The monthly Startup Founder Hot Seat event took place in Kelowna this past week with hopeful entrepreneurs vying to catch the attention of angel investors.
The event featured software executive and veteran investor Grant Lawerence, who is also the president of Valhalla Angels Kelowna. Lawerence has seen countless pitches and is an expert in guiding entrepreneurs. To tap into his knowledge and expertise, we sat down with Lawerence to find out what it takes to give an outstanding pitch to investors.
What are some of the best things to do when looking to beginning to formulate a pitch?
The first thing to do is reduce the amount of technical stuff. Reduce text, use big graphics, big letters and think about it as if you are going to pitch to your grandparent. You want big font. A font size of 30 means you have to reduce the amount of text on the screen. You don’t want there to be a lot of text because people will be trying to read it while you are speaking, they will not be paying attention to you anymore.
Don’t pitch a product, you’ll spend too much time on it. The maximum amount of time you should spend on your product is a maximum 45 seconds. At Hot Seat we had two guys pitch and they spend 2 minutes and a half minutes on their product. They didn’t get to the meat of here’s the market, here’s the problem, here’s how we are going to make money, etc, etc. Tell me about the problems you will solve. You don’t want to look at the solution, you want to look at what the problem is and how you fit to solve that problem.
Is this something you often see and hear from first timers?
Yes, very frequently. Especially if they have not had any experience in the sales world, and they can’t relate that they are trying to get somebody to do something. It’s like trying to get your kids to do something, it’s more let’s use the carrot instead of the stick. Human psychology 101, the what’s in it for me idea. If you can answer that question then you are stepping in the shoes of the investor or, in part, in the shoes of the customer.
How does someone get organized for a pitch for the first time?
We have a recommended pitch content book that we send to people who want to get in front of the Valhalla Angel group. It identifies all the things you want to do in your pitch and cut it down based on how much time you have to do your pitch. It’s not a template, it’s a guide as to what the content should be and how to get ready for it. There’s so many companies and volunteers out there who can help with this. Including UBCO, they have their Lean Launchpad for alumni grads, fourth year students, and professors. We have Accelerate Okanagan to help out with this as well. They can help you go validate your market and accelerate and grow.
We have basecamp for startups which allows founders to get inside the shoes of investors for two days, and figure out their capital plan, what does that raise mean, how to go and raise that capital and what is the impact as they raise multiple rounds. Round one maybe friends and family, round two, three, and four may be angel round, then you may get to qualify for banks or for venture capitalists and so on.
What stands out for you when someone pitches to you?
How did you come to this story? We want to know how you came about to solve this problem. We at Valhalla want to understand what is your skin in this. If you are coming to a pitch event and just saying that your idea looks like a cool way to make money, that is not as impactful as saying “I had this huge problem in my life, I had to solve it and this is how I did it.”
Or, this is something that affected five of my friends and this is what I came up with to help. We’re looking for the narrative of a personal story because we know that your journey forward is not going to as smooth as everyone shows on grass. You are going to have big ups and downs, some personal skin is going to be nice to have.
What exactly is an angel investor?
Angel investors started back in the 1800s when there was an attempt to support the arts and theatre, these supporters were called angels. That means an accredited individual in Canada and U.S. It’s a definition from the federal government that means that you have earned $200,000 a year for the past two years or you have a million dollars in equity outside of your home, and there are other definitions when a spouse is included. There are multiple ways to qualify as an angel investor. By definition, an angel has to be accredited in Canada so the government can say you have enough money that if you go and invest in something, it’s your own decision, and if you lose it, don’t come back to us crying that something went wrong.
Angel investors all come to this world for different reasons. For some it’s because they want to give back because someone else helped them along the way. Others want to live vicariously though the founders and help to contribute to technology and changes. And of course returns, some people are just looking for returns on their investments.
Lawerence adds that anyone who is going to pitch a business idea to should consider asking for more than just money. Ask for other stuff that you are missing. That might including asking for an introduction to someone or a business, mentorship, or advisors. Take advantage of the people in the room and don’t be afraid to ask for help.
To learn more about Valhalla Angels and become a member, visit their website.
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