Pitching Like Crazy (or why you should avoid pitch competitions)
Posted 3 years ago
It seems like every founders’ event has one: a pitch competition. We advise over 200 startup founders each year and continue to see many waste their time at what seems to have become merely a must-have craze.
Founders apply for such events for a number of reasons but ultimately, in the back of their mind, many think they are going to walk off stage with investors falling over themselves to fund their venture. While the Shark Tank program makes for good TV, founders can easily forget that it’s like any reality TV show – it’s designed to keep us glued to the screen so media companies can sell advertising. This is the same with a number of pitch events. While they do provide nerve-wracking practice for pitching in private with targeted investors, even non-televised pitch events may be touted to be helping the founder while really there are other reasons they are being held.
The key thing is that a pitch is the start of the conversation and it won’t result in a cheque as you step off the stage. This is why founders need to think carefully before entering a pitch competition.
Here are three key questions we suggest our clients consider to work out if a pitch competition is worthwhile or not:
- Who is organising the event and what are they trying to get out of it?
The plethora of incubators and accelerators popping up results in a lot of competition for relevance. If the event is advertising the capacity or reach of the organiser rather than the ability to link founders and investors in a meaningful way, then be wary. Also, as soon as they mention a ‘Shark Tank’ style of event we recommend not participating, as inevitably the event is run to meet the needs of the event organisers rather than the founders that are presenting (or the judges who are in a position to invest).
- Who is on the panel?
Pitch events generally have two types of judges: a panel of investors or a panel of experts. When it’s a panel of investors, do you know who they are and their investment philosophy? Do they usually invest in your kind of technology? What is the stage of their fund and do you consider them to be a serious investment target?
For a panel of experts, again, who are they and what is their area of expertise? Will pitching in front of them provide you with contacts that could help you raise capital or engage with early customers? If the panel is not going to add value to your venture, then why pitch?
- Do you get to meet the investors or experts and have one-on-one discussions?
This is really important and is a flow on from question #2. If you only get a chance to pitch but not have follow on discussions with the panel, then possibly you’re really only attending for the refreshments. Sadly, some corporate pitch sessions have missed the mark when it comes to this approach. When you can’t find out who’s on the panel or the investment criteria, you’re paying for your own airfares, you only have 10 minutes to pitch and then you walk out the door… you have to really weigh up if it’s worth it.
Now don’t get me wrong, having a good pitch and getting in the practice are both important; but be careful about spending your time (and money) attending events that don’t align with your commercialisation strategy. Your time might be better spent having one-on-one sessions with potential investors to discuss your venture’s strategy rather than attending a ‘game-show’ style event which promises a dream but leaves you drained. That’s just crazy.
– Brian Ruddle, managing director
Brian is the managing director of Impact Innovation Group and has been the CEO of more than 10 startups, raising seed rounds from angel investors, high net worth investors and venture capital firms. He works across Australia and internationally advising SMEs, multinationals, government agencies, universities and startup companies.