Startup competition pitching is hard. You have limited time to convey a lot of information in a compelling and engaging way. The right structure is the basis for a winning pitch and can mean the difference between taking home the gold (literally) and eating ramen for another month (or more).
As an entrepreneur, Inc 500 CEO, and business coach, I’ve helped dozens of startups with their pitches and I’ve been a judge in competitions for many years. Over that time I’ve develop some basic guidelines and recommendations I give my teams. All of these are focused on maximizing the team's ability to convey the right information in an engaging and convincing way. This structure is specific to competition pitches. While similar to investor pitches, they differ in a few important ways which is important to consider before getting started.
Most competitions have a limited number of entrants and the process is forced to award places/money to the people within the pool. With an investor pitch you are competing against complacency and the “do nothing” option. In competitions, judges don't have the option to choose nobody (usually). This means you only need to be the best one that day. With an investor pitch, you need to convince them you are better than anything they “might” see in coming weeks or months.
The format typically gives you a fixed amount of time during which the judges are obligated to listen. There is generally also a fixed amount for questions which makes it unlikely they will interrupt your presentation. An investor can cut you off anytime and every phone call is a potential distraction. This allows you to plan out your presentation with specific structure and timing.
A competition is often filling a higher mission than just investment return. Competitions are usually organized or backed by people with a “purpose”. This could be to support a certain demographic or community or institution. Some competitions have specific application criteria or judging standards to reinforce these. However, even if they don’t, a smart team takes into consideration that judges and organizers want to showcase their selection. Figure out what would make a good-looking winner and tailor your pitch accordingly.
Finally, many competitions are straight-up grants or low/no interest debt, rather than equity. This means that the investment proposal is usually not as important, or at least not considered as heavily, as it would be in an investment pitch. Even in the case when winning involves an equity position, the judges are usually not directly investing their own money. Also, the equity position is usually fixed (X number of dollars to Y percentage of equity) and doesn’t get negotiated. All of this means that you may need to make a detailed case for valuation or provide a return/exit strategy.
Taking all of this into consideration, the general structure of the pitch is based on the idea that you want to present a clear and compelling business model and an engaged and charismatic team within the time permitted. You need to make it easy for the judges to compare against the other entrants and feel good about choosing you over them. And most importantly, you need to be a choice that the judges are going to “feel good” about selecting.
Here is what I typically suggest for the pitch structure:
What's the problem?
First, present the problem you are solving and why the problem is a problem. Who does it impact? How many people? What pain are you alleviating? What happiness are you enabling? If you don’t address the problem what horrible thing is going to take place or opportunity will be squandered? You want to make this emotional, not just logical. Personalize the problem by talking about specific stories of specific people (real people if you can). Show faces and contexts. You want the judges to become emotionally, not just intellectually, drawn into the presentation.
Why hasn't it been solved already?
Second, describe what a good solution needs to consider and accomplish. Where and why have people failed up until now? What skills need to be applied? What knowledge needs to be learned? What external factors need to be in place? This section sets you up as the best solution relative to the competition. You want to define the selection criteria such that only your approach will work and other people's approaches are doomed for failure. Tilt the table towards you by emphasizing your strengths as being the only important evaluation criteria. This will allow you to compare yourself as being far ahead of the competition.
Third, present your solution in simple terms. You need a one, maximum two, line description of your concept. “We allow college alumni to stay connected and plan events via online community” (http://alumnispaces.com) or “We provide the insight and support of a great high school guidance counselor through an easy-to-use self-service web application” (https://admitted.ly/).
The key here is you need to provide the judges with a memorable description of your concept. They need an anchor to “get it” and be able to understand what you're proposing. If your idea is not clear to them, they will get caught up in trying to resolve it in their minds and won’t be able to pay attention to the rest of your pitch. I’d rather have teams come up with a description that might not be totally accurate but easy to understand, than try to describe their concept with perfect fidelity and leave the judges confused and questioning.
Further, to the extent that you can make it catchy and easy to remember, you will enable the judges to recall and refer to your idea and team quickly. Judges spend a lot of time trying to sort through many entrants and discussing the relative merits. I’ve found that entries with easy to refer to ideas get talked about more. As a result they tend to get more time being discussed. Though this won’t help a bad idea, it does mean that it’s less likely that a good idea will be ignored.
