Is a person’s common sense inversely related with their attention to detail or their stress level? Have you ever met a financial guru whose complex financial model simply didn’t make sense or doesn’t take into account questions that start with “What if … ”? Well if you haven’t, just take a walk along Wall Street and you will meet plenty of them. You will also find entrepreneurs with PhDs in computer science or engineering struggling to raise capital for their disruptive new technology—of course everyone believes their product is one of a kind and will change the world. However, there are plenty of breakthrough innovations out there that never get enough VC attention because the masterminds behind them fail to clearly define their business. The reason for this could be that they were paying too much attention to the details and completely missing the big picture. The trick is finding the right balance between attention to detail and the big picture.
While I was working on my MBA in San Francisco I attended a lot of entrepreneurship and pitching events. I sat through hundreds of 2-3 minute pitches and I couldn’t help but notice that there was no shortage of brilliant entrepreneurs with astonishing backgrounds and who were very passionate about what they did. Yet when it came to pitching their ideas they underperformed. At the time, the sole purpose of my attendance was out of curiosity and to see if I could observe and detect—with an outsider’s eye—any generic patterns, and I did.
At the end of each pitch the judging panel or the investors would ask (sometimes complex) questions and allow the entrepreneur very little time to answer, often leaving them under tremendous pressure to give succinct, convincing, and well-articulated answers while maintaining the right attitude … and their poise.
I wrote down all the questions that were asked and the answers that were provided, both loved and hated. I also added other potential questions that I found through research to create a “FAQ Checklist.” I believe that this list could prove to be very helpful to entrepreneurs in their preparation for the big pitch day.
The big question still remains, what would make investors take out their checkbooks and write a check to a specific company? It ultimately boils down to whether they really believe in the idea and fall in love with it and the entrepreneur behind it.
The above checklist is one tool that would help prepare entrepreneurs for selling their ideas and also give them a 3D view of their business, which would enable them to locate and fix any blind spots they may have otherwise missed before pitching to others. However, making investors fall in love is the tricky part because—as we all know—there has to be a natural chemistry. But even if there isn’t, that doesn’t mean that you still can’t give it a try.