Investor Talk: What makes or breaks a pitch

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Pitching to investors is one of the most important – and nerve-wracking – experiences for startup founders. To help you prepare the perfect pitch, Disrupt Africa spoke to some of our investor friends across Africa, and asked them for advice on what makes or breaks a pitch.

Brett Commaille, co-founder and lead partner at AngelHub Ventures:

“What makes it:

– A sense of reality: a believable team that speaks with enough experience to give you the comfort that they have the capability to execute on most of what they are saying;

– Crisp clear message: no information overload. I need to get what this is all about right upfront;

– A clear, well defined market opportunity with a proper plan to get it;

– A lean approach that test and validates assumptions as they go, meaning you don’t lose everything on small mistakes;

– Ideally some evidence of market traction;

– A clear idea of what the business needs to achieve its ambitions and a deal that leaves upside for all parties.

Any of those done poorly affects things, but what specifically breaks it:

– Inability to explain what you actually do and how it works as a business – 20 slides in, 30 minutes gone and we’re still getting background stories;

– Crazy claims and  generalisations;

– A poor understanding of who else is out there and how you are different.  Thinking you’re special because you didn’t look to see if you are;

– Not knowing what you want and what you will do with it;

– Crazy valuations, overly complex and suspect structures.”

Justin Stanford, co-founder and managing director of 4Di Capital:

“Generally I find that what makes a pitch frustrating is too much waffle, explaining and background. Focus rapidly and succinctly on what the business does practically and clearly, and who the team are, so that you can get into the questions.”

Oliver Drews, chief executive officer of Clifftop Colony Capital Partners:

“The most common mistake I see during investor pitches is that the team has not crafted the proposition to the specific audience it is pitching to. Obviously the basic proposition put forward has to be consistent but every investor audience is different, looking for different angles on how the potential investment can fit into their mandate, or their organisation. A pitch to a VC firm is a very different pitch than to a potential strategic party. The key is having the empathy to understand the audience. This is also why pitching to heterogeneous audiences is much less effective than delivering a nuanced pitch to a small homogeneous group of people.”

Sean Obedih, founder of NewGenAngels:

“What makes a pitch:

– Making clear the expertise of your team members and your ability to hustle as things change;

– The size of the market you are going after, and detailing what your expansion and exit opportunities are;

– Making clear what your “unfair advantage” is. All exceptional founders have something special. A real unfair advantage is one that cannot easily be copied or bought. It could be anything from deep knowledge to industry connections.

What breaks a pitch:

– If your idea is not patentable or protectable, you could be in trouble;

– What is the burn rate required to get to a winning product? Is it too high?”

Bunmi Akinyemiju, chief executive officer of Venture Garden Group:

“Some thoughts:

– Over-information: You have very limited time to get to the point; the more the noise, the farther you get from it;

– The bottom line: Very often, entrepreneurs fail to explicitly communicate the bottom line (or the big picture), and become too engrossed in the journey, solution, product or technology. I like to see the maximum and realistic potential upside in hard numbers quickly, either as financial or impact, before getting into the product. This helps to quickly align our goals;

– Risk-masking: A lot of trust is gained when entrepreneurs demonstrate a good understanding of the risks and challenges inherent in their business plans. If an investor can paint a likely scenario that is unknown to (or concealed by) the entrepreneur, and could significantly damage the business model, the entire pitch will be corrupted.”

 

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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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