Wednesday, September 25, 2013

The Problem with Enterpreneurs' Pitches

Steve Blank, lean startup guru, has made a strong argument for what's wrong with how investors often judge entrepreneurs.   In many startup accelerators, "demo day" is when the entrepreneurs get to pitch their concepts to prospective investors.  However, Blank argues that, these demo days often turn into "beauty contests in bikinis for investors."  He stresses that the tendency exists for investors to focus on the quality of the presentation, rather than the content/substance of the business concept.  I think he's right.  Being able to craft an "elevator pitch" is a very useful skill, but in the end, we can end up focusing too much attention on how articulate the person is.  We need to remember that substance should trump style.

1 comment:

William McKibbin said...

Private equity, especially at the startup level, are focused like a laser on three latent questions that precede the investor into the conversation:

a) "What are you selling...?"

b) "What will it cost me...?"

c) "Why should I be interested...?"

I raised capital for many years in private equity during my career -- the presenter is forewarned to keep these questions front of mind.