Finding the Perfect Pitch Part 1

This is your moment, and you’ll never have it again. What do you do to get ready? That’s the challenge facing 23 female entrepreneurs who have been selected to present their businesses before hundreds of VCs at an exclusive venture-capital forum. The cast of company builders is noteworthy for the number of early-stage entrepreneurs sporting Ph.D.’s and M.B.A.’s from Ivy League schools. But credentials aren’t enough to get an audience with VCs.

Author:Susan Greco
Source: Inc magazine

Enter stage right Springboard Enterprises, the nonprofit hosting the forum. Springboard aggressively recruits the best and brightest female entrepreneurs and gives them coaches galore. Ever since its first packed forum, in Silicon Valley in January 2000, Springboard has defied expectations. All told, nearly
40% of its graduates have raised in excess of $700 million from VCs and angels. This year Springboard
Enterprises is host of three VC forums and even more boot camps across the country.

So what does the nonprofit bring to the money hunt? Herewith, a backstage tour with three of
Springboard’s rising stars as they endure a grueling five-week "rehearsal" culminating in the VC forum
on November 9, 2001, and, they hope, a deal.

Act I: The Pitch

Scene I: Springboard boot camp, Babson College, Wellesley, Mass., October 5, 2001. Five weeks to
Springboard: New England 2001 Venture Capital Forum.

"Can we start over? Pleeeeeze!"

The video camera pans on a young woman struggling with her "lines." Wielding the camera is Kim
Marinucci, a "pitch coach" with long blond hair who stands patiently in her high heels. "Try to make it
through the 60 seconds without stopping," she says gently to the woman who is begging for another
chance. After two false starts, the woman completes one of the longest one-minute elevator pitches in
history and walks off mumbling, "I only got three hours of sleep."

But Marinucci offers her own aside: "It’s not a sleep problem, it’s a memorization problem. She cracks under pressure." Many entrepreneurs try to memorize their presentation, she says. Big mistake.

"Next!"

One after another, the 23 entrepreneurs come before the camera to make their pitch, some of them clasping notes on a napkin. But Shoba Purushothaman blows into the one-day boot camp laughing and smiling. Unlike the women who stumble over their feet, she seems to walk on a cloud of blustery
bravado. With her British accent and well-fitting suit, she exudes the air of someone who’s just stepped
off the Concorde, even though she’s actually driven herself in from New York City. You want me to talk
about my business for 60 seconds? Let’s go! Her megawatt smile lights up the room as she speaks about
her company. "The NewsMarket offers enterprises a software solution … that significantly simplifies the
process and reduces the cost of marketing and distributing video news to the media …," she says. Hard to know what her company does, exactly. But she makes it sound enticing.

Cheerful Lucy McQuilken, who has short brown hair and dimples, ends her videotaped elevator pitch by giving out her E-mail address.

A.G. Breitenstein breezes in for her close-up wearing a tight black T-shirt, no jacket, and one silver hoop
on her upper left ear, the whole look topped off by a head of orangy blond hair. She is so casual that
you’d never guess she dreads doing an impromptu pitch. "It’s like getting the test before you get a
chance to study," she says.

And most of the class flunks the test. Granted, 60 seconds isn’t much time for a student to explain the
size of her market, who her competitors are, and why investors should give her company millions. But
most of the entrepreneurs don’t even try. Instead, they wax poetic about their products. In short, there’s
a lot of work to be done before the women can represent their companies at the VC forum, where they
each will have 10 minutes to address an audience of probably 200 to 300 venture capitalists and angel
investors. It is Springboard’s mission to groom female entrepreneurs for this moment.

Springboard has chosen this class of 23 entrepreneurs from a pool of 150 applicants. The rules: the
women must hold a management position and a substantial equity stake in their business. It comes as a
shock to find that many of the 23 already have major angel backers. So it’s not a question of why they
want VC money; the only issue is how fast they can get their hands on it. Shoba, Lucy, and A.G. — as we
will refer to the stars of our story — seem to epitomize the new generation of aggressive female
entrepreneurs. All three want to build their start-up companies to $20 million in sales within three years
or less. They have the same fast-growth aspirations as their male managers and cofounders do.

Shoba, 39, is a walking oxymoron: an independent Indian woman who grew up in Malaysia, achieved the
American dream, and wants more. "I’m at Springboard to raise money, and I have nothing but the
highest expectations," she says. And yet she is also a humble bootstrapper. The NewsMarket, based in
New York City, is her second company. (It markets and distributes video clips over the Web for use by
TV stations. Clients include big corporations that want to get their name and news on TV.) She started
the first company with $1,500 and grew it to $7 million in sales before selling it in 2001. At boot camp, she
is among a few entrepreneurs with any substantial revenues — $404,000 in 2001.

A.G., 33, is in a league of her own. She’s a lawyer with a snake tattooed on her arm. She’s an avid jock
(snowboarding and biking) who graduated from Yale. And she was bored silly at UConn law school until
she found her calling: civil rights. As a young lawyer, A.G. took landlords to court for evicting AIDS
patients. She sued public officials for invasion of privacy. Her claim to fame: she drafted legislation that
served as a model for the new federal privacy regulations governing the use of medical data by hospitals
and insurance companies. She cofounded PrivaSource, in Waltham, Mass., to help health-care
companies buy and sell patient-level information while protecting patient privacy.

