On the new streaming show Entrepreneur Elevator Pitch, founders step into the Entrepreneur Elevator and have just 60 seconds to present their idea, product or business to a panel of investors. Whether an entrepreneur gets invited into the boardroom or sent back to the ground floor depends on what our experts think in that first minute. Here, we break down the lessons aspiring business owners can take away from each episode’s pitches.
Enthusiasm is contagious, as we see on episode 12 of Entrepreneur Elevator Pitch. When a pitch is stiff and rehearsed, it can overshadow any passion you feel about your product. When you speak from the heart with enthusiasm, energy and polish, those listening to your pitch often can’t help but respond with a similar level of excitement.
This episode of Elevator Pitch introduces us to four very interesting products, three of which earned an invitation from the investors to enter the boardroom. From this episode, we could easily see how personalities of business owners factor heavily into whether venture capitalists want to hear more from them.
Enthusiasm only gets you so far, though. Here are three important things you can learn from the latest episode of Entrepreneur’s popular streaming series.
Have fun, but have a plan.
“Glamping” (glamorous camping) is something to get excited about, especially for Leanne Tucker and Tara Ross, founders of ReCamped. Their campsite-based bed and breakfast brings gourmet meals, air-conditioned tepees, entertainment and nice bathrooms to the outdoors. The investors loved the pair’s enthusiasm and invited them in.
Unfortunately, despite the fun pitch, the duo is at a very early stage. Their business plan didn’t appear to come across very clearly and they hadn’t even purchased land yet. The team declined to invest. The lesson here is that enthusiasm is wonderful, but don’t come to investors unless there’s a lot more than an idea for them to invest in.
Another duo with contagious enthusiasm was Eve Fouche and Tami Bennett, founders of Mo Better Burgers in Los Angeles. The mom-and daughter team founded the burger restaurant in the ’90s and have built a moderately successful business. Their celebrity endorsements were what intrigued the team most, though, giving them an invite up to the boardroom.
Unfortunately, the duo’s financial goals seemed a bit too unrealistic for the panel, who declined to invest but agreed to advise them. Again, enthusiasm can get you in the door, but a strong business plan is what gets people to sign the dotted line.
Money trumps all.
Stress is a serious issue for many people, and is known to cause a huge array of health problems. Vicki Mayo has created TouchPoint, a wearable device purported to help reduce stress within 30 seconds of contact with the body. Mayo is an executive and child advocate who worked with neuropsychologist Dr. Amy Serin to develop the device, which earned $2 million in just the eight months before her pitch.
Although the wearable looked impressive to the panel, they were most drawn in by that impressive dollar figure. Once Mayo was in the boardroom, she was able to demonstrate how well the product works on the investors themselves.
But, even though money drew them in, the investors weren’t ready to hand over capital without a negotiation. Mayo wanted $2 million for 5 percent equity in her company, which put her valuation at $40 million. The investors thought that was way too high and offered her 4 percent for $400,000 equity, a $10-million valuation. Mayo took the deal.
Be ready to address the entrenched competition in your market.
Emily Ehert came to the team with an intriguing product. The Final Straw is a portable and reusable straw that can be carried in a purse or bag in a small packet. The straw can extend like a telescope and snap into place to fit into any size of beverage.
Ehert had an impressive array of statistics that stressed the straw’s environmental friendliness but in the end, it wasn’t enough. The market is dominated by a large number of players who are highly motivated to ensure that plastic straws remain in grocery stores everywhere. Even though one of the investors was an environmental advocate, the panel still felt it was simply too big a battle to wage. Entrepreneurs in such a field should be prepared to overcome these objections during their initial pitch if they want investors to hear more.
Although entrepreneurs should do their best to be authentic during a pitch, nerves can sometimes keep their true personalities from showing. It’s important as you’re crafting and honing your pitch that you make sure your natural enthusiasm for your product is clear from the beginning. Practice your pitch until you have it down pat. If you do, you’ll increase the odds that investors will want to hear more about your business. And once you get to that point, make sure a clear business plan and perhaps a profit is what the investors see.