9.2.2 General Theory
For the final module of the MOOC Entrepreneurship, we have a few suggested readings and provide you with some tips regarding the video pitch presentation and give you some background material for starting your business.
- Eisenmann, T. R. (2013). ‘Entrepreneurship: A Working Definition’. Harvard Business Review: January 2013, https://hbr.org/2013/01/what-is-entrepreneurship
- ‘How Venture Capitalists Really Assess a Pitch’. Harvard Business Review: May–June 2017, Issue https://hbr.org/2017/05/how-venture-capitalists-really-assess-a-pitch
There are many tips, and we would like to mention a few in addition to the ‘who cares’ and ‘why you’ arguments.
Presenting yourself and the team. Although people may have different opinions, it is often not needed to introduce the team at the very beginning. Although they put high value on you and the team, in the first instance it is better to start strong and draw your audience into your pitch presentation. Then, after explaining the problem and offer you can mention your name. In the end of your pitch presentation, it would be good to show the offer again and explain the team that can make it happen.
Drawing attention in the beginning is key, make them enthusiastic, show your passion and make sure they immediately understand what you do. In many cases it helps to create a sense of urgency. What is the problem at stake, why is it a problem, what are the negative effects of the present solution and what is the solution you offer to mitigate these problems. Make sure you explain that your offer is a need to have, and not a nice to have. Thus, explain in simple words what your offer is and why it is relevant. Make sure people do understand your offer, recognise the situation you present. Making it recognisable by using a picture or illustration helps a lot.
Many suggestions about pitch presentation emphasize your posture, how to walk, to talk, look at the investors and how to handle questions etc. This is important, especially to get in contact with your investors. But to do so it is important to also prepare the pitch in terms of who is my audience, what do they know, what is their interest and what do they value. Make sure your message resonates with his/ her interests. Thus avoid difficult or specific technical terms but show the situation in which it is used.
Evidence is key for investors. You can present the evidence by showing how you did get in contact with your target customer, what specific responses you got from the talks with the target customer. Also the ownership of technological expertise is important. If you own the technology or key knowledge then it is key to explain the protection of the intellectual property. If you draw on the technology of others, you need to able to explain the licensing deal or the type of collaboration you intend to have.
Showing you offer, the product or how the service works is important to have the investors understand what you do. However, do not talk endlessly about the details of your product or technology. The investors are not interested in the technology or product as such. They care about the need in the market and how to generate money on that. Thus presenting realistic cash-flow projections is key.
Cash-flow projections, how realistic you try to develop them, they are based on assumptions. Therefore, it is more important to understand the accuracy of the assumptions and the effect of small differences on the initial years of your cash-flow. Making long term cash flow projections is regarded as a simple spreadsheet exercise, but showing the break-even point, the payback period and the amount of investment you need is important. Hope these tips help and more are to found on the following websites:
Other background material
If you have arrived at some great insights about the market opportunity the next important step is to put your commitment to it. Two types of commitment can be put into it. The first is that of money. If you put your own money into it, then it shows your commitment and belief in the success of the opportunity. Also by putting your own money, your savings, or some collateral such as your house, it shows you will do anything to make it a success. The second type of commitment is time. You need to show you spend considerable time into getting the idea started. For instance, when you say: I have a start-up and I work on it every Friday afternoon, it probable does not convince many people you are serious. The third type of commitment comes from making things more formal. Although a true entrepreneur will act on the opportunity, before getting all administrative tasks and resources in place (remember the definition of Entrepreneurship by Stevenson ), it shows some commitment if you explored the legal and formal avenue to get your start-up founded. Also governments do provide some financial support for technology-based start-ups. This may differ strongly from one country to another, but we can provide you with some information when it comes to the Netherlands, the home country of the universities that provided you this MOOC.
Formal and legal requirements to get started: http://english.rvo.nl/starting-a-business
Funding opportunities to get started: http://english.rvo.nl/topics/innovation/startup-box-funding-innovative-starters
Entrepreneurship for Engineers/ by TU Delft OpenCourseWare is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Based on a work at https://ocw.tudelft.nl/courses/entrepreneurship-for-engineers/.