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  • 1.  empirically, what are the most important parts of a business pitch?

    Posted 06-08-2017 10:04
    Dear colleagues,

    Is anyone aware of any empirical data regarding which of these topics (below) investors weigh most in evaluating whether to invest (and/or move to conduct due diligence on an investment opportunity)? When an entrepreneur is preparing a pitch deck for an investor, there are typically 9 topics which are anecdotally (from Guy Kawasaki and others) important to include. But, so far as I can tell this is not based on empirical findings.

    Thoughts appreciated. And, are there any topics missing from this list?

    1. The Problem/Need. The pain this new venture will alleviate and the size of the market are clearly articulated.  
    2. The Solution: How the new venture will alleviate the pain – i.e., what the new venture will sell/provide and its value proposition – is explained clearly.
    3. The Business Model: How the new venture will make money – i.e., the customers, the channels of distribution, and the gross margins – are explained.
    4. The Underlying Magic: The technology, secret sauce, or magic behind the product or service is likely to provide a competitive advantage.
    5. Marketing and Sales: How the new venture will reach its target customer and its marketing leverage points are explained.
    6. The Competition: A complete view of the competitive landscape – perhaps including side-by-side comparisons of alternatives – is presented.
    7. The Management Team: The key players on the management team and its advisors are profiled, and their value to this new venture is clear.
    8. Financial Projections and Key Metrics: A financial forecast of dollars and other key metrics indicates strong potential for value creation and capture by the new venture.
    9. Current Status, Accomplishments to Date, Timeline, and Use of Funds: The current status of the product or service, what the near future looks like for the venture, and how it will use external funding are all described.

    Feel free to respond to the whole listserv, or email me directly. I am happy to compile responses and distribute to anyone interested.

    Best, Jeff


    Jeff Pollack
    Associate Professor 
    Management, Innovation, and Entrepreneurship Department
    Poole College of Management
    NC State University
    2801 Founders Drive, Campus Box 7229
    Raleigh, NC 27695-7229
    804.397.0818 phone
    jmpolla3@ncsu.edu


    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!


  • 2.  empirically, what are the most important parts of a business pitch?

    Posted 06-08-2017 10:24
    Jeff, 

    Tom Eisennman (HBS) teamed up with DocSend to evaluate what investors pay attention to in a slide deck. I don't know that the findings are published in a journal, but they are reported here: https://docsend.com/view/p8jxsqr

    The most recent issue of HBR (May-June 2017) has an article entitled "How Venture Capitalists Really Assess a Pitch" It is based on a collection of work by Lakshmi Balachandra (Babson). This is the work cited at the end of the HBR article:  "Calm, Cool and Competent: The Impact of an Entrepreneur's Displayed Emotions on Investor Decisions," by L. Balachandra and A. Corbett (working paper); "Pitching Trust: Investors Value Character Over Competency," by L. Balachandra (working paper); "Investor Mentor: Evaluating the Entrepreneur as Protégé," by L. Balachandra, H. Sapienza, and D. Kim (working paper); "Don't Pitch Like a Girl! How Gender Stereotypes Influence Investor Decisions," by L. Balachandra et al. (Entrepreneurship Theory and Practice, forthcoming). 

    None of this directly answers your question, but it does offer some hints and pointers and should get you slightly closer to some of the answers you are looking for.  

    Kind regards, 

    Greg

    On Thu, Jun 8, 2017 at 10:04 AM, Jeff Pollack <jmpolla3@ncsu.edu> wrote:
    Dear colleagues,

    Is anyone aware of any empirical data regarding which of these topics (below) investors weigh most in evaluating whether to invest (and/or move to conduct due diligence on an investment opportunity)? When an entrepreneur is preparing a pitch deck for an investor, there are typically 9 topics which are anecdotally (from Guy Kawasaki and others) important to include. But, so far as I can tell this is not based on empirical findings.

    Thoughts appreciated. And, are there any topics missing from this list?

