How to present your startup on the pitch
The war stopped and broke many business processes. But ideas are not so easy to break. Especially if they come from Ukraine. So the need for pitches has not disappeared. Even more: it has grown. Because foundations, institutions and organizations from all over the world strive to support Ukrainian startups. For example, Google has created a grant program for entrepreneurs from Ukraine. Up to $ 100,000 has been pledged for the development and implementation of Ukrainian startups for 50 projects.
To apply, you must complete an application and submit your idea to the Google team. Entrepreneurs are supported by both European partners (EU4Business, together with the government, allocates 4,000 euros to businesses), and Ukrainian NGOs. And one of the requirements: a good application and a project pitch.
Pitch, ie a short structured presentation of the project to potential investors – one of the key factors in obtaining funding. In just a few minutes of the pitch, it is decided whether the novice entrepreneur will be able to convince the interlocutor / organization to invest in his startup. What mistakes during the pitch scare investors the most, what to talk about, and what is better to keep quiet about and in general how to find financing in a war, further in the material.
How often failures occur
Failures allow you to learn and this is a very interesting basis for analysis. To begin with, I advise young entrepreneurs to review the patches already held. To understand how to do them and analyze the mistakes of people who were denied investment.
In Ukraine, there is an interesting and unique state project “Ukrainian Startup Fund”, which distributes funds at the pre-seed and seed stages. That is, when it comes to relatively small amounts ($ 25 thousand and $ 50, respectively) for the validation and creation of a minimum marketable product. The organizers have already spent more than 30 pitch days and posted videos with them. So this is a great opportunity to learn from other people’s mistakes and success stories.
What are the most common pitches
One of the common mistakes I often see when evaluating pitches in the Ukrainian Startup Fund or during other hackathons is the lack of a team. Singles who do not enhance their future product with the knowledge and experience of others – a wake-up call for a potential investor. When money comes from a solo founder, it is a signal that the author of a brilliant idea could not “sell” it even to a potential partner. That’s why a slide with a team that believes in the product is one of the key ones.
Two people are enough to pitch at an early stage – a hacker (potential technical director, can work with his hands) and a hustler (executive director, responsible for sales and builds the business component). Sometimes startups have time to attract 3-5 people, which can be both an advantage and a disadvantage. Because keeping a big team threatens to burn-rate, when investments are quickly “burned” on salaries and additional costs.
The ideal situation is if the participants are motivated by options, ie a share in the company. Investors especially like experienced teams that have already created and successfully sold their business. Because they have a financial cushion and have managed to “fill the buzz” in business.
Inability to sell
Startups are often hampered by the inability to sell. Pitch is a conversation about your product, about competitors, advantages, disadvantages and solutions. The investor wants to see how you sell. Therefore, even when it seems that you are not selling anything, you are selling. As an illustration, you can give a presentation of a manufacturer of premium electrical equipment on one of the last pitch days. The cool engineer, the founder of an interesting startup, could not sell his product.
When asked by the jury about the advantages, instead of comparing the pros and cons of their product with competitors, the contestant answered in the style of “you will still come to me.” So investors have only to guess how unique the development is. And although the product really had a competitive advantage, the tone of the entrepreneur’s conversation did not help to get money.
At the same time, the pet insurance startup, which previously won pre-seed and now came to the market for money and further scaling, demonstrated a different approach. The founder impregnated the product perfectly, placed the accents correctly and demonstrated what was done with the funds she raised – created an application that entered the US market, validated and began to attract the first customers. And although the product was not difficult, it received the highest rating of the jury on the pitch day.
An equally common mistake of founders is to try to squeeze as much information about technology into the presentation. As a result, the investor receives a boring report with dozens of lines of letters in small print. To attract attention, the pitch should be bright. Therefore, it is better to make one big picture that everyone will remember.
A creative approach on one of the last pitch days was demonstrated by the manufacturer of electromechanical tables that change height and allow you to work sitting or standing. In order not to burden the jury with the technical characteristics of the development, the participant sat down on the table and began to lift himself during the presentation. The spectacular performance clearly demonstrated to investors the capabilities and quality of the innovative product.
Another common mistake made by start-ups is to come up with ready-made solutions instead of solving them. Imagine you are selling a device that cuts potatoes into squares. An investor who is interested in cutting rings is unlikely to pay attention to your product. However, by emphasizing that your development cuts potatoes 20% faster than the best chef in the world, you are more likely to “hook” the investor. Especially if you have an experienced restaurateur, whose profit depends on the speed of cooking.
A win-win situation is to start the pitch with a topical issue. If it is familiar to the investor, he will listen more carefully. And even if your decision differs from the expectations of the interlocutor, he will still be interested to listen to a person who deals with issues close to him.
