Pitch Club has been operating in one form or another since 2005, and in its current incarnation since 2007.
Last week, we kicked off our 2011 calender in Melbourne, as the first of many events planned for throughout the year.
At the end of last week’s pitching session, I came away with the following five lessons and observations:
1. There is definite value in pitching unprepared.
One of the pitchers on the night had not pitched before. You could tell he was hungry to get in front of the crowd and tell his story.
This is because few of us ever get the opportunity to have our ideas challenged.
We sit in the dark trying to iterate and obliterate the risk.
But until we gather the courage to bounce our ideas off someone else, who doesn’t know us, our objectives and plans are rarely realistic.
2. Entrepreneurs sometimes misunderstand questions from an investor.
The investor’s question normally relates to return potential, and risk.
In most cases, and again on Thursday night, entrepreneurs respond by talking up the product features.
Features do not offset risk, and say nothing about the potential return.
3. It’s a great idea to form a support group.
Mothers have them, who give birth to babies. Why don’t entrepreneurs, who give birth to ideas?
A weekly or fortnightly get together with a group of people who you trust and can share your journey with is a great idea, even over skype if necessary.
There’s safety in numbers, yes?
4. Investors don’t do debt.
I am always amazed that aspiring entrepreneurs so often offer to take someone’s money in return for interest only and no equity.
That is what a bank does, or a loan shark. Investors want an upside in case you make it big.
5. In a startup with two or more founders, keep it simple.
For nascent ventures, 50/50 is simple and best.
Anything else is naïve and ill considered and forces you to value something that really has no value. It also creates animosity and distrust.
Place any investment by the founders into the business as a convertible note (debt that can become equity). Have some faith in yourself, and trust those you have chosen to go on the journey with.
Don’t get paranoid, have fun and don’t forget what’s important, health, family, friendship… stuff like that!
See yaz all in Hobart, March the 17th!
Peter Christo is a serial entrepreneur who has started over six businesses in an array of industries, including technology, consulting and hospitality. He also holds a Bachelor degree in Economics and Marketing and a Masters of Entrepreneurship and Innovation. He lectures at RMIT University. www.pitchclub.com.