The team and I have really enjoyed the awesome flow of pitches we’ve heard for the Atlanta Ventures Accelerator. There are some brilliant people in Atlanta thinking about the right things. It’s inspiring and motivating. That’s not to say we haven’t seen some issues. Here are some themes that we’ve seen in hopes that when you are pitching to any investor, you can learn from some of these mistakes.
Regarding your idea: the single most important factor about an idea is the Vitamin vs Painkiller index.
This is where we spend 95% of the time evaluating ideas. We need to find that it is a true painkiller for somebody. You are solving a problem that is holding people back and they know it and they need a solution. We can’t afford to be in the business of teaching people they have problems so that we can solve them. We want to sell strong ibuprofen to really achy people.
KIS,S. Don’t do an ecosystem.
Oh buddy, these just make me tired. Many startups think they can build an ecosystem with dozens of inputs and outputs. On example we see a ton of is Loyalty startups. It’s cool if you want to solve a pain around loyalty for merchants, but don’t try to create a new currency that every consumer on the planet will use, merchants will trade and see value in it, and the back-end systems look a little more complex that American Express. Simplicity is key. Get traction, then build your ecosystem around it.
Openness to feedback as an indicator.
When companies are accepted into our accelerator the primary value they will receive is the mentor introductions. One indicator of a good fit is how well the entrepreneurs respond to feedback and input on their idea. We don’t expect you to agree with our ideas and suggestions but fiercely debating that we are wrong for suggesting something is an indicator that perhaps you won’t get the maximum value from the mentors who will be trying to help you.
Really, really hard to scale.
This is a tough one because even if you’re on to something and have a great painkiller for some, but will need a LOT of capital (both money and human) to grow the business, it’s hard for us to get excited about it. With so many capital efficient startups, our tendency will be to avoid the capital-intensive beasts. There’s a need for that in the startup market, it’s just not our game.
Confidence is good, but don’t act like you don’t need any help.
It’s a fine line between confident and arrogant. Enough said.
Existing business and not hungry enough on the new business.
Believe it or not, we’ve had a good handful of entrepreneurs with an existing business that is doing well and they want to start something new. I fully believe these entrepreneurs have the best shot at success, but only if there are motivated full-time team members on each company. Trying to keep multiple companies going (especially when one is a startup) without a full-time CEO in each one is next to impossible. Also, entrepreneurs are just like anyone else and will be loyal to the paycheck. The company that pays the bills will always get the most attention… and if attention is subtracted, bad things can happen too easily.
Saturated market with no clear advantage.
If you’re going into a crowded space, you need to demonstrate a very clear advantage. Saying that you will figure it out once you get in, doesn’t work. You need to choose PRICE, QUALITY, or SERVICE as a competitive advantage and put each competitor in one of those buckets. Know HOW to attack the market.
Research at least a little, and READ, dammit.
C’mon guys. The info you need to make a great pitch is out there. HINT: Atlanta Ventures is backed by an influential investor who is really, really, REALLY transparent and super high-profile. When you come in and haven’t heard of him and haven’t read a single of his 1,500+ blog posts about what makes a good startup, honestly: you don’t have a chance. HINT #2: It’s not ME! Last point: read the basic logistics about your pitch. Know what is expected from technology, know how much time you have and manage it correctly, show up on time, just read the instructions. Simple.
I don’t believe we are all that different from other investors. Hopefully these tips will help you go in armed and dangerous for every pitch.