A Lean and Agile (Startup) Life

Restarting My Life in Order to Start my Company

Pitching a Business vs. Pitching a Product

                                                                                                                                                                         

Attending meetings where I get to interact with other entrepreneurs and investors has been extremely valuable, and yesterday’s was in the top five for sure as I learned one of the fundamental lessons of pitching a business to investors.

To start, it was over breakfast, which is always a plus for me as I love to eat, especially after being stuck in traffic for over an hour.   It was put on by the Silicon Valley Association of Startup Entrepreneurs, and hosted by Townsend Kilpatrick, LLP.  The three Sponsors were Ron Weissman of Apax Partners and Band of Angels, Brian C. Colucci of Townsend Kilpatrick, LLP and Jai Kumar of Vigyana Systems, Inc.  

I thought it woud be a great opportunity for me to meet more entrepreneurs and investors in Silicon Valley and to get some feedback over casual discussion and danishes on my company.

Shortly after arriving late (dang you CA-17/85 Interchange!) we were told to give a quick intro and pitch about our businesses.  Everyone got a few minutes and then was questioned by the sponsors and other entrepreneurs for about ten minutes.  It was awesome!  

I felt unprepared, but still managed to describe my product pretty completely and got some good feedback from everyone.  Hearing other people pitch and both giving the feedback to them and hearing Ron question them and offer advice made me analyze my own pitch even more to see how I can continue to improve on it.

When we were wrapping up to leave, Brian said “All of you gave great pitches about your products, but what you have to remember is this.  Investors invest in businesses, not products.”

Ron then added the four levels of company development and what the investor looks at (grossly simplifying their actual process)

You develop an awesome Technology.

You turn your technology into an awesome product.

You create an amazing company to improve and distribute the product.

KEY POINT: Can your COMPANY transform into a viable BUSINESS?

Because it’s a business that makes money and not a product, the investor needs to understand the business and not just the product before they start writing checks.

So now, the next time I pitch to investors, I’ll describe the BUSINESS that I am building and not just the product.  That lesson right there IS worth the membership dues and event fee several times over!  If you are in SV and have a startup or thinking about it, I strongly urge you to join this group.

  1. ravimik posted this
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