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Confidence in pitching tech products?

In 1965, their first release as The Who, “I can’t explain”, featured the lines “I feel hot and cold (Can't explain) Yeah, down in my soul, yeah (Can't explain)”. Watching programmes such as Dragon’s Den it’s painfully clear that many new business start-ups often struggle to understand their numbers and present them well. Admittedly it makes good television to watch the would-be business partners getting grilled on why they think their business is worth £4 million at the end of year 2.

You may be thinking that only the “rubbish” business start-ups don’t know their numbers and that they deserve to be shown up. But I remember Levi Roots being questioned on his Dragons Den pitch about a contract he had for his Reggae Reggae Sauce and being unable to articulate the response. He was even prepared enough to bring a copy of the contract for inspection but had not fully understood what it meant and what he had contracted for. There was a very tense moment where the audience were not sure if this was going to be a deal breaker. Fortunately, Peter Jones and Richard Farleigh saw enough to invest and help his sauce make it to shops (and become a staple in my household - adding music to my Sunday Roast ever since!).

What could Levi have done differently? He’d clearly come thinking he was fully prepared – he had a product that was sold locally, he had his guitar and sang the jingle to his product, he even had a contract in place to supply significant quantities of the product, yet it became a little bit of a hand in mouth moment when the Dragons drilled down on his business plan.

Had he come to me ahead of the pitch, I would have advised he fully understands his numbers, knows fully what he wants as an investment and what he will do with the investment, knows fully what his business projections are based on the contract in place and ultimately be able to explain key financials and be able to explain how he arrived at the price for the shares. 

No doubt Levi, like a lot of start-ups, would want to save costs and at this point might spend some time on google and try to put together a list of those key numbers. But would he understand them? Would he be able to flex them in a meeting and still get them, right? Based on the responses to some questions from the Dragons on pitches, probably not! At times it is painful watching a pitch where someone wants £100k for 5% of the shares in a business with a 3% gross margin, no remuneration for the owners and where the business will break even at best!

The next steps

You may not be pitching on national television, but at some point, will almost certainly pitch to a bank or other investors. So, what could you do to be prepared? Well, as experienced advisors, all of us at the UHY technology group are able to help you put together a clear and concise business plan with realistic profit and cash flow need projections. We can spend time with you helping you to understand fully what they all mean and what a change in one variable might do to them. We can even set up a practice session for you to pitch to us and give you some feedback on areas to work on to make the final pitch as professional as possible to give you the best chance of realising your aspiration.  

Whatever stage of the new product cycle you are at, we at UHY can definitely help. If you asked me to recite the technical details of your new product, I am pretty sure my response would be I can’t explain. What I can explain though, is what the numbers mean so you’re fully prepared for that pitch. 

Let's talk! Send an enquiry to your local UHY expert.