We at Bowery Capital see thousands of investments focused entirely on the world of business software every year. I meet with founders who have the ideas and ability to help every type of enterprise – from fashion and retail to restaurants and everything in between. What I’ve learned is that there are a lot of ideas out there, and plenty of talented people who execute them, but ideas and execution are merely bookends to one of the most crucial parts of the entrepreneurial process: The pitch.
Want to become the next Gail Goodman, Ginny Rommety or Kass Lazerow? Here are the top four things to think about when talking to potential investors:
1. Practice, Practice, Practice.
It might sound obvious and trite, but it is crazy how many entrepreneurs do not allow themselves ample time to practice their pitches. Practicing your pitch shouldn’t be hard to do either; it should be something you organically integrate into daily conversation. Practice with family during Thanksgiving dinner, or friends over beers. And make the most of your network and the people who will give you constructive feedback. The questions you will get, the areas of confusion and excitement, and the overall selling of your idea in a comfortable setting will set you up to ace a pitch to an investor.
2. Understand why you’re selling what you sell.
Most people don’t understand the true ‘buyer need.’ Why does a CMO or CEO care about your product? How does the product have a serious impact on their day to day? Why should they care? It’s amazing when people haven’t really thought through the pain point they’re solving; but when they do, the potential investor can tell – and not just because they’re making diligence calls to your potential clients.
Ideas and execution are merely bookends to one of the most crucial part of the entrepreneurial process: The pitch.
3. Build a great advisory team around you.
When you’re first starting out, you likely have no money, and you certainly don’t want to throw your few pennies into 6-figure salaries. But, what you can do is easily build a team of advisors that help and support you. We care a lot about having executives that have “been there before” supporting your business early on. They can help you solve problems big and small, and generally like giving advice. Signing up some advisors in exchange for equity is easy and a powerful statement.
4. Find your market and size it.
I tune out of a pitch when someone tells me the market opportunity is at a high level, billions of dollars. Sure it is probably right at a high level, but that really isn’t the total available market to you. People tend to incorrectly assume large market opportunities; but if you look at the true size, you’ll come away with a more salient and granular pitch. I recommend the Peter Thiel route: Look at a niche market and monopolize that. You may not have a product that every CTO needs, but you could be offering something that every asset-heavy enterprise CTO needs to streamline management, for instance.
Look at a niche market and monopolize that opportunity.
I’m always impressed by our portfolio founders who, even in their early stages, are able to articulate their concepts in a way that I can understand and position to potential clients for them. For instance, one of our companies Trackmaven is growing as quickly as it is in part to the executive’s strong, consistent focus: Help simplify competitive intelligence for digital marketers. They are quickly scooping up clients like AOL, Martha Stewart Living, and the NBA, as well as funding when they need it, not only because of their ability to see a need and fulfill it with an incredible product, but also because they can articulate how they fulfill that need.
As investors, we’re here to help, and look forward to seeing the next big pitch.