One of the Ukrainian teams failed several pitches, talking about the unique web portal they created without mentioning what problems it solves. The founder’s inability to articulate in one sentence what problem his product solves usually means that either the problem does not exist or it is not validated. That is, the startup did not talk about the problem with potential customers, did not check its relevance and available solutions.
At the beginning of the zeros, the founders of the then little-known company Google discovered a global problem – the lack of a single source of information. To solve it, they set out to index everything in the world, and even managed to attract money from two competing Silicon Valley investors who had to become partners.
Today, Google is the most visited site in the world, without which we can no longer imagine our lives. And his diverse, at first glance, projects daily embody the global mission of organizing information in various areas of our lives – from Internet search, to cartographic services (Google maps), scientific publications (Google Scholar) and book search (Google Books).
The bright online success story was demonstrated by the Ukrainian online service Grammarly, which focused on the problem of text quality. The product not only improved grammar, spelling and stylistics, but also made texts more understandable and interesting. Today, the company has become a “unicorn”, its services are used by most foreign editors. And after Grammarly attracted another $ 200 million in investment, its total capitalization exceeded $ 13 billion. According to Time magazine, the service was among the top 100 companies changing the world. And the war did not hinder its development.
How to prepare for the pitch
How to prepare for the pitch
Pitch is the culmination of fundraising, when you are known and specifically invited to make a decision based on the presentation of your product – to give money or not. However, you need to start looking for an investment much earlier.
To begin, create a base of potential market players who may be interested in your product. It is very important that these are specialized businessmen who can give smart money. That is, not only money, but also expertise in the field of your product. After that, you should get acquainted with investors and interest them in your product. As a rule, you are unlikely to be invited for a further conversation at once.
But you should still keep in touch with potential investors and update your product. This will allow you to build valuable relationships, and when you really need money, you will no longer be a project “from the street”, but will have a history of interaction with market players. They will know who you are, what you do and why. And at the moment when you are finally invited to the pitch – you will be able to better present your product.
Search for investors
You can find investors through the LinkedIn social network, investor search services and crowdfunding platforms. In particular, Startup Network, BePartner, Product Hunt, Angel Investment Network are platforms where a startup can present its project and find its investor. Registration on these services is free. There are also crowdfunding platforms that help find funding among Internet users. Registration on the sites Crowd Supply, Kickstarter, IndieGoGo is free, but there is a fee for the funds raised. Thanks to these services, it is possible to collect from the “world on a thread” and thus close the collection to turn a business idea into reality.
The global pandemic has erased borders and opened up additional opportunities for startups. Previously, the 30-mile rule was that investors rarely invested more than their office, not wanting to travel far. However, with the advent of COVID-19, the whole world closed at home. And investors began to communicate and conduct pitches in the zoom, and invest outside the 30-mile zone. With the start of the war in Ukraine, not all startups can go abroad to present their project. However, this did not become an obstacle for them – they patch online.
Traditionally, the most reliable investors are considered to be Western companies. Fortunately, it was possible to obtain an “EU residence permit” thanks to e-Residency, an Estonian government program. Previously, registration for a new client cost about 130 euros in administrative fees. Due to the full-scale war in Ukraine, the leadership of the Estonian government program decided to compensate Ukrainian entrepreneurs for the money spent on registration. In this way, the program supports Ukrainian business. E-Residency allows start-ups to register their own business online, open accounts remotely and keep all accounts. And most importantly – to bake, as the owner of a European company.
Also, keep in mind that the pitch lasts only 3-5 minutes, and in the case of the elevator format – no more than 60 seconds. To meet the allotted time, you need to train. Write the text of the presentation and tell it to yourself by recording the speech on video. Then review the pitch to see which of the highlights you revealed less or more than you wanted.
With each repetition, your speeches will become more successful and concise. When training alone, it is advisable to patch in front of friends and get feedback on what they understand or do not understand. It’s best to finalize your training by patching up a few market experts to see what needs to change or add to enhance your presentation. And only after that really go for a pitch in front of the investor.
Prospects for Ukrainian startups in wartime
99% of Ukrainian startups need funding, and 28% have ceased to exist, according to a survey by the Ukrainian Startup Fund. At the same time, some entrepreneurs have reformatted their project to the requirements of today and are trying to “survive” despite the war.
Even in such a difficult time, startups are struggling and succeeding. In March, 6 teams from Ukraine presented their projects at the South by Southwest International Business Event (SXSW) in Texas.
In addition, the Ukrainian grant fund 7Wings has invested $ 300,000 in Ukrainian startups. 6 startups have already received 50 thousand dollars for the development of their project.
Applications for participation in the Polish-Ukrainian Startup Bridge program in support of Ukrainian startups are also currently being accepted. The project will select 15 teams that will be trained in Poland and receive up to 10 thousand zlotys.
There are always opportunities for development. So, having a unique idea, it is worth implementing it despite the war. After all, the development of your business is now not only your great victory, but also a common victory for the whole country.