Perfect pitch: How to raise money for your startup
Startups not only got to pitch to and network with potential investors at Ecosummit Berlin 2017, they also got some valuable lessons on how to do it right. Leonie Baneke from Eneco Smart Energy gets sent lots of startup pitch decks, asking her for capital. This is the second year in a row Eneco has sponsored Ecosummit and Baneke says, they were part of the event since the beginning of their corporate venturing activities to look for cool and challenging ideas to invest in. The Dutch have money to spend, allocating 10 to 30 million euros per year to invest in external startups, follow-on investments and internal startups.
Leonie Baneke from Eneco says the corporate VC invests in companies with which they click
“The big problem for startups is to explain what they do on a level that makes sense,” Baneke says. “Sometimes, you have a real techie guy who goes so much into detail that I am lost after the first page. And on the flipside, they don’t know how to market it. You get an idea that sounds awesome, but after reading it, you have still no clue what they are doing. But I need to understand it before I invest.” Baneke prefers the elevator pitch and sees Ecosummit as perfect practice. “After five minutes, I need to be triggered, I need to be enthusiastic, and I need to have some understanding or idea of what you are doing. And that is a lot harder than people think.”
You have to start with why, Alisa Murphy from Life Size Media told startups. “It doesn’t matter if you break your performance barrier. In this business, you have to give people something to believe in,” she continued. “Some of it may be quite geeky. But the good news is geeky is the new sexy.” Startups need to get their heads out of the details and start telling better stories. They need to give their motivation for why they are doing what they are doing, because, Murphy added, “people are looking at the team running the company just as much as the company itself.”
Konstantin Hanssen, Key Account Manager Energy & Optics at Investitionsbank Berlin, summed it up in one sentence: “Tell it to me like you would tell it to your grandma.” Bankers or investors are not engineers which is why startups can skip much of the technical details. Instead, Hanssen says, they should focus on the benefit from a customer’s point of view – not their own.
Startups not only got counsel from investors. Pilgrim Beart, CEO of DevicePilot, also had some advice to give. This is his third startup and looking back at when he started out, he points out that it is good to get “someone with grey hair to join the team,” someone who already knows what mistakes not to make. He also urged startups not to see investors just as cash machines. “You need to have an honest relationship with your investor. I have seen too many times that things go wrong right at the beginning, because the entrepreneur oversells their proposition and the investors don’t really believe it and that is not the recipe for a great relationship.”
In summary, when pitching an idea startups need to wow and woo investors with why they are doing what they are doing – and not bore them with details. Those can be discussed once the interest was sparked. According to Leonie Baneke there were several interesting presentations at this year’s Ecosummit Berlin. She will definitely give one or the other startup a call to talk partnership.
Tags: Alisa Murphy, Corporate VC, Corporate Venturing, DevicePilot, ECO17 Berlin, Ecosummit Berlin 2017, Eneco Smart Energy, Fundraising, IBB, Investitionsbank Berlin, Konstantin Hanssen, Leonie Baneke, Life Size Media, Pilgrim Beart, Pitch Deck, Smart Green Corporate VC, Smart Green Investors, Smart Green Startups, Startup Pitch, Venture Capital