Business ideas and concepts are a dime a dozen – you probably came up with two in the shower this morning.
Too often during a pitch, I’ve witnessed entrepreneurs focusing intensively on selling their ideas, the fantastic market opportunities, as well as all of the profits they will be making. They pitch their ideas as being the “hero” – the be-all and end-all of why the investor should invest. However, there is too often little or no reference made to the more important facts: their own personal experience in the market; their understanding of the technology or skills required to make the business idea viable; and their teams’ skills and experience.
Seasoned investors are presented with large volumes of ideas almost daily, and are interested in investing in you and your team and not just your fancy idea, because they know that execution determines whether an idea will prevail or not. Before an investor will consider investing in your business, they want to be absolutely certain that you have a very clear idea of how you – and your team – will make it all happen.
My third pitching tip is make sure you sell your experience and that of your team
When structuring your pitch, you need to keep in mind the following three points:
- How are you going to execute on the idea that you are presenting?
- Who in the team is going to do what to make the idea come to life?
- How will you modify your idea based on market feedback and reality?
The answers to these three pertinent questions will ultimately determine the success or failure or your business idea, so make sure you have thought about every angle when preparing your answers. Emphasise your team’s gravitas of experience and discuss why you handpicked each and every member, based on the value that they add.
Investors look for individuals, and preferably teams, with the relevant experience and track records that will ensure that their business ideas have a higher probability of becoming a reality because, at the end of the day, the combined experience will help mitigate any risks while the business is being built.
I remember watching an entrepreneur pitch her coffee business to potential investors a few years ago. During her pitch she told the investors that she had worked in the tea industry for most of her career which demonstrated that she had the relative experience to enter the coffee industry, and her experience in the tea industry cut down the learning curve because she was able to capitalise on her experience of manufacturing, distribution and retail from one industry to another. Instead of making the coffee business the “hero” of her pitch, she elaborated on the team that she had picked to help her run her business: one team member was a tea buyer, another was a distribution expert, and the third would assist her in taking the coffee to the market. She discussed the probability of taking the product to market, while also mentioning any potential obstacles that would probably arise (based on her experience in the tea market), and explained how her team would navigate them. She did such a good job of selling her experience and her team that two of the investors invested in her business.
At the end of the day, your team is who will help you execute on your idea, based on their experience, and make it a reality. Investors would rather invest in a mediocre idea that has a robust team, than in a great idea that has a mediocre team.