The pitch: a process every MBA will be familiar with, whether on school assignments, trying to get investors to back your start-up idea or honing the skill with classmates during your lunch break.
It’s a tough culling process and can often make-or-break your start-up dreams. The reality is that investors get dozens of drub ideas and, even more likely, you have a great idea but your pitch fails to energize the judging panel.
Entrepreneurship is set to be a key career path for MBAs throughout 2014; recent reports have suggested that as many as 31 per cent of applicants want to start their own companies after graduating.
As AGSM MBA grad and entrepreneur Ramanan Krishnamoorthy puts it: “I eventually got sick of making money for somebody else. I thought, why not do something I’m passionate about?” His attitude is shared by many in the b-school community.
And there are many reasons why it’s a good idea to try and get crowd-funding and investor backing (not least because of the thousands you’ve just spent on an MBA degree): credibility, instant feedback and motivation – as well as the chance securing cash.
But where 90 per cent of some MBAs fail, says Jules Pier, founder and CEO of the product launch platform The Grommet, is taking ten minutes to get to “the point”. She goes to Harvard Business School twice a month to listen to eight different startup pitches from students and has to make snap decisions to invest.
However, some of these pitches are, well, disappointing. “The ones who come in raw and unpolished are at a disadvantage, even if they have a world-class idea,” says Jules in a blog post. “There is no substitute for being face-to-face to hone your story until it’s the shortest possible length with maximum clarity. Your goal is to invite the next level of questions by being clear, inspirational, and credible.”
She launched her start-up platform during the economic crisis of 2008 - when little funding could be found elsewhere. Since then, the company has been helping entrepreneurs and MBAs achieve start-up success for six years.
Jules says the pitch can be intimidating, but you’ll never have a better chance to get feedback from so many experienced entrepreneurs. “You would normally have to fly around the country and attend a dozen meetings to have access to the professionals who will be assembled in front of you, listening to you and holding your prototype in their hands,” she said.
You also shouldn’t pitch to friends and assume it will be a reliable test-run. “Pitching to people who are already in your corner is not real life. They already know your product story and they care too much about you,” she says. “A real pitch in front of judges simulates that rough and tumble reality.”
She says it is important to cut through the unnecessary detail to sell your product or service in just a few minutes. “It’s an exercise in discipline that will pay dividends. And most importantly, you’ll learn how to make that magic connection with a skeptical, judgmental audience – a stand-in for the consumer,” she said.
What’s more, by attending investor and crowd-funding events, you’ll gain credibility with investors whether you get backing or not. “To potential investors, your presence at top-level events signals that you’ve stood out from the pack and created something that’s worth taking a closer look at,” said Jules.
But it’s not all plain sailing. Even getting to the stage where you’re ready to pitch can be immensely difficult, says London Business School MBA Corrado Accardi. He secured a record £400K in crowd-funding for his pizza business – eventually. “I tried to look for investors for the initial business plan in 2010, but I lacked credibility because I came from the construction sector and I had to shelve the idea,” he says.
AGSM graduate Ram, who runs a consumer goods start-up in Australia, agrees. “I have faced many, many challenges. There were so many instances when the rational decision was to shut down and go home. But if it was meant to be easy, everyone would be doing it,” he says.
It can be daunting if you’re idea is rejected, but continuing to pitch to investors will energize you all over again, says Jules. “When you quit your job to work on your amazing idea, you were filled with excitement; 18 months later, you may well find your enthusiasm flagging,” she said.
“Putting yourself in front of an audience and a panel of judges will help you remember why you took the big risk in the first place.”
When Grenoble GSB MBA Oliver John Rivera had to pitch his insect-food idea to an incubator, he had to make a bit of an impression to stand-out. “I handed them a plate of insect sushi. It was a bit of a show and I made quite an impression. Sometimes a serious business presentation is not best way to go,” he says.
For Harvard MBAs to secure funding with The Grommet, it is all about condensing information. “Think of delivering the ‘preschool board book’ version of your story, with just big pictures, models, and words that provoke understanding and interest,” Jules added.
“If you engage people by being clear, simple, and you can inspire confidence in your ability to seize a big market, a lively dialogue with the panel is sure to follow.”
Other start-up funding platforms say that the people in your business team are more important than the pitch. Alexandre Sagakian, an ESSEC Business School MBA and serial entrepreneur who is a Director at Techstars, one of the best-known accelerators in the world, says it’s all about the team.
“Focusing on your team is the best thing you can do. Make sure you all complement each other and that your interests are aligned,” he told BusinessBecause. “I believe you should find the team before the product, and that may be counter-intuitive, but even if your idea doesn’t work, you can tweak it.”
Techstars provides seed funding from over 75 top venture capital firms and angel investors, and Alex hears pitches from London-based entrepreneurs on a regular basis.
He says that finding funding isn’t a problem if you’ve got a great product. But finding the right partners is equally as important. “You can alter the business model, but what you cannot do is alter the team,” he adds.
“You have to make investors have confidence in the team, and confidence that you will make the right business decisions.”