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What Makes A Killer Business Pitch For Branson And Other Top Investors

What Makes A Killer Business Pitch For Branson And Other Top Investors | Pitch it! | Scoop.it
Entrepreneurs don't have to be pitch perfect, but passion, projection of strengths and awesome products are essential

Business angels and venture capitalists and business angels play a vital role in new business creation, providing capital and access to a powerful resource network and enabling thousands of entrepreneurs to realise their dreams of creating and growing new ventures.

But they don’t make investment decisions lightly, and entrepreneurs hoping to secure some of their cash must deliver the Holy Grail of business funding; the killer investment pitch. But what exactly is it?

Virgin founder Richard Branson has invested in around 40 start-ups in recent years. In his view a pitch should ‘short, to the point, and fun to deliver’.

He says: “Keep it tight and simple. Explain what your company does and how it will change business for good, and highlight the strengths of your team to make it happen. Do this with an entertaining, unique and quick delivery, and you should make a lasting impact.”

Many of his own funding decisions were based on the outcome of micro pitches. One of the best examples Branson can recall was Igor Ruberts of Boxhug, winner of this year’s Virgin Media Pioneers Pitch 2 Rich competition.

He said: “It took him two minutes to explain how his storage company Boxhug worked, how it could improve people’s lives, and how it could scale. Then he gave everyone on the judging panel a hug – a great way to end his pitch!”

It takes a certain skill to be able to demonstrate that level of knowledge of your business model, its financial architecture, and target market in just two minutes. Yet the average length of a funding pitch to angel investors is ten minutes, still not a huge amount of time to cover the essentials in enough detail to satisfy a potential investor. However, many are not looking for perfection.

In theory, a killer pitch consists of many different aspects, says Christoph Janz founding partner at Berlin-based early-stage VC Point Nine Capital; an experienced and well-rounded team, a large market opportunity, a proven product, scalable customer acquisition channels, clear competitive advantages.

“In reality, at the seed level, which is where we invest, almost no start-up ticks all these boxes,” he says. “However, as former general and secretary of state Colin Powell once said, ‘you hire for strength and not for lack of weakness’.

Similarly, Point Nine Capital doesn’t look for the ‘perfect’ pitch, but for awesomeness in some areas; typically some combination of a gorgeous product, enthusiastic beta users and extremely passionate founders.

Janz says: “One stand-out pitch I recall, which led to an investment from us, came from Mambu, a cloud-based banking software platform. Included in the pitch was the fact that Mambu enables financial institutions to provide banking services to the billion or so people on the planet who don’t have a bank account, and could therefore have a huge beneficial impact on the lives of tens of millions of people.”

However it is often the deal-making activity of venture capitalists that receives the most interest. VCs receive thousands of business proposals every year, yet only invest in a few businesses, in an intriguing a decision-making process that Jeffrey Petty and Marc Gruber, academics from the University of Lausanne in Switzerland, set out to investigate.

They analyzed 11 years of contemporaneous deal-related data from a relatively small European VC firm that focuses on investing in companies within a specific high-tech, high growth industry. During this time frame the firm received 3,631 proposals and made 35 portfolio investments across two funds, at an average acceptance rate of one per cent.

Among the key conclusions from the research was that ‘no’ was not necessarily a definitive rejection. In total, 438 proposals were submitted more than once, with the acceptance rate for resubmissions approximately the same as for original submissions.

A surprisingly high 10% of the 3631 pitches were classified ‘dead’ because the VC firm did not have the opportunity to pursue them. Around half failed to respond to the VC’s requests for more information, and the rest simply appeared to have changed their mind about VC funding.

Product and service-related criteria were a key reason for rejection, but rarely the management team.

“You can always bring in a management team,” says Gruber.

The most important criteria for deal rejection were VC fund-related. Many viable pitches failed because of VC perception that evaluating, monitoring or managing the deal would take too much time.

So what can entrepreneurs take away from Petty and Gruber’s research?

“If the VC has shown any interest at all in the proposition, the entrepreneur needs to stay in touch with the VC and build a relationship. They should not be afraid to resubmit a proposal at a later date,” says Petty.

They should also do due diligence on the VC firm and tailor a proposal to the firm’s portfolio strategy at that point in time.

“Two firms with similar investment strategies may view the same proposal differently because they are focused on different criteria or are at different stages in their fund’s lifecycle,” adds Gruber.

In a nutshell, a killer pitch is one in which the underlying message is crystal clear, says Andrew Morris, Chief Executive of the UK Academy for Chief Executives.

He said: “This venture is the result of creative thinking, validated by thorough research and supported by cautious forecasts, all delivered by the most committed professional team in the business.”



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Marc Kneepkens's insight:

A good pitch is essential to get funded.

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P2P lending: What's to worry?

P2P lending: What's to worry? | Pitch it! | Scoop.it

Former FDIC chair Sheila Bair explains why a good idea needs more regulation. (Investors are making good money extending credit to their fellow Americans via crowdlending platforms!

Brother, can you spare a loan?

