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Sunday, Jul 14, 2024

VC’s advice for Startup Pitch Events: Distill Your Story, Attend Sparingly

Pitch competitions are common in startup land, and San Diego has two such events on the books for this week and next.

Photo courtesy of Sway Ventures

As reminder notifications and RSVP emails begin pouring into the inboxes of startup folks, it’s worth considering what pitch events can — and can’t do — for local entrepreneurs.

For those unfamiliar, pitch competitions are events in which a handful of startup founders present their business plans to an audience, often in front of a panel of investors or other judges. A winner is chosen and sometimes awarded a small chunk of cash to help fuel the startup’s operations.

In San Diego, Cox Business is putting on its first local competition this year called Get Started San Diego, which takes place Sept. 28. The following week, two nonprofits are joining forces to host San Diego’s largest pitch competition, Quick Pitch, which takes place Oct. 5.

Brett Munster, a venture capitalist at San Francisco tech fund Sway Ventures, will sit on the panel of judges for Get Started San Diego.

Munster sat down with the Business Journal to discuss what pitch competitions can and can’t do for entrepreneurs. Should founders bother? What should they know before pitching?

Here are some excerpts:

At a pitch event, what makes a founder’s presentation compelling?

You want to make it very clear and obvious what it is that your company does. The more complex the company, the harder it is to describe in a short pitch. When you’re constrained on time, you have to distill your story. You need to cover these four things: what it is you do, the problem you’re solving, the traction you’ve had so far, and why this idea can be big.

That’s where most pitch events go wrong. Entrepreneurs try to cram too much into their pitch

How does that differ from a real pitch, when a founder is one-on-one with a VC?

A rehearsed pitch is fine for a pitch competition. But I don’t want a perfectly crafted pitch when we’re talking one-on-one. I might interrupt your slide deck and ask you a question, and I want you to have a conversation with me instead. I don’t like it when I ask a question, and someone says, “Hold on. I’ll get to that in a later slide.”

Some people think getting through all their slides means they’ve had a successful pitch. But that’s not the barometer. A successful pitch is when you’ve got me engaged and talking. Maybe we go down a rabbit hole and you don’t get through all your slides. That’s OK, because by then I’m interested in your business and you as an entrepreneur.

CEOs are normally the ones who present at these competitions, but sometimes a different team member takes the lead. Is it a red flag if the CEO isn’t the one on stage?

It depends on the reason why they’re not on stage. If a CEO has a customer meeting and can’t make it to the event, then it’s totally fine to have your chief marketing officer pitch instead. But if the CEO is unwilling to pitch because they’re afraid to talk to people, then that’s a problem.

Early on, founders are the ones who have to sell. They have to convince customers to sign on with a no name company. They have to convince talent to take lower salaries than Google or Facebook could provide. You need some level of dynamism to attract customers and talent. If a founder does not have that, it’s tough to envision the company doing well.

How often should entrepreneurs be competing in pitch competitions?

I think pitch events and conferences should be attended very sparingly as a startup. I think an entrepreneur’s time is better spent building their business, their product, and talking to customers. That will yield far greater results than attending conferences and pitch events.

There are some strategic reasons to do pitch events and conferences from time to time, but if you’re doing one every month then you’re wasting your time.

Instead, spend time building a network around the investors you want to connect with. A warm introduction from a mutual contact will go a lot further than exposure at a pitch event.

When you’re meeting a company for a real life pitch, does it impress you if the startup has won pitch competitions in the past?

No. In all honesty, no. Pitch events can be great because you can get non-dilutive capital, or maybe you can get on someone’s radar. And they’re very helpful in building an ecosystem. That being said, whether you win or lose a pitch event won’t factor in my decision on a company at all.

You mentioned that pitch events are good for community building. Other than pitch events, what could San Diego be doing to build up its ecosystem?

In the time I’ve been here, San Diego has taken some great strides. This ecosystem is moving in the right direction. We’re seeing more companies developing interesting technology, and more investors coming down here. But I think it’s still very much under the radar. The best thing San Diego can do is get more exposure.

Building up an ecosystem takes time. When a company does really well and gets a good exit, then the founders break off and start new companies or become investors. Silicon Valley has 50 or 60 years of that. Los Angeles and New York have that. San Diego doesn’t have it in tech just yet.

We need some breakout successes that will spawn a new generation of startups. I think it will come in time.


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