Mistakes entrepreneurs make when pitching their companies

ppt A lot has been written about how to present to VCs. Last week I attended the Under the Radar conference here in Mountain View and was able to listen to 19 presentations. The format was simple: entrepreneurs were given 6 minutes to pitch, judges (VCs and industry experts) asked questions, and then the judges and the audience voted “American Idol” style.

It was interesting to see how once the first judge set the tone for the Q&A session (either positive or negative) the rest just adopted the same stance following the lines of the first judge. It was also quite remarkable to see how not necessarily the companies with the best solutions came up at the top. The presentation style made a huge difference and these are some of the most common mistakes they made:

  1. Leaving the team for the end: most companies talked about the team at the end of the presentation while running out of time. Presenting the team at the beginning makes the judges and audience understand and validate the rest of the presentation, showing why the team is competent to solve a problem in the industry.
  2. Talking about the technology and not about the solution: many of the speakers spent more than enough time talking about the technology without identifying the problem they were trying to solve. You can have a great technology (such as e-ink) but if you don’t have a market willing to pay for the solution (such as readers buying Kindles) then you don’t have a viable company.
  3. Ignoring the competition with statements such as “nobody is doing it”: when entrepreneurs say they don’t have any competitors then VCs think they haven’t done enough due diligence or they have a completely revolutionary solution that is going to change the world. Most of the time, unfortunately, the first explanation is correct.
  4. Assuming that if they build it people will come: many companies ignored talking about the go-to-market strategies, making VCs nervous about the “unforeseen” sales and marketing costs. Identifying a set of early adopters and a set of key driving features are great ways of staging growth and validating the concept before scaling up, and that should definitely be part of every company presentation.
  5. Being unable to identify 3 “dream customers”: entrepreneurs failed to name 3 ideal customers. If the solution is compelling and proper due diligence was done with potential customers then this question should trigger an immediate reaction and allow entrepreneurs to name, without even thinking, at least 3 “dream customers”. If they are unable to do so, that is a big red light…

When you have 6 minutes to make your case you need to think and plan accordingly. Even if you have 30 minutes or an hour, the first minutes are key as most people make their decisions early on. Plan, practice and test before getting to the audience that matters. Remember there are “rarely” second chances for a first impression…