JumpStart: IdeaExchange Blog

PerfectPitch, the national competition in which entrepreneurs pitch their ideas via a video submission and can end up presenting to the country’s leading venture capitalists, debuted in 2009 with truly 2009 marketing techniques (including the opportunity for an entrepreneur to pitch based on who submitted the best Twitter pitch).

It’s now back again and as with last year, entrepreneurs who are able to react quickly have an advantage. (The deadline is August 26th, which is two weeks away). Here’s what you do:

• Submit your pitch ONLINE - a pitch may include a written description, photos, and video about your BUSINESS or IDEA
• Deadline for submissions is August 26th, 2010. Early applicants will receive helpful feedback and may make edits to improve their pitches
• Judges will review all pitches – Top 3 win prizes and an invitation to pitch LIVE to investors and the audience of the PerfectBusiness Summit 2010

You can find full details here on entering, including the list of investors representing over $10 billion in assets who will be judging. (Did I mention that JumpStart’s own Ray Leach is one of the judges, as is North Coast Angel’s Todd Federman and venture capitalists from leading investors such as DFJ and Google?)

Cathy Belk is the Chief Relationship Officer of JumpStart. She specializes in branding, marketing communications, and business and relationship management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

The challenges of raising investment capital for your business and how to best prepare for an investor have been well documented by many industry experts. Yet having witnessed scores of presentations over the years I find that many entrepreneurs routinely miss a few key areas. And while there are certainly no guarantees or full-proof plans that will automatically result in successfully raising capital, the following suggestions should help you along the journey:

1. Present your business with energy, enthusiasm and confidence –- if you’re not excited about your business endeavor you’ll have a very difficult time getting an investor excited.
2. Know your business and industry cold – take the time to really understand and segment your chosen market. Know the trends, and consider doing a SWOT analysis on your chosen market (Strengths, Weaknesses, Opportunities and Threats).
3. Know your competition cold –- don’t make the mistake that so many have in assuming that “No one else is doing this”. If your investor discovers a recognized competitor that you should have discovered, you have instantly damaged your credibility.
4. Consider a comparison chart that demonstrates your unique advantages versus key competitors.
5. Clearly articulate your Value Proposition and what “makes your business so special’, and further explain how your unique competitive advantage represents both a significant barrier for your competition as well as a real benefit to your client.
6. Do your homework on the overall size of your market both domestically and internationally. That includes both consumer and commercial applications if applicable (overall market size or potential should approach $1 billion or better to really get the attention of investors).
7. Explain why you or a designated team member are the best candidate to serve as CEO.
8. Secure or “tee up” a deeply experienced management team. The people you surround yourself with are often the key deciding factor in securing investment capital.
9. Present a clear and “executable” plan to exceed $30 million in annual sales potential within 5 to 7 years. Remember that investors have options; they can choose to invest in any number of opportunities from traditional stocks and bonds to other high growth businesses. If you’re going to convince an investor to support your vision, you have to paint a large enough and clear enough picture that makes choosing your plan worth the risk.
10. Make sure the “assumptions” that drive and support your financial projections have been reviewed by experienced personnel so that such key items as unit sale prices and costs per unit have been thoroughly vetted.

As stated previously, in the journey of raising capital there are no magic bullets or guarantees. By incorporating these 10 tips however, you’ll be well on your way to dramatically improving your chances for success!

Darrin is Chief Economic Inclusion Officer of JumpStart and President of JumpStart Inclusion Advisors. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.

Any entrepreneur looking to grow their business is always thinking (or should be) about how to improve their investor pitch. Once you have an opportunity to get in front of an investor, you want to do everything you can to make your pitch successful. I offered some tips I’ve learned during my years coaching entrepreneurs in my post, ‘Things NOT to Do When Presenting to Potential Investors‘. Last week, a fellow blogger, Timothy Hay posted ‘Entrepreneurs’ Most Common Mistakes When Pitching VCs‘, offering some great builds on the ideas I’d shared.

Some of the key mistakes he shares, and my thoughts on each:

1. Not at least considering the potential of taking your company public someday. - Although IPOs are about as common as Browns playoff appearances these days, shaping your company so that it could conceivably go public is a great way to ensure that you are touching all the bases and thinking big enough. And… you never know… the Browns might make the playoffs, and you could be a candidate for an IPO.

2. Being overconfident. - If you remember, I said in my post that ‘Not Bragging’ is a mistake. You DO need to be confident, knowledgeable and sell yourself and your team. You shouldn’t be overconfident, and act like you have all the answers, however — the VC knows that you don’t. And besides, VCs have big egos — if anyone has all the answers, it will be them! Be sure to be willing to say that you “don’t know” or that you are “unsure” to certain questions, while accepting suggestions from the investors — they have seen a lot of companies, and have a lot of knowledge to bring to the table. The trick is to be thought of as “confident”, but not “overconfident”.

3. Never being audited. - This is directly related to my mention of having your detailed financials prepared - and going a step further to have them audited. This shows potential investors that someone else has validated your books, and mitigates their risk and questions in this area. Despite that, do NOT put the detailed financials into your investor presentation — they don’t care at that point. When I was raising money for my company, Ion Optics, we handed interested investors a CD that had all of our slides, our more detailed business plan, audited financials, articles on the company and technology, and other tidbits. This showed attention to detail, and made the investor’s life a little easier.

Read Timothy’s full post - and share your questions and additions so we can continue to share the knowledge gained through our collective experiences.

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.

When I was a kid growing up in the ‘70s, my environmentalist parents would take my sister and me on vacation trips to various national parks across the country, mostly in the West. How embarrassing to admit I was less than impressed by these trips, because I was a smarmy 8 or 9 year old and really just wanted to be at my friend’s pool. At this time, I think one of the badges of honor of folks like my parents was to wear a t-shirt, available at each of these parks, with language that followed a standard structure : “Follow me to…” with the name of the park or its biggest landmark on there (”Follow me to Old Faithful”, “Follow me to Glacier”, etc.) At the time, I could barely imagine wanting to follow anyone to any of these places, and I also couldn’t imagine being confident enough to ask someone else - visibly — to follow me anywhere!

But here I am, asking you to follow me. Or rather, follow us, JumpStart. Not to a national park (although I’d love to be able to visit one of those parks now), but in the 2009 use of the term, to follow our 140 character communications on Twitter. Just sign on, search JumpStartInc, and click follow. Easy as pie.

I’ve written a few posts in the past about Twitter, whether it was sticking around, and whether it’s the right place for various activities to occur (such as pitching investors). You’ll also notice that JumpStart didn’t jump into the game as fast as some other organizations. This wasn’t because we didn’t value it, or think that it couldn’t have any good uses. On the contrary: we wanted to make sure that if you gave us the honor of following us, we’d pay it back with valuable, helpful content, delivered at the right time. We’d also work to spread your messages. That activity takes time, so we wanted to make sure we had a resource plan in place so that you aren’t disappointed by a start/stop approach, or frankly, overall lameness.

So now we are ready and going! And I think you will find @JumpStartInc to be the right place to get the news right now from the entrepreneurial, investing, and Northeast Ohio communities. So it’s not a t-shirt, but I’m asking anyway — follow me to @JumpStartInc, and start following JumpStart today.

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.