    1. The Problem/Need. The pain this new venture will alleviate and the size of the market are clearly articulated.  
    2. The Solution: How the new venture will alleviate the pain – i.e., what the new venture will sell/provide and its value proposition – is explained clearly.
    3. The Business Model: How the new venture will make money – i.e., the customers, the channels of distribution, and the gross margins – are explained.
    4. The Underlying Magic: The technology, secret sauce, or magic behind the product or service is likely to provide a competitive advantage.
    5. Marketing and Sales: How the new venture will reach its target customer and its marketing leverage points are explained.
    6. The Competition: A complete view of the competitive landscape – perhaps including side-by-side comparisons of alternatives – is presented.
    7. The Management Team: The key players on the management team and its advisors are profiled, and their value to this new venture is clear.
    8. Financial Projections and Key Metrics: A financial forecast of dollars and other key metrics indicates strong potential for value creation and capture by the new venture.
    9. Current Status, Accomplishments to Date, Timeline, and Use of Funds: The current status of the product or service, what the near future looks like for the venture, and how it will use external funding are all described.

    Feel free to respond to the whole listserv, or email me directly. I am happy to compile responses and distribute to anyone interested.

    Best, Jeff


    Jeff Pollack
    Associate Professor 
    Management, Innovation, and Entrepreneurship Department
    Poole College of Management
    NC State University
    2801 Founders Drive, Campus Box 7229
    Raleigh, NC 27695-7229
    804.397.0818 phone
    jmpolla3@ncsu.edu


    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!



    --
    Greg Fisher
    John and Donna Shoemaker Faculty Fellow in Entrepreneurship
    Field Editor: Journal of Business Venturing
    Assistant Professor of Entrepreneurship
    Department of Management & Entrepreneurship
    Kelley School of Business HH3137
    Indiana University
    1309 E. 10th St.
    Bloomington, IN 47405-1701
    +1 812-855-2763 
    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!


  • 3.  empirically, what are the most important parts of a business pitch?

    Posted 06-09-2017 02:21

    Hi Jeff,

    I saw Greg mentioned my write-up in HBR (thanks Greg!).  I was researching investors' interpersonal considerations of entrepreneurs during the pitch in those studies (delivery style, affect, behaviors, etc.). 

     

    In terms of the components of a slide deck, I think your list is good - those components seem to be consistent for most investor decks.  Because of that it may be hard to determine empirically what 'really' matters as this content has become pretty standard.  Having said that, the docsend info that Greg sent is a really interesting approach with some really interesting findings!

     

    Below is the outline for a pitch deck that Golden Seeds, an angel/early-stage fund provides.  We provided this template to entrepreneurs for their pitches in our women's VC conference today in Boston and it worked really well.  It's pretty similar to your list except it doesn't include a slide on biz model --which may not be clear at the earlier stages.  The other difference is the suggestion to include something on 'exit' potential. 

     

    Outline for a Funding Pitch:

    1)      What you do (company overview)

    2)      Problem/Market opportunity

    3)      Solution – what is the technology

    4)      Specific/unique "special sauce" (patents? Unique market solution?)

    5)      Competition (MUST have some, how do you differ)

    6)      Execution – milestones, what have you done to date?

    7)      How will you make money (projections)

    8)      Management team, bkgd, who do you need to hire

    9)      Use of funds and exit

     

    In terms of asking investors to evaluate these disparate components, well, I have data that angel investors' interest is most related to their evaluations of the biz model and revenue potential of the venture.  They were the components most correlated with their interest in the venture after the pitch.  But this is not reliable – these components didn't differ much from other components they were evaluating in the pitch (e.g. strong team, good exit potential, strong market, etc..) – they were all highly correlated.  Since all of the components were important, I think it's hard for investors to disentangle what components they really care about.

     

    It would be great to figure out how to analyze this further!  Please let me know if I can help out.

     

    Best,

    Lakshmi

     

     

     

    From: Entrepreneurship Division Listserv [mailto:ENTREP@AOMLISTS.AOM.ORG] On Behalf Of Greg Fisher
    Sent: Thursday, June 8, 2017 10:24 AM
    To: ENTREP@AOMLISTS.AOM.ORG
    Subject: Re: [ENTREP] empirically, what are the most important parts of a business pitch?

