Pitching to investors versus customers

The Mass Technology Leadership Council held its 12th Annual Investment Conference yesterday. There were 19 companies presenting, all looking for early stage funding. Later that day the Keiretsu Forum Boston, an angel investor group,  held its screening meeting where 8 more companies presented. Twenty seven new companies in one day. That is a fun day.

The MTLC Annual Investment Conference was a case study in how to present your company elevator pitch in 30 seconds and your business plan in 10 minutes. At the beginning of the conference each company had 30 seconds to give their elevator pitch to the entire audience. Then the companies were split into two rooms and given 10 minutes to present their business plan. Later there was a luncheon / demo room where you could spend unlimited time with each company.

The 30 second elevator pitch is best used as a teaser. The best presenters posed a "what if" question or a problem scenario then said "come to our presentation to see how we solve this problem". They gave you just enough information about the company/product to know what problem it solved. Perfect! Every company pitch should start with what problem you solve for customers.

The 10 minute business plan pitch can be very effective if done properly. The best presenters covered; what problem do we solve, what are the alternative solutions, why are we better, how big is the market, what have we accomplished so far, a sampling of customers, experience of the team,  how much money are we looking for, and financial projections. Nine slides in 10 minutes. No questions allowed. Perfect!!

There were some presentations that still had me baffled after 10 minutes. I had no idea if they were selling a product or a service, if it was hardware or software, who the competition was, how big the market is, etc. Some presenters spent a lot of time explaining the technology or implementation. Others got too deep into the details, or worse, too far out into the 10 year vision.

Pitching to investors is different than pitching to customers. Investors care about some of the same things, but not to the same depth as a customer. Investors care about risks, competitive advantages, competition, market size, cash flow, and exit strategies.

Entrepreneurs should have two very different pitches for investors and customers. If you are raising a round of financing go to a couple investment conferences and see what works. Put yourself in the shoes of the investor. Try to decide in 10 minutes if you are interested in a company, and keep track of which factors are most important to you as an investor.

The customer pitch needs to be different too,  for technical audiences versus business people. The technical audience wants deep technical content. They want to know how it works, how it integrates with what they already have, and why it is better. The technical people are usually advisors...they don't have budget control and they don't make the purchase decision. But, they can eliminate you from the approved vendor list.

Business people care about solving business problems. They do NOT care about how it is done from a technical standpoint. Business people care about how your product or service will help them provide better products or services to their customers. They care about customers and business. If you are trying to sell a productivity product or service (better, faster, cheaper, smaller) it better translate in some way to customer benefits, not employee benefits. Business people have the budget and usually make the purchase decision.

For most of you this is boring, been there, done that, stuff. But, you would be amazed how many start-ups miss these simple "truths" when pitching their company to investors or customers. You don't often see 27 companies pitch in one day. When you do, it becomes clear what works and what doesn't. The differences are important.

Comments

[Dharmesh Shah]

Great post, and sounds like an exciting and fun day.

It would be interesting to know what percentage of the 27 companies you think "hit the mark" in terms of focusing on the right things based on the situation and objective.

[panasianbiz]

I really appreciated the distinction made between pitching to investors versus to customers, and the emphasis on what investors would be interested in. This was really insightful and informative!