Words of Wisdom from the Notre Dame 2013 Business Plan Competition
In April, I was privileged to join the judges panel for the McCloskey Business Plan Competition at the University of Notre Dame. Having participated in the competition three times in the past, it was exciting to sit on the other side of the table.
Twelve teams pitched everything from a mobile app that can test for concussions to a cancer cure for dogs to a recycling factory in Haiti. There was a wonderful mixture of self-identified social businesses and traditional businesses, though all incorporated some degree of corporate social responsibility. In particular, I was incredibly impressed by Green Bridge Growers‘ business and excellent pitch. GBG had a model with strong validation and huge social impact potential for a highly marginalized group of individuals. I was very happy to see the team take away numerous awards, which should give them the resources to implement the next stage of growth.
From my perspective as a judge, I wanted to share a few bits of advice based on common mistakes:
- Know Your Audience – Most competitions pull judges from the angel investor alumni networks and associated university professors. There will be a diverse array of talented investors that have seen thousands of plans and pitches in all sectors. More importantly, you’ll undoubtedly encounter a few who specialize in med tech investments, for example. Due research on your industry and how the investment process works therein. If your valuation, go-to-market strategy, or other key areas are too generic, a judge will call you out on it and question your ability to build the business.
- Know Your Industry – Two teams were almost written off simply because they overlooked simple regulatory requirements. If your product has the slightest chance of needing FDA approval, mention your strategy on how to manage this process as well as any official legal or regulatory advice you have received.
- Context Matters – If you’re pitching a business in a country that has a reputation (deserved or otherwise) for conflict or corruption, make sure you address this. With international businesses, judges immediately will create a barrier based on their real or imagined risk assessment of the context.
- Know Your Financials – The two most cringe-worthy moments I can recall were when entrepreneurs were unable to answer basic questions about their revenue model or financial projections. If you aren’t an expert, make sure your finance guy is around to take the question. Regardless, though, you should know your key drivers and assumptions.
- Make Sure Your Financials Work – By this I mean, why would I invest in a business that nets a negative ROI after seven years? Your model clearly doesn’t work or you haven’t explained it properly (e.g. we are in the oil industry and it will take 20 years for you to get the investment back).
- Run Sensitivities – The best team had run numerous pricing and cost structure sensitivities, giving them ample ammunition to fire back at judges when questions about their key assumptions. Not only was this impressive, but it also showcased the team’s talent and due diligence.
- You Don’t Need Ten People on Stage – Some teams spent the first two minutes of their presentation introducing the extended team. The eight members that did not speak during the presentation looked exceptionally awkward as the two leaders rushed through the material. Having your whole team on stage and jumping between different speakers doesn’t show that you function well as a team. It simply sounds disjointed. Do your presentation and then invite other key members up during the Q&A to address specific questions.
- It’s Okay to Have a Token Student – We know that you need a Notre Dame connection to join the competition. But don’t pretend that the undergraduate helping you for 4 months is going to quit school and become the CFO of your company in San Diego. I joined the PEPY Tours business plan team as an undergrad, contributing arguably very little. But this experience was invaluable for me personally and professionally. As a judge, I am happy you’re giving someone an opportunity to contribute and learn – don’t oversell it though.
- Practice – We can tell. I can’t remember where I read it (perhaps Art of the Start by Guy Kawasaki), but I remember being told that you have to practice your presentation at least 25 times in front of different individuals before you have it down. Many presentations were rushed, because teams stuffed too much material into one section. Frameri, an ND MBA team, was absolutely the best presentation from slide design to timing to body language. I hope someone taped it to show to future participants.
- Take a Breath and Be Polite – You can tell a lot about a leader by how they respond to a good, critical question. More than a few individuals were quick to respond to valid questions with disdain or annoyance. No question is stupid when the judge in question might be cutting you a check that night over a burrito.
- 1% is Hard – Guy Kawasaki said it best: “Start-ups always make mistakes relying on top-down analysis: There are 300 million Americans, one in four owns a dog, ergo 75 million dogs, each dog eats two cans of dog food per day, ergo 150 million cans are consumed per day. How hard can it be to get, worst case, 1% of this market or 1.5 million cans per day. Problem is you are looking at the wrong metrics AND getting just 1% is damn hard.” Do a bottom-up analysis focusing on what you can track and drive. This will be far more useful to your operationally.
- Don’t Pretend to be “Social” – Other VC judges might not see through it, but I surely will. Social entrepreneurship is all the buzz and nothing makes me more angry that more talkers. We need doers. Just because you donate a pitiful 1% of profits does not mean you are solving any major social issue or market inequality.
- Make Sure Your Are Building a Company – There were a few teams that had excellent products. However, they didn’t have or articulate a vision to turn that product innovation into a sustainable company. What’s next? What kind of investment in R&D will it take? Who do you need to do it?
- No Green – Please – never, ever use lime green in your presentation.
- Know Your Competitors – There were a few awkward moments when judges used their phones to identify competitors that teams failed to mentioned. If you aren’t a first-mover, that’s okay. Absolutely don’t leave details out of the presentation to “strengthen” your pitch. We’ll find out.
- Bring a Sample or MVP – If we can touch, feel, and/or taste it, we’ll better understand it. For apps and software, take us through an interactive wireframe mockup. The Indiana Whiskey, Co.’s sample bottles (though containing Jim Bean since their first batch wasn’t done yet) were a memorable addition to the venture fair.
~ by responsiblenomad on June 22, 2013.