     

    Jeff, 

     

    Tom Eisennman (HBS) teamed up with DocSend to evaluate what investors pay attention to in a slide deck. I don't know that the findings are published in a journal, but they are reported here: https://docsend.com/view/p8jxsqr

     

    The most recent issue of HBR (May-June 2017) has an article entitled "How Venture Capitalists Really Assess a Pitch" It is based on a collection of work by Lakshmi Balachandra (Babson). This is the work cited at the end of the HBR article:  "Calm, Cool and Competent: The Impact of an Entrepreneur's Displayed Emotions on Investor Decisions," by L. Balachandra and A. Corbett (working paper); "Pitching Trust: Investors Value Character Over Competency," by L. Balachandra (working paper); "Investor Mentor: Evaluating the Entrepreneur as Protégé," by L. Balachandra, H. Sapienza, and D. Kim (working paper); "Don't Pitch Like a Girl! How Gender Stereotypes Influence Investor Decisions," by L. Balachandra et al. (Entrepreneurship Theory and Practice, forthcoming). 

     

    None of this directly answers your question, but it does offer some hints and pointers and should get you slightly closer to some of the answers you are looking for.  

     

    Kind regards, 

     

    Greg

     

    On Thu, Jun 8, 2017 at 10:04 AM, Jeff Pollack <jmpolla3@ncsu.edu> wrote:

    Dear colleagues,

     

    Is anyone aware of any empirical data regarding which of these topics (below) investors weigh most in evaluating whether to invest (and/or move to conduct due diligence on an investment opportunity)? When an entrepreneur is preparing a pitch deck for an investor, there are typically 9 topics which are anecdotally (from Guy Kawasaki and others) important to include. But, so far as I can tell this is not based on empirical findings.

     

    Thoughts appreciated. And, are there any topics missing from this list?

     

    1. The Problem/Need. The pain this new venture will alleviate and the size of the market are clearly articulated.  

    2. The Solution: How the new venture will alleviate the pain – i.e., what the new venture will sell/provide and its value proposition – is explained clearly.

    3. The Business Model: How the new venture will make money – i.e., the customers, the channels of distribution, and the gross margins – are explained.

    4. The Underlying Magic: The technology, secret sauce, or magic behind the product or service is likely to provide a competitive advantage.

    5. Marketing and Sales: How the new venture will reach its target customer and its marketing leverage points are explained.

    6. The Competition: A complete view of the competitive landscape – perhaps including side-by-side comparisons of alternatives – is presented.

    7. The Management Team: The key players on the management team and its advisors are profiled, and their value to this new venture is clear.

    8. Financial Projections and Key Metrics: A financial forecast of dollars and other key metrics indicates strong potential for value creation and capture by the new venture.

    9. Current Status, Accomplishments to Date, Timeline, and Use of Funds: The current status of the product or service, what the near future looks like for the venture, and how it will use external funding are all described.

     

    Feel free to respond to the whole listserv, or email me directly. I am happy to compile responses and distribute to anyone interested.

     

    Best, Jeff

     


    Jeff Pollack
    Associate Professor 
    Management, Innovation, and Entrepreneurship Department
    Poole College of Management
    NC State University
    2801 Founders Drive, Campus Box 7229
    Raleigh, NC 27695-7229
    804.397.0818 phone
    jmpolla3@ncsu.edu

     

    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!



     

    --

    Greg Fisher

    John and Donna Shoemaker Faculty Fellow in Entrepreneurship

    Field Editor: Journal of Business Venturing

    Assistant Professor of Entrepreneurship

    Department of Management & Entrepreneurship
    Kelley School of Business HH3137
    Indiana University
    1309 E. 10th St.
    Bloomington, IN 47405-1701

    +1 812-855-2763 

    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!

    ************************************** This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management. Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list. You can manage your subscription options, including joining or leaving the list here: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=entrep&A=1 If you have questions or need help, please contact Jeff Pollack (jeff_pollack@ncsu.edu) or Kevin Cox (kcox24@my.fau.edu). Ventures HO!