How to successfully pitch business ideas

Entrepreneurship may be instinctive, but presenting to venture capitalists benefits from rehearsal, says Nic Paton
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The Independent Online

As Pierre Mainil, 42, was trying to raise £1.3m for his new research business, Allevia, one of the venture capitalists dropped out of contact at a crucial juncture.

Luckily Mainil, a former pathology professor, had encountered a similar situation in an exercise at London Business School while taking his MBA.

"We told them if they wanted to invest in the company we needed to get feedback, otherwise we could not recommend a proposal to the board. Twenty five minutes later we got the proposal," he recalls. "The MBA gave me some perspective on the process of raising money."

An MBA used to be seen as a way of fast-tracking your career, particularly if you wanted to make it big in banking, finance or management consultancy. It still can do this but, increasingly, it is also the first port of call for the would-be entrepreneur looking to strike out and start his or her own business.

"Last year I'd say of our intake, 70 per cent were interested in starting up a business. That is a major shift," points out Fiona Reid, director of entrepreneurship at Oxford's Saïd Business School.

At first glance, this is a curious trend. Some of the world's most famous entrepreneurs - Richard Branson, Anita Roddick, Alan Sugar to name but a few - never went to business school to learn their trade, and it did them no harm. In fact, it is a moot point whether entrepreneurialism - that willingness to risk everything, grab opportunities and be a bit of a maverick - is something that can even be taught.

"If you toss enough people in, the convergence of all the variables says that someone will come out of it at the end successful," says Stephen Spinelli, vice-provost for entrepreneurship at Babson in the US, one of a growing number of business schools on both sides of the Atlantic with a strong record in entrepreneurship. "But we can expose people both to the processes and the skills that are manifestly part of that behaviour."

Along with developing (and taking apart) the business plan, a key element of any good entrepreneurial MBA programme is getting people confident at the business pitch, argues Saïd's Reid. "Nowadays so much presentation is performance. There is an enormous amount of presentation - to potential investors, bank managers and so on; all the people you need to help you to make it work," she says.

For the past three years Saïd students have taken part in an Idea Idol competition, modelled on TV's Pop Idol. Last year's competition saw 80 entries whittled down to eight finalists (see below).

Babson, similarly, drills its students in a three-minute "rocket pitch", an extension of the traditional "elevator pitch" so beloved of careers counsellors. "You have to test the hook very quickly; you have to be incredibly succinct. And we get them to go through the thought process fairly frequently," says Spinelli.

The popularity of TV's Dragons' Den has had a major impact in the UK. At Henley Management College, students do a one-minute pitch to a panel that includes TV dragons Duncan Bannatyne and Peter Jones.

At London's Cass Business School, students form teams and pitch business plans to venture capitalists. Similarly, London Business School runs an entrepreneurial summer school where students make presentations to real potential investors.

The big corporates who sponsor so many students are, perhaps surprisingly, right behind this focus on entrepreneurialism, argues Professor John Mullins, chair of the entrepreneurship faculty at LBS. The thinking is that, while they could lose people down the line, they may also get to tap into the drive and innovation that comes from someone with an entrepreneurial mindset.

Other schools approach the practicalities of learning to pitch in a literal way. Students at the International University of Monaco, for instance, have to do their two-minute pitch in an elevator.

The cramped environment adds more stress and is more memorable, explains associate dean Dr William Lightfoot. "We had a situation recently when a students was in the middle of making their pitch and a group of other students entered the elevator laughing and speaking loudly," he recalls.

"The elevator was already full and, with the extra weight, would not move. We stood there for about 30 seconds arguing over who would leave so we could be on our way. Despite this, the student stayed focused and managed to deliver his pitch flawlessly."

'It was terrifying, exhilarating but fun. I gained a lot of confidence'

Jennifer Segal, 25, was a winner of last year's Ideal Idol competition at Saïd Business School and is now in the process of launching a company making and selling designer plaster casts for adults and children.

I had to stand up in front of the panel of VCs and do my elevator pitch before a gong went off after two minutes. The panel had 10 minutes to grill me, so it was all about presentation and defence rather than just submitting an idea.

It was terrifying, exhilarating but fun. I gained a lot of confidence in my ability to present and defend my idea.

You can have a wonderful idea but you need to apply a rigorous process to it and see if it can make any money, and that's where an MBA can really help.

I won £5,000 from Idea Idol. I have put in some of my own money and have people who have expressed interest in putting in money too. I want to start it as a lifestyle business and build it from there.

A good singer may be born with raw talent but still has to be trained. It is the same kind of thing for entrepreneurs. You have to have a certain spirit, a phoenix rising from the ashes type of mentality.