07
Feb

Why startups don’t need more pitch coaching

If alien economists went to startup events they’d conclude that all startups fail because they don’t know how to pitch VCs. (Some people think that all economists are, in fact, aliens, but I digress). The Canadian Regional Boot Camp for Technology Start-Ups was announced recently by StartupNorth and others and I was struck by how much emphasis was placed on pitching.

The agenda consists of a session on “Funding Pitch Preparation” followed by “Pitching Session to a Review Board” consisting of Canadian and US VCs. I’d like to ask a simple question:

Why do so many startup events focus on pitching investors?

Here are some of my concerns:

  1. Funding is a solution to a problem that not everyone has. There are many great businesses that never raised a dime of outside capital. So why does every startup event talk about funding?
  2. When you put lipstick on a pig… We spend too much time training startups how to speak the language of VC. Investors are in serious trouble if they’re filtering deals based on the ability to pitch.
  3. The pitch does not equal the business. People argue that honing the pitch means improving the strategy of the business. But in the real world, hardly any startups have everything figured out in advance. What’s the point of hearing them lie on stage?
  4. 1 size does not fit all. Lots of people do unspeakable things in Excel to force their revenue projections to scale to $50 million. Why? Because VCs are only interested in business that “scale”. But scalable busineses are usually riskier businesses. A lot of entrepreneurs would be happy with the payouts from smaller exits.
  5. Watching awful pitches is entertaining... That’s why people watch the Dragon’s Den and pitch coaching at startup events. But entertainment value aside, isn’t there something more useful we could be doing?

I don’t mean to criticize event organizers all of whom are honestly trying to help entrepreneurs. I’m also not criticizing the VC model which is a very specific type of investment that has been improperly promoted as a funding solution for everyone.

I’d just really like to see more startup events focused on all of the problems facing startups, not just how to attract VCs.

Comments ( 8 )
  • Felipe Coimbra says:

    Hi Raymond, I actually went to the Canadian Consulate boot camp in California last year and I think this will be in the same format. Even though I agree with you that not all startups need VC money and that a lot of them shouldn’t even be spending their time trying to raise outside capital, I thought this event was extremely helpful to me. I got a chance to rethink about my idea, how to organize my thoughts and convey my message to people (investors or not), and get a lot of valuable feedback.

    So, I would strongly recommend everybody to sign up (especially if you’re working on your first startup). Also, if you do think you need to try to get funding in the US, the Canadian Consulate is a must have contact to have over there. They will be able to set up meetings for you that you would not by yourself.

    I was going to Brazil for the month of March, but I might change it so I can participate in it again.

  • raymond says:

    Thanks Felipe. There’s no question that events like the Canadian Consulate boot camp will be a great learning experience for entrepreneurs. It’s great to hear positive feedback from someone who attended. But if only 5% (or less) of startups are suitable for VC funding why don’t we focus on helping the other 95%?

  • Enough Pitch Coaching Already! (Or Not) | KillerBlog says:

    […] Raymond posted a very interesting article about why he thinks startup owners don’t need any more pitch coaching, and I would like to take a moment and give my two […]

  • Mark MacLeod says:

    There is an over emphasis on pitching. I think it is assumed that all the elements are in place (great tech, team, biz model, etc) and that all that’s needed is a way to condense your great story into pitch format.

    It is true that pitching is important. VCs are in the business of saying ‘no’. They see too many deals (here in Canada, every VC sees every deal). Still, VCs will listen to a sub-par pitch is there is real meat behind it. That is where the emphasis should be for entrepreneurs – building the steak, not the sizzle.

  • Dave says:

    Mark and Ray,

    You amplify the sizzle as much as you want, but if there’s no steak, there won’t be any sizzle. In trying to work on the pitch with coaches, often what happens is you figure out (as the coach and, hopefully, as the entrepreneur) that there is no substance (or at least a missing part). The key is to not then cover it up for the pitch, but to instead work on the business.

    The reason many folks should do pitch coaching is that it is another set of eyes on the business. Far too many people take ideas much too far without bouncing them off someone else – particularly someone who has no issues with giving you a harsh, if not somewhat rudely worded, opinion (ie. someone other than your business partner).

    Pitch coaching has its place, but is overdone because it is easy to implement and then say you’ve done something. Real business/leadership/etc coaching is a long term solution that is “messy” and doesn’t produce nice results for funding bodies/sponsors (we helped 10 entrepreneurs an hour for 3 hours on Monday – see, we’re done).

    Cheers from the west!

  • raymond says:

    Thanks for the comments Mark, Dave,

    I think you both hit the nail on the head. There’s nothing wrong with startup coaching and in fact it’s something we’d all like to see a lot more of. We need more real hands-on help for all of the issues facing new ventures. Pitch coaching is just one aspect of it (for the subset of ventures trying to raise money) but it’s time “real coaching” got a bit more attention, especially at events. As Dave said, this is harder to quickly with soundbites…

  • Ben Yoskovitz says:

    It’s easier to do pitch coaching than it is to say, “Your business sucks and will fail, go home.”

    I’ve been through a fair amount of pitch coaching, from some of the best, and it has helped me a great deal. It’s helped me think about the business, it’s given me the confidence I needed to stand in front of 50 people and convince them to give me money.

    What strikes me with pitch coaching is that even though so much of it is provided, pitches aren’t getting that much better. And I do believe that if the pitches were stronger, more companies would get funded. Maybe I’m wrong, but I really think that’s true. It wouldn’t be some massive change – i.e. we’re not going to go from 5% invested in to 50% … but it would make a difference.

    To me a good pitch is just one of those fundamentals you need to raise venture capital. Simple as that.

  • raymond says:

    I think you summed it up perfectly in your last sentence Ben. Pitch coaching is *one* of the fundamentals. There are others too. It’s especially important if you want to raise venture capital. If you don’t, you may benefit from lots of other kinds of coaching out there.

The comments are now closed.