Investors are making good money extending credit to their fellow Americans via peer-to-peer lending platforms (P2P), such as Lending Club and Prosper. P2P is also good news for borrowers -- most of whom are consolidating debts -- because they can often get interest rates lower than those offered by banks.

Mon dieu! Decent investor returns. Cheaper loan rates. Could this actually be a good financial innovation? Perhaps, but I see some causes for concern.

Securities regulators fret about potential fraud, since the companies don't always document borrower incomes. The cops also worry that investors can't understand how the companies determine the likelihood of default. Says David Massey, North Carolina's Deputy Securities Administrator: "Peer-to-peer investors generally don't have direct access to the information that might let them know whether they're buying into a loan that's going to pay them back, or whether they're taking a flier on a situation that's going to end in a default."

To read the full article, click on the title.



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Via Therese Torris, Marc Kneepkens
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Therese Torris's curator insight, December 28, 2013 5:13 AM
Expresses concerns that the cost advantage of crowdfunding over community banks might come only from lighter regulation
Marc Kneepkens's curator insight, December 28, 2013 12:43 PM

Good introduction to Peer-to-Peer lending. A good alternative for some.

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Intel Capital Invests $65M In Startups Ranging From Interactive Video To Wireless Electricity | TechCrunch

Intel Capital Invests $65M In Startups Ranging From Interactive Video To Wireless Electricity | TechCrunch | Pitch it! | Scoop.it
Intel Capital has announced investments in 16 companies, totaling $65 million. The investments spanned cloud services, datacenter technologies, mobile and..

Intel Capital has announced investments in 16 companies, totaling $65 million. The investments spanned cloud services, data-center technologies, mobile and consumer-related services.

The investments are as follows:

  • CloudFX of Singapore is a cloud strategy consulting company that helps companies re-architect IT infrastructures, operations and helps institute DevOps style practices.
  • Cloudian of Japan and the United States, is an object storage platform that is compatible with Amazon Web Services, Citrix Cloud Platform, Apache CloudStack, OpenStack and other cloud services.
  • CSDN is a Chinese company that provides a community website and services platform for IT professionals in China. According to Intel Capital, it has 27 million registered users and 500,000 enterprise partner members. The company owns several Chinese IT communities such as CMDN, a mobile developer community and IT recruiting website Pongo.
  • DotProduct provides software for real-time capturing and processing of 3-D data on Android tablets. Use cases include documenting crime scenes to imaging movies sets for gaming and entertainment applications.
  • Wayz Japan is a service to store, manage, access, share and organize files anywhere on any device.
  • Interlude is an Israeli platform provider to create interactive videos that allows viewers to determine what happens next in the viewing experience.  Its authoring platform.-Treehouse, allows video creators to map, build and publish Interlude videos on Web, mobile and social platforms. Pretty cool.
  • Lintes Technologies, is a Taiwan-based company that makes the Thunderbolt peripherals that provide high-speed data transfer. According to the company website, Thunderbolt was developed by Intel, and brought to market with technical collaboration from Apple.
  • Perpetuuiti TechnoSoft Services of Singapore and India, offers advanced data recovery technologies that help businesses in complex  IT environments, orchestrated across virtual and physical computing resources in different data centers.
  • Prism Skylabs, which today received $15 million in funding, helps companies use footage from existing security cameras to provide retailers and other businesses with “web-style analytics.”
  • Reduxio Systems, of Israel, boasts it offers infinite data recoverability through real-time primary storage deduplication and protection technologies.
  • Rocketick, also of Israel provides software simulation acceleration for chip verification, helping reduce time-to-market of new designs.
  • Savaari Car Rentals is an online car rental company that offers car rentals across 60 cities in India to both retail and corporate customers.
  • SBA Materials develops “nano-porous dielectrics” that for example, can help improve the performance of advanced chips used in mobile devices while reducing their power consumption.
  • SkySQL, of Finland, announced it has raised $20 million to deepen its support for MariaDB, the fast growing open-source relational database and the emerging database of choice for Wikipedia.
  • WiTricity specializes in wireless electricity. The company was founded in 2007 with clients in consumer electronics, automotive, medical devices and defense.

Intel Capital is an active venture group. According to CB Insights, it is the third most active investor in security technology companies. The analyst group reports that it has recorded the highest number of security exits among investors since the start of 2012. Among Intel Capital’s recent security exits include FireEye and Palo Alto Networks.

For links to each of those companies, click on the title to see the original article on TechCrunch.


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Looking for VC capital? Learn from the best, watch this presentation by the CEO of Growthink: 'VC Pitch Formula'
Marc Kneepkens's insight:

More and more VC capital is coming from cash rich companies like Intel.

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Richard Platt's curator insight, December 9, 2013 6:11 PM

About time the motheship spent some $$

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JOBS Act green light unlikely until fall

JOBS Act green light unlikely until fall | Pitch it! | Scoop.it
Signed into law in April of 2012, the JOBS Act has created much buzz within the start-up industry. The act lays out provisions meant to help businesses raise money directly through ordinary investo...


On the SEC's timing, and the aspect of FRAUD in Crowdfunding!

