Pitching is not about being a Smartenheimer on a stage. It is a common way for start-ups to build relationships, and it can also take place over a cup of coffee with a possible partner, says investor and visiting lecturer in entrepreneurship at CBS, Nicolaj Højer Nielsen.
As an investor, Nicolaj Højer Nielsen has heard hundreds of pitches. Each time, he considers three things: Is the problem big enough? Is the solution different enough? And are these the right people?
Not just about finding investors
Pitches are not just about finding investors. As an entrepreneur, all your resources are external, so you generally have to sell yourself much more than in a traditional job. For example, you need to work with a PR firm and assemble a capable development team, and you need to get everyone around you to understand that your product is great, explains Nielsen.
“If you have the best product in the world but you can’t tell a good story, the chances of getting any further are zero. Pitching is a way of building relationships. It shows your ability to sell your vision.”
He is a very active investor in completely new start-ups, and is co-founder of the Copenhagen United fund, which invests in start-ups with a certain level of knowledge and expertise. In other words, it is not a juice bar they are after.
His first investment was a start-up originating from an academic project. It set out to develop skiing goggles with a computer screen and navigation and was recently sold to Intel for a large sum.
Listen to the feedback
He is happy to give Telia his recipe for the perfect pitch, and adds:
“Of course it is important to listen to the feedback. That is where you get all the nuggets to fine-tune your idea, and valuable advice to help you move forward.”
Five steps to the perfect pitch
- Explain credibly what problem you are solving
Nobody just buys a spade; they buy it to dig a hole. There has to be a pressing problem, something big and important enough to a large number of people. You have the worst odds: you have no money, nobody knows your company, and you want them to buy from you instead of their normal supplier. Provide facts and figures to show that the problem exists.
- Explain how you have the answer to the problem
Perhaps you can make electric cars go further. It may be a new technology or known technology combined in new ways. There will always be competitors aiming to solve the same problem as you, so your proposal has to be strikingly different from what is on the market. So you need to know what is out there.
- Be a strong team
If you are a single engineer at DTU trying to sell to the world’s biggest carmaker, or the whole team from CBS is keen on an IT solution but none of you are programmers, you’re in trouble. Some people need to program and some need to sell – and the formal qualifications have to be in place. This means selling not only to customers but also to investors and future employees.
- Be dedicated
Throwing yourself into entrepreneurial projects is the stupidest thing you can do from a risk assessment standpoint. So you and the rest of the team need to have the will, the desire and the drive. It is no use sitting in a good job waiting for investors. The investors are looking for the fools who are really enthusiastic about their project and dare to go for it.
- Show results
Show something concrete beyond the ideas stage. If you want to sell an idea for an app, don’t approach an investor or business partner without a demo edition or a beta version. You may have carried out pilot studies to verify the problem and show that there is market interest in the solution.