developing a pitch for investors with ruben van werven
TRANSCRIPT
MY QUESTION
How do entrepreneurs convince investors to fund their startup?
MY APPROACH
Spending 3 months in an incubator in Amsterdam
PITCHING
‘Pitching is all about explaining this massive idea, the big potential, new opportunities that might
arise, other markets that you might expand to…’
PITCHING
‘…if you think about it, nonsense right, to even talk about that. I mean, why? That’s the way you have to frame it to convince other people. It’s interesting
to invest in’
PITCH ACADEMY
Preparing the entrepreneurs for Demo Day
TENSIONS
• Describing the product without getting lost in technicalities
• Reducing uncertainty without having much evidence to show and without exaggerating
• Positioning the company without the use of clichés
TENSION 1:DESCRIBING THE PRODUCT…
Investors want to understand how the product works
TENSION 1:…WITHOUT GETTING LOST IN TECHNICALITIES
‘Best in industry templates – consisting of processes, kpi definitions and connectors –
provide our cloud-based in-memory extension with the data it needs to calculate and provide you with
the relevant information for business’
TENSION 1:…WITHOUT GETTING LOST IN TECHNICALITIES
‘Because they can make the dog jump, they somehow think that somebody wants a jumping
dog’-Randy Komisar, entrepreneur and investor
SOLUTION:FOCUS ON CUSTOMER BENEFITS
‘Big companies need business processes to connect everything together to ensure constant quality. And while these processes have helped them to become successful, they create also a
large problem’
SOLUTION:FOCUS ON CUSTOMER BENEFITS
‘…everything a manager needs to control business performance. Let’s take a look behind the scenes. The core of our product is a powerful, cloud-based analytics engine. (…) It sounds complicated, but
we developed a way…’
TENSION 2:REDUCING UNCERTAINTY…
Startups are uncertain investment opportunities, which leads to a liability of newness
TENSION 2:…WITHOUT HAVING EVIDENCE TO SHOW…
TENSION 3:…AND WITHOUT EXAGGERATING
TENSION 3:…AND WITHOUT EXAGGERATING
• Disruptive• Innovative• Revolutionary• Breakthrough
SOLUTION:GATHER ANY EVIDENCE YOU CAN FIND
Entrepreneur: ‘Shall I mention the 3,000 [people on our waiting list]?’
Incubator manager: ‘I would do it, anything you have in endorsements at this stage helps’.
Entrepreneur: ‘Yeah, it’s the only traction we have…’
SOLUTION:USE CIRCUMSTANTIAL EVIDENCE
‘According to the Global Industry Analyst, the global e-learning market will reach 107 billion
dollars by the end of next year’
‘[In Brazil], there are more than 300,000 private clinics spread across the country, with 4.5 million
health professionals working at this places’
SOLUTION:COMPARE YOUR STARTUP TO OTHER FIRMS
‘Our main competitors are legacy desktop systems that have been around since the nineties’
TENSION 3:POSITIONING THE COMPANY…
Companies perceived as legitimately distinct are evaluated more positively
TENSION 3:…WITHOUT USING CHEESY ANALOGIES
• Food delivery • Flowers• Laundry• Grocery delivery• Alcohol
• Medical marijuana• Hot men who follow your orders
• Lawn care• Mortgage lending
The Uber of:
SOLUTION:FIND A CLOSE TARGET FOR THE COMPARISON
‘Two companies that address a similar market as we are (…) already do over a billion euros in
revenue’
SOLUTION:…AND ADD A ‘SECRET SAUCE’
‘On our first fifty orders, we’ve proven to be seven times faster than [our main competitor], where
delivery takes two weeks’
ANY QUESTIONS OR COMMENTS?