Tag: The Pitch

Thinking like both a business owner and a venture capitalist – and how it affects a pitch

What’s all the fuss about? I said yes, I’d invest. Okay, it’s the first time since I started hearing pitches on BNN’s The Pitch. “What’s so special about Neil Raj’s pitch for AdCommunal?” over 10 of you asked me by email. Let’s work through it.

The business owner perspective

When I appear on the show, I’m wearing two hats – one as a business owner and one as a venture capitalist. From a business owner perspective, I was not sold on AdCommunal’s value proposition for delivering leads. As a business owner, I want sales, not leads. John Varghese (VentureLink Funds) and I sparred in a friendly way over this perspective. Sales contribute to “top line” revenue. Leads might, but there’s no guarantee a lead will become a customer. Want cash flow? Focus on sales, or conversions, as we say in the online business world.

The venture capitalist perspective

From a venture capitalist perspective, I loved AdCommunal’s business model. Here’s what stood out for me:

1.       Neil Raj has credibility – he’s worked in the online adverting world and some of his previous employer companies were sold for multi-millions.

2.       Neil Raj is smart and articulate – he nailed his answers on the show (okay, his answers cut into my airtime, but I’ll forgive him).

3.       Pay-for-performance models of online advertising are taking over traditional “you pay us a fortune, and we may deliver conversions for you” models – so AdCommunal is early stage in the life cycle.

4.       Huge growth potential.

5.       Exit opportunity – AdCommunal could be built for an early and lucrative exit – for Neil and his investors.

6.       AdCommunal is cash flow positive – and has been since day one posting $2.5 million in revenue for 2010.

So I said yes. Easy – subject to due diligence. I did raise a concern over Neil’s team. I want him to build a stronger, better known team with a track record.

Want to attract VC money? Build a business model that speaks to credibility, team, concept, growth and traction. I like saying yes.

Have no idea what I’m talking about? Watch the February 2 episode of The Pitch online for free on BNN’s website. Let me know what you think!

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Thoughts on The Pitch, proof of concept and small business scalability

Just back in Calgary from an appearance as a regular panelist on BNN’s The Pitch, a weekly live venture capital pitch show airing Wednesdays at 11:30am EST, 9:30am MST. If you didn’t catch the show, you can stream the January 12 videos from the BNN website.

This week’s pitchers, Warren MacKenzie (Weigh House) and Roger Nahas (Best Body Bootcamp) represented the diversity of the Canadian entrepreneur population. Warren wants to give investors a fighting chance at good rates of return in their portfolios by offering commission-free advice and wealth management services. Roger has built an Ontario-based fitness bootcamp business that he now wants to expand across Canada. Cool.

Different business models and concepts, but I had the same two issues with both businesses. My issues were scalability and proof of concept, both topics we cover in our online small business training.

Small business scalability

The first issue – scalability – refers to the ability of the existing business to grow, and I mean really grow, from one location to many, from one geographic area to several, from hundreds of customers to thousands of customers virtually overnight (which is why investors love technology companies).

Both Weigh House and Best Body Bootcamp need people to scale their businesses – wealth management consultants and excellent personal trainers – to hit a home run. To scale a business that relies on people as a critical factor is tougher to do. Not to say it won’t happen; it’ll be just be harder for Roger and Warren to attract VC money.

Small business proof of concept

The second issue I had with both businesses was “proof of concept,” or displaying a business model that has proven its ability to make revenue and profit. We teach the difference between a business model and a business plan in our online education for entrepreneurs, so if you want to know more you’ll have to buy the course! (I’m in business too!)

At what point is a concept “proven,” you ask? The point at which the new business has a steady supply of customers, returning customers, great customer evaluations and lots of opportunity to grow. And of course, different options for growth such as franchising, market or geographic expansion, international sales, new products, and so on.

Once a business concept is proven, and the ability to “scale” the business to greater revenue is there, you’ll have no problem attracting angel or venture capital investors to help you get there.  The trick is getting to the proof of concept stage. Remember, over half of small businesses don’t get to the second year – they fail before the concept proof stage. Sad.

But then, that’s why we created GoForth – to give the emerging entrepreneur 100 Essential Small Business Skills to help them through start-up and early growth stages of any business – construction and trades, real estate agents, artists, coffee shop owners, dog walkers.  If you’re a small business owner, we can help you succeed.

If you’ve got a great early-stage business and want to appear on The Pitch, shoot me an email!

PS. A little backstory – at the end of the show I mentioned that I was “a little bit of an alley cat” on one of the ideas.  That was a secret shout out to four of my all time favourite University of Calgary students, Allison Onyett (Ally) , Catharine McMechan (Cat), Jalene Ippolito and Heather Baker who I had the pleasure of teaching when I was still an entrepreneurship professor. Today, they are no longer former students, but are friends of mine, and I’m grateful for their love and support.

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BNN’s The Pitch helps entrepreneurs both on and off-camera

Hope you enjoyed Wednesday’s episode of The Pitch on BNN, which marked my second appearance as a panelist on the show and the first The Pitch show taped at BNN’s very cool new studios in Toronto. The set is brand new and everyone was getting used to camera angles, lighting, sound, new microphones, places and marks (where we, the panelists and the two pitchers stand). A little bit of a learning curve behind the scenes – but a really great show.

The two pitchers were well prepared, well-rehearsed and had some serious passion goin’ on in their pitches. I like to see confident people behind a company – their confidence helps to instill my confidence in their business and their plans moving forward. However, that doesn’t stop any of us on the panel from pointing out the gaps I found in their business models or strategic plans going forward. See my comments to each of them at the end of the show in segment three (look for the videos marked December 8).

It doesn’t end there, though. The pitchers only get 90 seconds to make their pitch, and a short amount of time to answer questions on-air. But after the show wraps, I like to hang around in the green room and debrief the pitchers – how they thought it went, or if they had any questions about what went down on the show. We usually agree to a follow-up Skype or phone chat so that I can offer some guidance to help them work through some of the issues that are raised by me or the other panelists. That’s one of the fun parts of the show for me – working one on one with the pitch companies after the show is over. I also enjoy the emails I get after a show from the BNN audience at home – the armchair venture capitalists who want to weigh in with their opinions.

If you haven’t watched The Pitch, watch it. It’s real, not entertainment. We have a genuine interest in helping the pitchers succeed, and this extends off the air to what goes on behind the scenes.

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Behind the scenes as a panelist on BNN’s The Pitch

I’ve been asked how I prepare for my appearances as a panelist on BNN’s new show The Pitch.  There’s nothing like a live national television show on the most respected business news network in Canada to motivate me to do some homework!  I have the regular “do I have broccoli in my teeth” fear of appearing on national television, but I also fear not being able to help move the pitcher’s business forward – even just one small step.

So, the week before each show, the producers give me a one-page outline of the pitcher and his/her company. From there, it’s up to each panelist to prepare for the show as they see fit. My approach is to learn the pitchers’ businesses well – understand their business model, revenue model, competition, key differentiating feature and unique selling proposition (that secret sauce or element that makes them so special), addressable market – all the usual.

Having taught MBA courses in strategy as a professor in my former life, I know the points of analysis, but the trick is to prioritize my questions for the pitchers – knowing that the other panelists are likely to drill down in the same places. My background in market research makes me gravitate toward the market, addressable market and marketing research foundations of their business plans. To me, all good things come from our customers – sales and revenue (obviously), testimonials and word of mouth advertising, but also great product ideas.  I like to see proof the pitchers are engaged and listening to their customers.

Hats off to BNN for creating a great show! My next appearance is this coming Wednesday, December 8. The show airs at 11.30am ET/8.30 am PT, but it’s available online very soon after it airs. Tune in next week and see which pitch makes the cut. And if you’d like to be on the show yourself and pitch your ideas to an expert panel of businesspeople and financiers, email us!

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