Why you're better than others
Fourth, position yourself against the competition using the criteria you established in step two. Generally, this is one or more 2x2 matrices showing how you compare. You want to show that even though some competitors maybe close to you on one axis, they are far behind on another. Show that you’re uniquely ahead of the game and that your mix is the best mix to solve the problem successfully.
How are you going to make money and when?
Fifth, describe your high-level financial model. Keep it simple. Show costs and revenues and cash flow for two years; generally in quarters. Only show months if there is something irregular or unique that can only be shown on a monthly basis. For each period, show beginning cash balance, then expenses, then revenue, then calculate profit/loss, and finally ending cash balance.
If you already have capital infusion or debt financing, show that at the bottom and then carry the balance to the top of the next month. This way you can easily show operating expenses, revenue projects, cash flow, and financing requirements. For some competitions you can make this simpler. If there is a risk that the details become too complicated, I often coach teams to show the slide but only cover the points that are most pertinent to that jury. You want to visually show the jury you’ve done the work, but don’t want to take up time with involved explanations.
If you have been in business for some period of time and can show you’re executing your plan, show historical financials. If you’ve already had investment, show when this was done and what it’s been used for. Emphasize that you’ve put in money and time and others are supporting you already. The caution here is that you don’t want the judges to feel that you don’t “need” to win this competition. Make it clear that you winning this competition is critical. You want the judges to feel like they are going to make a true difference in the outcome.
Why should people invest?
Sixth, make your investment case. Again, for a competition, you can most likely keep this simple. For an investor pitch this would be covered much more thoroughly. Make some reasonable and rational projections as to where your company will be in five to seven years. I generally suggest teams start with a bottom up build and then do a top down check.
Start by showing how you’re going to grow the business. How many customers are you taking on each year? What’s your retention rate? What are costs per acquisition? What are your profits per customer? What is the lifetime value of a customer? Based on your assumptions and projections, show how that translates into annual revenues in the final years of the projection. I suggest five to seven years for two reasons. First, because that’s the typical time-frame for most venture and early-stage capital investors. Second, because it’s a reasonable range for making projections.
Once you have your bottom up model, develop a top down model to show that your projected size and total market share are not unreasonable. Calculate the market size by looking at the total number of current and projected customers, the average revenue per customer, and then show the percentage of the market you are projecting to capture. If you’re greater than 50% you’re likely to be judged as being over-optimistic with how much of the market you expect to capture. In this case, you might want to look at expanding the market to show new/more areas you can compete and grow. If you’re under 10%, you’re projecting that you’ll be a minor play in the market. This can come with concerns that you’ll either need to be acquired or will struggle as bigger players dominate the game. The sweet spot is 20-40%. Big enough to be a player, but not so big that you’d need to be the leader to get your return. All of this is highly dependent on the market and context, but they are good general guidelines.
Why are you the best team for the job?
Seventh, you need to present your team and why you’re the best people for the job. Let’s face it, the adage that one would rather invest in an “A” team with a “B” idea rather than vice versa, has a great degree of truth. In competitions, there is yet another reason to focus on the people behind the business: judges are there to enjoy themselves and feel good. They want to give awards to people they like, or at least know, not to business plans. Highlight the team and the unique qualities the team has to execute. Key things to highlight are related experiences, education, industry knowledge, track record, and unique access to resources. And make your team likable. Use a smiling, high-quality picture. Don’t use cell phone snap shots with friends and drinks cropped out.
Why should people care about your success?
Finally, in the last section I have my teams re-engage the judges emotionally by reiterating the importance of addressing the problem. Highlight what will happen if they don’t award your team. This can take the form of either a horrible impact or a tragically missed opportunity. You want the judges to feel like they are compelled to pick this team because they have a moral obligation. They should feel that finding a solution is so important they should award them regardless of the plan or the team.
Too many teams end on a business note and leave the judges with a spreadsheet showing impossible exponential curves. Instead, leave the judges with the picture of a child walking down the hall of the school with their head down because of bad college selections, the increase in college dropout, and the social tragedy of those who don’t go to college because they never had a guidance counselor to show them the way.
Bruce Eckfeldt is an entrepreneur and former Inc 500 CEO. He provides executive and team coaching and management training to startups and high-growth companies. For more information on Bruce and how he can help you and your company, visit http://www.eckfeldt.com or contact him firstname.lastname@example.org.