Strengths and Pitfalls of Investor Pitches at TechWeek NYC
One of the most talked about facets of entrepreneurship is the investment stage, and took center stage at Tech Week New York. As a serial entrepreneur and seed investor, Ajay Rajani spoke at length on pitching to investors. Currently a founder of Nextt, his accelerator helps people turn ideas into experiments in collaboration with leading social platforms. He also invests in seed-stage startups around the globe via the Inevitable Collective., and formerly was Head of Product at Grovo and CMO at Tala.
Strengths of a Good Pitch
- Problem Identification: Investors look for a first scrappy take on a problem. It does not have to be a well defined solution, but more an understanding of the business problem at hand, and a directional roadmap of what you might very simply do to solve it.
- A Clever Solution: People like to see that you have a solution to the problem, of course, but it has to be clever, unique, or compelling. Some wit, whimsy or very simply, a clean and clear take is helpful.
- Crowd-sourced Evidence: Some proof of there being a visible need for your product or solution is always helpful. An understanding of your user profile and the target demographics is the first key step, before identifying if your outlined problem is truly a problem to them, and requires a solution.
- Fast Feedback Loop: Hand-in-hand with crowdsourcing is the need for people to tune into the idea, experiment with it, provide feedback, and continue using its iterations for a while. This can be challenging for a generalized market, which is why it is important to quickly capture the first movers in your vertical.
- Outcome Orientation: One step ahead of a solution is the impact that it will have. Investors enjoy a sense of foresight, which enables them to see how the solution will change the market, industry or world. Quantifying this is not critical, but could be useful.
- Underplaying Monetization and the MVP: Surprisingly, and contrary to perceptions, an insider tip was that if investors look for monetization at the onset, they are unlikely to invest anyway. It is best to have a plan, but not making it the focus of your pitch. Similarly, the MVP should be designed in a way that will generate the feedback that you need from well-targeted users. Similarly, a legal backing is not critical at the onset, and while a nice-to-have, should not be done overlooking things like product features, feedback from target users, etc.
- A Passionate and Confident Entrepreneur: Any investor will only invest in someone who they feel can multiply their investment into a solid, sturdy product or company. This comes from confidence and conviction, and by avoiding a plethora of pitfalls.
Pitfalls to Avoid
- The Bailout Syndrome: no investor wants to hear a story of you hating your job and invest in you to bail you out of it. Similarly, they do not want to see too much sunk cost in an unfeasible idea, but are more motivated by seeing a passionate individual who is inspired by a problem and done something about it, versus wasted their time on too many details.
- Advisory Overkill: While it is sound to have a team of reliable advisors, overselling their talent can irk an investor, who knows that the free advisors are likely to not invest in your idea or product. Instead, it is recommended to get a solid cofounder who is an evangelist and a visionary, with a knack for doing things, and quickly.
- Lack of Real Feedback: Once again, having real feedback from users, target markets and first movers, both within and outside of your direct market, is key; the lack thereof puts things into a more strategy and conceptual realm.