is typical when trying to get first attention from an angel investor- and a small discussion was raised regarding how much to prepare for these 60 seconds. Personally, I would have wished not to trust my freestyle skills as much- you need to know the timing and use your time well. On the other hand, you should not trust the audience to be as passive and nice to you as they were this time. It is easy to get lost in your script, knowing it too well, when being interrupted by an impatient/ interested investor. A 60 second pitch is good to memorize if recording a video for a start-up contest, aiming for perfection, (see some examples at http://www.svd.se/naringsliv/framtidens-entreprenor/), but in reality- no pitches are the same!
Most of you have probably seen some international version of the Dragons’ Den, which is a reality serie of entrepreneurs pitching their ideas in front of actual investors. If not, I would highly recommend you to benchmark your personal performance of today with the videos to be found on youtube. Would you be ready for follow-up questions? How well do you actually know your business?
During my studies at KTH I have worked for the venture capital firm of one of the Swedish dragons/investors, Mats Gabrielsson (Draknästet). He is being known as a strong capitalist, and his voice echoed in my head during the presentations today “Why don’t you give me a business plan? What are your budget? Forecast? How will the money be realized, and when?”. The most common mistake, I have learned, is too much focus on the actual product or service. The company would surely exist thanks to what you sell, and investors need to be sure it functions as it should, but the greatest interest will most always be on the actual outcome (also in line with the neoclassical economics of maximization). This may be obvious, but is sometimes easy to forget as an entrepreneur- being proud of what you have developed for many years.
However, to get those non-capitalists out there in a better night mode- you can of course get investments playing on other strings than the “Greed inducing” one (inducing expectation of high business success). Here is an example of philanthropy, from the same serie and with Mats as one of the investors. English subtitles, 2 parts. I was actually very lucky meeting this young girl with cerebral palsy, seen in the video, in the office about two years after- walking all by herself thanks to the elektrodess. Happy watching!
And let me know if you have any comments or questions 🙂
// Benjamin Wahlberg