Joining a Pitch Fest for Business Financing
You’ve heard of poetry slams, surely, where poets get onstage and belt out their creations in competitions that sometimes feel part standup comedy, part performance art. Well, slams aren’t just for poets anymore -- entrepreneurs compete in pitch slams, where they try to wow the judges with the best pitches.
For Ash Kumra, winning a pitch slam yielded much more than the $30,000 in cash and professional services he received. “Contests offer instant validation,” Kumra says. “That tells an investor or a sponsor that this business isn’t going to disappear.”
In 2010, Kumra won the Irvine Entrepreneur Forum, a pitch contest held by the chamber of commerce in Irvine, California. The win helped him launch DesiYou, a digital video distributor of Indian entertainment. Since then, he’s cofounded DreamItAlive.com, an online personal growth community with more than 50,000 members and sponsors such as Microsoft and HR provider TriNet.
Pitch slams aren’t just about cash and credibility, says Kumra, who now chairs the Southern California nonprofit Tech Coast Venture Network, which runs an annual $25,000 pitch contest. Win or lose, entering a contest is a clever way to meet investors and industry bigwigs with whom you couldn’t otherwise rub elbows.
How does it work? To ensure that your pitch soars, you’ll need to research the judges ahead of time, practice incessantly and incorporate feedback from colleagues. But there are some other tips, too. Entrepreneurs who’ve won or run pitch slams offer the following suggestions.
Hook them early
“You really need to be able to convey what you do in the first 30 to 60 seconds,” says Sanjay Parekh, a serial technology entrepreneur and founder of Startup Riot, a twice-yearly competition in Atlanta that gives contestants three minutes to pitch and compete for startup cash and initial investor meetings.
Get your founding story out of the way quickly
Then share impressive sales figures, household-name customers and industry leaders you’ve secured as angels or advisors, Kumra suggests. Also, he adds, mention how your business will use the winnings -- whether it’s to rent an office, increase inventory or hire an engineer.
Keep it simple
Focus your pitch on two things: identifying the problem your company solves, and how you solve it, says Los Angeles entrepreneur Vanessa Ting, who won $1,000 in a competition sponsored by Sam’s Club in 2013. Make sure to quantify your market for judges who may not be familiar with your industry, she adds -- for example, by saying, “160 million people in the U.S. use smartphones.” Ditch the flashy props and snoozy slides, Kumra says, but by all means, demo your product.
Explain why you and your product are qualified to fulfill this market need. “Is it proprietary technology? Your unique background?” asks Ting, founder of Buyerly, a website that connects product manufacturers with retail buyers. Her secret sauce? Her MBA and her experience as a buyer for Target. To hammer home the point, she offered judges an anecdote about a client who was having trouble breaking into Walmart and Target but succeeded after using her services.
Turn up the charm
Although judges love to see confidence, they bristle at arrogance. Contestants who become combative when challenged by the judging panel give the impression that they aren’t “going to listen to my advice anyway,” Parekh says.
Kunal Sarda, who last year was offered a $250,000 investment on TV’s Shark Tank, agrees. “It’s all about the team,” says the New York-based cofounder of VerbalizeIt, an on-demand translation platform for travelers and businesses. If the judges flat out don’t like you and your partners, your pitch is sunk.
Three questions to focus on during a pitch slam
When participating in a pitch competition, most entrepreneurs make the mistake of solely focusing on their pitch and neglecting to prepare for the Q&A. Determining the answers to the following questions will not only help you present your company in the best way possible, but it will also help you understand where your company is today and what you need to do to improve for the future. Prepare and practice for these questions, and you’ll blow your competition away.
1. Who’s on your team?
Start off by talking about your team’s experience in your market, what key skills each member brings and why your team is the right one for the job. If you’re a software company, pay special attention to your developers, as a lot of investors want to know you have the abilities to build your product in house.
Most contestants will talk about how they have a “rock star” team, then list some impressive accomplishments (Ivy League graduates, proven track record, worked at Google and so on). To stand out, list the additional team members you’re going to need in year two and three of your venture. It makes you seem honest and mature to admit that when your startup grows to a certain point, you’ve already thought of your next three to four hires.
2. What’s your traction do date?
Start with revenue if you have it -- paying clients will always be a gold mine for this question. If you’re pre-revenue, beta customers are the next best thing, and if you’re earlier than that, bring in how many signups you’ve had on your landing page. The key to answering this question is to mitigate as much risk as possible by convincing the judges you’re building something that someone wants, and you need their funding to help serve your customers, who are dying for your product or service.
Apart from the money or interest you’re getting from your customers, this is a perfect question to tie in what you’ve been learning from them as well. Since a key point of the traction question is about reducing risk, talk about what traction you’ve made learning about what your customers want. When you can say that initially you thought X but through talking with users and tracking feedback you actually learned your users want Y and Z, you demonstrate that you’ve been making strides in refining your business.
3. What’s your revenue model?
Have hard numbers here. While it may seem obvious, many teams say they’re going to have annual fees, transaction fees or premium features, but they haven’t decided on the pricing yet. Also, depending on your company, be extremely careful about just listing data or advertisements as your primary revenue source. Many entrepreneurs don’t understand when their data becomes valuable enough to sell, and they don’t realize how many users their software needs to be self-sustaining with just ads. Be sure you know this information inside and out.