Marc Kneepkens's insight:

Excellent information!


New to Crowdfunding:? Here is an article with some of the basics: http://www.business-funding-insider.com/crowdfunding.html

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20 words and phrases that will doom your pitch

20 words and phrases that will doom your pitch | Pitch it! | Scoop.it
Use these 'cursed words,' and many reporters and bloggers will delete your email. So will your employees. Plus, civilization might end.
Marc Kneepkens's insight:

The same in business plans and investor presentations of any kind.


Some more good articles here: www.business-funding-insider.com

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20 Practical Tips For A Great Business Plan

20 Practical Tips For A Great Business Plan | Pitch it! | Scoop.it

Have you started a new business, or are you contemplating finally launching that venture that has been on your mind for a long time?  If you want to succeed you’ll need a plan.

You don’t need a fancy business degree to be successful, but you do need vision, determination, organization and hard work.  A functional business plan is a good place to start.  This article will give you 20 “practical tips” that will start your business off on the right path.

To read the full article, click on the title.


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Via Daniel Watson, Marc Kneepkens
Marc Kneepkens's insight:
Great insights. Well worth reading, highly recommended,
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Alwin Samayoa's curator insight, February 7, 2014 10:06 AM

"Maximize your profit payoff and the speed of completion on every project you undertake to grow your business"

Alwin Samayoa's curator insight, February 7, 2014 10:09 AM

"Maximize your profit payoff and the speed of completion on every project you undertake to grow your business"

Sigrid de Kaste's curator insight, February 8, 2014 4:29 AM

Yes you need a plan...one you can work with, not one that sits in the bottom of your draw...take a look and digest these 20 tips

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7 Signs You’re Fundraising Too Early

7 Signs You’re Fundraising Too Early | Pitch it! | Scoop.it
Perhaps it’s the new ”American dream” of scaling like Zuckerberg or selling like Systrom, but every entrepreneur seems to think that if they’re going to make it big, they have to raise money asap.

The amount of money you raise has become associated with your perceived success, credibility, respect in the valley… as if you have to raise money to be legit.

As a result, way too many startups are raising money way too early.

I know this to be true, because I’ve been one of those people.

This past summer we spent about 3 months of our time trying to raise money. We weren’t successful. The truth is, it was too early to be fundraising. I know that in hindsight, but at the time I convinced myself otherwise.

We had taken $50,000 to join the 500 Startups accelerator which is built to help you fundraise and grow. After a couple pivots we still hadn’t figured out our product-market-team fit yet but figured if we could play the fundraising game right, we could still raise our round. Hell, we got into 500 because they liked our team, who’s to say we couldn’t get other investors on board?

That’s the story that’s told so often. You have to pitch 100 investors before one says yes, then the other investors you spoke with will want to get in as well. You have to create the perception that they’re going to miss out on a deal and that time is limited. If you know how to talk to investors with confidence and create the perception of demand, you’ll raise your round.

We bought into that idea…all in.

Continue reading... click on the title of the article.


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Why are you doing this? Why are you an entrepreneur? Watch this video! https://growthink.infusionsoft.com/go/gic/gt4045/


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Marc Kneepkens's curator insight, December 13, 2013 5:19 PM

Get ready first, the more ready you are, the easier money will follow.

This is a great article from a real entrepreneur. Great read, but don't just read, apply his conclusions to your fundraising.

Better even, take a look at the video 'Why are you doing this?' right above this window.

Marc Kneepkens's curator insight, December 13, 2013 5:29 PM

If you are serious about succeeding with your Startup, including Fundraising, building a great company, and exiting that company when the time is right, take a look at this video. This is Startup School at its best!




Why are you doing this? Why are you an entrepreneur? Watch this video! https://growthink.infusionsoft.com/go/gic/gt4045/


Lori Wilk's curator insight, December 15, 2013 11:50 AM

As we launch, we want to build on a structure and a solid foundation, most of us have lots to learn.

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How Funding Works - Splitting The Equity With Investors - Infographic

How Funding Works - Splitting The Equity With Investors - Infographic | Pitch it! | Scoop.it
This infographic shows how funding works for a hypothetical startup splitting equity with angel investors, venture capitalists and IPO.
Marc Kneepkens's insight:

Great chart, says it all. Thanks Anna Vital.





This article and chart offered to you by:

www.Business-Funding-Insider.com  Your site for information about funding, investors, free business plan templates, free llistings.


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5 Hot Opportunities for Start-ups

5 Hot Opportunities for Start-ups | Pitch it! | Scoop.it
Fresh numbers from Intuit shine a light on where consumers are spending the most--and where you might want to look for new business ideas.
Marc Kneepkens's insight:

Very interesting article, every Start Up should be aware of these trends and take advantage of them.


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Startup Professionals Musings: 5 Startup Concepts That are Not the Next Big Thing

Startup Professionals Musings: 5 Startup Concepts That are Not the Next Big Thing | Pitch it! | Scoop.it
Marc Kneepkens's insight:

I choose to spread this article, real innovation is what is needed.

Get some good advice on funding for startups here: www.Business-Funding-Insider.com


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