Last week I had the privilege of being one of the judges for the Get Started San Diego Pitch event. It was one of the better pitch events I have been to. Lots of interesting people, great food that included local SD food trucks and breweries, and the Broadway Pier proved to be an awesome venue with killer views of San Diego and the USS Midway.
But most impressive was the quality of the 6 companies. San Diego is an under the radar tech ecosystem but it’s growing in the right direction.
Pitch competitions are tough for an entrepreneur. You only have a limited amount of time to explain your business (2.5 minutes in this case) and then usually some Q&A from the judges. That’s not a lot of time to communicate what your business does, but that constraint forces an entrepreneur to distill the message and hone in on the most important components of the model. That exercise is insanely valuable. Being able to articulate your business in a clear, concise way is important not just for pitch competitions, but when talking to potential new hires, customers, and investors.
In addition to being one of the judges, the San Diego Business Journal interviewed me hoping to get some advice for entrepreneurs on how to succeed in pitch competitions. However, our conversation ended up taking a different path, covering the differences between giving a pitch at a competition and a pitching an investor one on one, who from the team should be pitching, and how often a company should be attending these events.
I think the question regarding the differences between giving a pitch at a competition versus a one-on-one with an investor is interesting because the two could not be more different. For example, at a pitch competition, you should practice the pitch over and over to the point where you know it cold and timed down to the second. It very much should be rehearsed. An entrepreneur should be able to hit the key points without trying to cram too much into the allotted time. After your time is up, the audience should have a very clear understanding what it is you do, even if everyone only understands it at a surface level.
However, a one-on-one with an investor is the polar opposite. When meeting an entrepreneur, I would much rather engage in a conversation. I don’t want to hear a perfectly crafted pitch I prefer a dialogue. Too many entrepreneurs think getting through all their slides means they’ve given a successful pitch. Your goal isn’t to impress me with your PowerPoint skills, it is to get me engaged and interested in what you are building. I want to interrupt you, ask questions, and go deeper on a few subjects. I want to jump around out of order of your deck. And while it’s completely fine to use a slide to illustrate a point, I hate it when I ask a question and the response is “Hold on, I’ll get to that on a later slide.”
But the most surprising reaction I got from the interview was in regards to my answer on how often entrepreneurs should compete in pitch events. I mentioned in the article I believe entrepreneurs should attend pitch events sparingly (more on why in a second) which elicited two very different reactions depending on which group of people I talked to. Other investors who read the article almost unanimously agreed with me while many entrepreneurs tended to bring up the benefits of non-dilutive capital, networking, and PR. I found this dichotomy very interesting.
I believe that, in most cases, the best use of an entrepreneur’s time is talking with customers and building product. I find the main reasons entrepreneurs typically give for attending numerous pitch competitions un-compelling. Yes, non-dilutive capital is a great thing for a young company. But that’s only if you win and it’s a one time check. You know what non-dilutive capital is even better? Revenue.
And yes, you may get to meet new investors and get their business cards at a pitch competition. But I promise you a warm intro from a trusted source is a far more effective way to meet an investor. If meeting VCs is your priority, your time is better spent networking with service providers and other entrepreneurs who have raised money and would be willing to make an introduction to an angel or VC for you.
Don’t get me wrong, pitch events serve a number of great functions. They are great events for the local ecosystem, good practice for entrepreneurs to tell their stories, and can be good for networking, so participating in a couple can be a good thing. But if some is good, more isn’t necessarily better. You shouldn’t be doing too many and you shouldn’t be spending money to participate (travel costs, entry fees, etc…).
SD Business Journal article: