How the perfect pitch can seal the deal

The 10 minutes or so an entrepreneur has to sell an idea to an investor can often make or break the future of the start-up

For many entrepreneurs it’s all in the pitch. The reality is that most of the bright sparks with big dreams usually don’t have the money to realise their aspirations. Enter then angel investors and private equity firms. However, investment and funding comes with a price, and accessing it is often a much harder and lengthier process than entrepreneurs envisage.

The 10 minutes or so an entrepreneur has to pitch to an investor can often make or break the future of the start-up, according to Frank Walsh, a partner with venture capital firm Enterprise Equity.

He says a person’s capability and ability to sell their passion is often as important as the idea/product itself, and they need to do this well at the first pitch.

“We are in the seed game and we look at the people when we’re investing. We look for extraordinary people with a credible business plan.”

He says aspiring entrepreneurs should recognise that the route to funding is often a difficult and lengthy process.

“Investors don’t bring their cheque book to the first meeting. Entrepreneurs and start-ups need to understand there’s a courtship process.”

The human side of a pitch meeting can be as important as the idea and the supporting data, according to investor Bill Liao.

The venture partner with SOSventures says it’s about creating a personal connection with the investor.

To me, ideas are worthless. It’s all about the execution. Lone heroes with good ideas only succeed in the movies. You need a talented and diverse team.”

Someone who has been through the pitching process is Cleverbug chief executive officer Kealan Lennon.

Lennon raised $2.5 million to fund the development of the Cleverbug birthday card app, with $1.8 million coming from the Irish venture capitalists Delta Partners.

“You need to grab an investor’s attention within the first 10-15 seconds of a pitch. The first slide I showed in my pitch for funding for Cleverbug said: ‘It’s a $27 billion market’. If anyone was falling asleep that certainly woke them up.”

Lennon says the biggest mistake an aspiring entrepreneur can make is not listening to and acting upon feedback.

“I have mentored companies doing fundraising. I told them they weren’t ready to pitch – they hadn’t done their research properly. They didn’t listen and went ahead with meetings. The investors told them exactly what I had.”

He says a good track record with previous businesses helped him gain investment for Cleverbug. Lennon led a management buy-out of a business that designed leaflets and cartons for the pharmaceutical industry at the age of 25. Five years later he sold it to a US packaging company for $20 million.

“A big track record made it easier for me to open doors. Leaving that aside, making a cold approach in investors should be frowned upon. It’s not the way to do it.

“At the end of the day, investors are backing the person. Thus, they want to see someone with hunger and passion. Early stage investors also like to get recommendations from other people regarding a start-up.”