Posted in on May 2, 2013
As a business attorney who works with entrepreneurs on business start-up and capital raising matters, I had a great time at the Governor's Business Plan Challenge today in downtown Richmond. Kudos to the McDonnell administration, Secretary of Commerce and Trade Jim Cheng, and Work It, Richmond for organizing this event showcasing some of the top entrepreneurial minds at Virginia's colleges and universities. Special congratulations to the UVA team--Tim Higgins, Andrew Andrae, and Jessica Ungerleider--who took the $10,000 top prize for a very impressive presentation pitching their startup ProVazo.
I have little doubt that several of the concepts pitched today will evolve into sustainable businesses in the coming years. A seasoned panel of experts offered insightful tips throughout the day, and here are some of the more memorable ones:
1. The three components that angel investors really look for in any potential investment are TEAM, TECHNOLOGY, and TRACTION.
2. Most startups can get farther than they think before needing to raise significant capital from outsiders, but at some point outside capital will be necessary to achive significant growth or economies of scale.
3. It is critically important to start selling your product or service and gaining some customer validation or market penetration before seeking outside capital...you will be in a much better position than if you just pitching an untested concept. Ideas alone mean very little. Execution is what counts.
4. Venture capitalists and angel investors invest in people, not business plans, so choose your business partners carefully. It is equally important to choose your outside investors carefully.
Overall, the teams did a solid job with their 5-minute business pitches. Based on some things I saw done very well (and not so well), here are a few tips for your next business pitch to a potential customer or investor:
1. Clarity is essential. Don't waste your first 60-90 seconds with fluff, complicated analogies, or other nonsense. Explain what your product or service is and what problem it solves in clear and convincing language right off the bat.
2. Showcase your key people, your assets (especially intellectual property), and your data (financial performance, projections, and relevant market data).
3. If you use power point, keep the slides clean and simple. Creativity and style count, but sloppy slides cluttered with small text are not going to help your cause.
4. Talk directly to your audience. Don't just parrot the text on your power point slides.
5. Never interrupt, argue, disagree, or say anything remotely disrespectful to your audience.
6. Speak clearly and demonstrate both superior knowledge of, and passion for, your business model and industry.