By Joseph Czikk
Our first Elevator World Tour event last Thursday was a huge success and it was only made possible from a diverse panel of 12 seasoned judges. Over 100 eager startups vied for their attention at the CN Tower in Toronto and we wanted to know what it is like sitting on the other side of a pitch. Before they entered the highest elevator in Toronto they gave their opinions on everything from the best pitches to the worst turn-offs.
What is the most important quality in receiving a pitch?
Of six possible answers, we asked what the most and least important qualities were when receiving a pitch: the team, traction, the market, the problem and solution, the intellectual property or protected idea and how they can make money as an investor.
Each judge ranked these six qualities in importance and we scored each one based on points (six points for the most important quality, one point for the least important quality). Overall “team” scored highest of all six qualities.
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71 per cent of the judges said that the team was the most important quality to them. Similarly 71 per cent of judges said that IP/ Protected Idea was the least important quality in a pitch.
We all want a second meeting, but how many of us will receive one?
Some of our judges were more liberal with their estimates, saying as high as 33 per cent of elevator pitchers would receive an invitation for further discussions. Others put their number as low as five per cent. On average our judges told us that just over 15 per cent of pitchers would receive a second meeting.
“I try not to waste an entrepreneur’s time,” said Roger Chabra, a partner at Rho Canada Ventures. “If it’s not a fit for our fund I will let them know.”
The best pitch I ever received was…
With more than 25 years of experience in a variety of high-growth technology businesses Kerri Golden knows what she’s looking for in a meeting. The partner at JOLT technology accelerator in Toronto said the best pitch she ever received told her a story from start to finish.
“The founding team was so in sync that they were finishing each other’s sentences,” said Golden. “This ended up being a very strong indicator of their ability to work together and I invested.”
For Chabra three of the strongest pitches he ever received exuded complete passion for their business and market and came across with a “failure is not an option” attitude.
Advice for Elevator Pitchers: just get to the point
Our judges like to hear exactly what the idea is about rather than those that leave them wanting to ask more questions. The majority emphasized short, quick, clear and precise pitches that reveal what the problem and the solution is.
As a cofounder at Vancouver-based GrowLab Jason Bailey is known for his long resume of building successful businesses. He won’t mince words when it comes to what he wants to hear from a pitch. Don’t be fancy and clever. “Get to the point or I will rip you up,” said Bailey.
Does “getting to the point,” mean explaining the technology itself or the business model first? This question revealed a varied set of answers from our unique panel of judges. Some preferred the business model first while others preferred to hear about what the product does. Other judges couldn’t pick either choice.
Buzzwords and other VC turn-offs
Certain words or phrases are bound to scare off VCs and our judges were quick to indicate what those were. The unanimous losers are buzzwords or words that entrepreneurs don’t actually understand.
“I recall one of the worst pitches ever where I listened to a long list of mobile industry phrases and it became clear that the words had nothing to do with the business plan of the company,” said Golden.
Other (non) favourites were name-dropping; part-time team members, clone or “me too” ideas, lack of eye contact, aloofness, acting like others should already know what the idea is about and saying that there is no competition.
“Everyone has competition,” said Chabra. “Whether it is direct, indirect or the option for customers to do it themselves.”
Jonas Brandon is a venture investor and cofounder of Startup-North. He says that having no technical cofounder is a “recipe for failure.” McLeod agreed: “Any mention of outsourcing tech and it’s over,” he said.
The Toughest Questions
We asked our judges, “what is typically the hardest question you ask a person pitching?” and received a few thought-provoking answers:
Jason Bailey: Why do you care?
Jonas Brandon: Can I demo it?
Roger Chabra: What needs to happen in order for your business to get very big, very quickly?
Sunil Sharma, Managing Director at Extreme Startups: What is your strategy to withstand possibly a year or more of a funding draught?
John Ruffalo, Chief Executive Officer, OMERS Ventures: What makes you think you will beat out your competition?
Words to Live By
Finally, we asked our judges for their thoughts on the importance of the Elevator World Tour and how these entrepreneurs should approach it. As always, they did not disappoint:
“It’s as important as anything for entrepreneurs who are truly looking to build a venture scale business. Great entrepreneurs never stop pitching, day in and day out.
Everyone is busy, convince people quickly why they should spend time with you.” – Roger Chabra
“It is a silly thing. Have fun. It is not where you get a cheque, it is where you get a next meeting.” – Jason Bailey
“Be passionate, be direct, be quick, be engaging, be thoughtful, be confident, have great credentials, have a track record of something impressive.” – Sunil Sharma
“An elevator pitch event held in an elevator sounds like a goofy proposition, but few things are as important to your startup as figuring out how to encapsulate the reason for your startup’s existence. A coherent pitch is probably the first milestone that matters.” – Jonas Brandon