First posted on LinkedIn by Andrew Miles on May 5, 2021
Melbourne Angels members strive to help startup founders/CEO/MD with their pitch. Jordan Green recently noted to a BioTech founder; “In essence, you need to distil the story! The deck and the presentation are not the place for detailed academic references and arcane scientific language. Investment requires compelling evidence of commercial competence and that means communicating effectively and in terms that relate to commercial achievements – value inflection points. For this venture there is no doubt that those early value inflection points will hinge on scientific outcomes but, you need to be describing the meaning of the outcomes in commercial terms, not the scientific effort required to generate those outcomes.
Your audience want to understand the path to market and where your effort fits in that journey. The path to market is to complete sufficient evidence of the efficacy of the product, its ease of manufacture, its ease of inclusion in a product process using standard manufacturing techniques and the benefits it enables for a product so that a developer/manufacture will acquire your company before actual product development has started. This all hinges on you having the right IP rights for the product, that they represent a strong IP position and that you have the freedom to assign those rights.
It’s great that you identify a USD$#b market and that ##% of it is served by a product that has unwanted side effects. What you have not explained is why the market will want and pay for a drug using your product, nor how much of the market your drug might reasonably capture. I know that you are not proposing the company go all the way to drug development and delivery but, to properly recognise the value to the acquirer (the exit) this potential must at least be outlined”.
Why is the pitch important?
A poorly designed pitch hurts the founders most of all. It wastes their time, damages their reputation and disappoints expectations in their audience. Not every pitch is, or even can be, perfect. Indeed, what makes a pitch perfect for one investor will not be the same for all other investors.
However, a good pitch is possible for every founder if you just focus on delivering what your audience needs to hear and not what you want to say. This is the same approach as you need for your business where you must be selling the benefits the customer needs not the features of which you are proud.
What do the investors need to hear?
Most investors tell you that, e.g. check out the Melbourne Angels investment criteria. On their website, or in their invitation to pitch, in their profile, or during an interview you can watch good investors are usually trying hard to provide some guidance as to what they want to hear in a good pitch. Your pitch is you trying to sell your company so, as with any sales effort, start by trying to understand your customer.