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July 23, 2019
Over the past 12 months I’ve been a judge at five pitch slams at various industry events. The best pitch slam pitches I’ve seen share a few key common characteristics.
First and foremost, investors invest in people, not companies. I’ve found investors like me generally gravitate towards people who are genuine, authentic, have grit, are confident but not arrogant, are collaborative, can be coached, and have a likable personality. We need to be able to see ourselves working alongside the founders (and enjoying it!) for a long time.
In addition, the founders need to be backable. How I define backable is that the founders have relevant or notable experience and that they’ll be good stewards of our capital. We need to believe that founders won’t just be good early stage entrepreneurs during uncertain times, but they’ll become great C-level leaders who can hire, manage and retain top talent. We need to have a belief that a given team is the team that will win.
We have to like the product or believe that a lot of people will like it. In order to know that to be true, we need to sample the product. It’s surprising how many companies don’t bring samples with them to pitch slams or in-person investor meetings.
Separate from that, we have to believe there is a need in the market for the product. We also have to believe there’s a strong value proposition of the brand and be able to easily identify what makes it unique. The best pitches clearly and succinctly articulate these points.
With any product, investors want to know that a big market either currently exists or will exist in the future. We define big as several billion in market size.
In addition, investors want to understand the competitive dynamics in the market. What is the company’s positioning and how will it outmaneuver competition? Pitches that address these topics will have a higher degree of success at pitch competitions.
While most businesses who pitch at pitch slams are very early stage with minimal financial history, judges and investors want to see that the business is viable financially over the long run. That generally means an adequate gross margin or a clear path to an adequate margin.
The revenue projections also need to be believable. As a pitch slam judge, I’ve seen projections that are completely unrealistic, projections that are way too low, and everything in between. Growth needs to be believable and it needs to be logical.
I’ve generally seen companies that have some level of traction perform better at pitch slams. Traction could mean acceptance by retailers, it could mean direct customer sales, or it could mean future customer commitments. Either way, showing that customers clearly want a product will dramatically help that company be successful in a pitch competition.
Luke Vernon is a managing partner of Boulder-based Ridgeline Ventures an investment firm in healthy living and active lifestyle companies. Luke is an operator-turned-investor, having grown a company as the COO to $80M before it was acquired. Luke is an advisor and investor in several companies and he also founded Luke's Circle which helps emerging companies find top talent.
Managing Partner, Ridgeline Ventures
Luke Vernon is a Managing Partner of Boulder-based Ridgeline Ventures, an investment firm in healthy living companies. Ridgeline Ventures has invested in companies like Bobo's Oat Bars, Beanfields, Bonafide Provisions, NOKA Organics, Cotopaxi, and others. He's an operator-turned-investor, having led Eco-Products from under $1M in revenue to $80M before it was acquired. Luke has advised and founded several other companies, including Luke's Circle which helps emerging companies find top talent.
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