Lucy, 37, is the big-company graduate. She earned her stripes as an engineer and sales star at large
computer companies before taking the job of president at Chaoticom, in Hampton Falls, N.H. (The
start-up provides a technology platform for compressing and resynthesizing images, videos, and music
so that, for example, you can download a hot song to your cell phone inexpensively.) Her hope for
Springboard? That it will prompt the investors she’s been courting to "get off their butts and sign a
check."

"I thought nothing else was important but those 10 minutes."

But for Lucy, A.G., and Shoba, boot camp marks the start of an arduous journey with lots of risks and no
guaranteed rewards. The entrepreneurs can’t forget that they’re playing the VC game in a man’s world.
(The percentage of VC dollars flowing to female entrepreneurs is still paltry at 5%.) The women have just
five weeks to perfect their pitch and convince this world that they hold the next billion-dollar market
opportunity in the palm of their hand. All while running their companies.

At boot camp, Shoba, A.G., and Lucy each meet their main coaches, the people who will take the women
under their wings and spend long hours helping them craft a 10-minute presentation. "It’s an intense
getting-to-know-you process," says Amy Millman, president of Springboard Enterprises. The New
England forum is brimming with more than 100 volunteer VCs, bankers, lawyers, CPAs, executive
recruiters, successful entrepreneurs, and business consultants. (And that doesn’t count Springboard’s
network in Silicon Valley, Chicago, New York City, Dallas, and Washington, D.C.)

Springboard graduates like Jill Card are also on hand to provide their insights. Card, the founder and
chairman of IBEX Process Technology, has raised $6.8 million. Once painfully shy, she shares how she
finally overcame her stage fright. "The best advice I can give you is to imagine your audience naked —
300 venture capitalists naked."

Scene II: Coaching, McKinsey & Co. offices, October 19, 2001. Three weeks to the VC forum.

"You guys rock!" says A.G.

The young cofounder of PrivaSource is sitting in a plush conference room inside the hallowed halls of
the upper-crust Boston offices of McKinsey & Co., one of many Springboard sponsors that agreed to
loan out their highly paid employees for a block of time. On this day, for the first and perhaps only time,
more than a dozen of the Springboard women will receive 60 minutes of free tutoring from one of the
most highly regarded consulting firms in the world.

A.G. is on the edge of her seat. After weeks of crafting her presentation and cranking out slides, she
relishes this moment. The McKinsey consultants have been instructed to grade the entrepreneurs on
the content and length of their presentations, on the quality of their slides, and on style (pitch, pacing,
stance, body language, eye contact, and so on).

A.G. begins her pitch with an amusing anecdote showing how easy it is, with a little technology, to
figure out someone’s identity from supposedly private medical data. A cleverly created slide features the
faces of some well-known people and their fictional ailments. The slide and story serve to grab the
audience, providing a perfect segue into the entrepreneur’s explanation of her company’s solution to a
pressing problem.

"Your style is great, so I won’t mess with it," says McKinsey consultant Susan Mulder. A.G. is clearly
comfortable in her own skin. After all, few female entrepreneurs show up at McKinsey’s doorstep
wearing army green pants, a black turtleneck, and a concealed tattoo. But the nonconformist A.G. can’t
ignore all business conventions. Specifically, she is struggling with the question that vexes every
company founder that ever was: How big is my market, and what’s my slice of it?

Clearly, A.G. needs help shoring up her revenue model. Is it based on service fees or hardware or both?
Mulder and her McKinsey colleagues advise her to separate revenue streams and detail the
assumptions behind the sales numbers. She has never done any of that before.

After 60 minutes, A.G. emerges from McKinsey triumphant, with her own personal punch list: "work on
sales projections, be clear about target customer, include exit strategy, and talk more about my
background." She is elated, even if what she got was just a glimpse into the McKinsey mind. "An hour
of McKinsey time? I tend to be pretty cynical about these things, but I loved the process," she says
later.

Lucy, of Chaoticom, delights in her McKinsey moment, even though she gets trounced for discounting
one of her largest competitors: Microsoft. Hey, selling the company may be more valuable than an IPO,
the McKinsey folks point out. Lucy nods in agreement, soaking up every word. If she comes off as
cocky, perhaps it’s the salesperson in her coming out. "What I learned from McKinsey is, Don’t talk bad
about the competition," she says afterward. "Microsoft could be an acquirer down the road. They’re not
the total evil enemy — it’s good to have a rival."

Shoba gets her McKinsey coaching in New York. But she makes weekly trips to Boston to convene with
other advisers. A coach at Ernst & Young has even arranged for her to practice before half a dozen
venture capitalists and angel investors. She hears conflicting advice. The biggest debates revolve
around how much funding she should ask for — $2 million? $3 million? $5 million? — and how to begin
her presentation. As she hustles to incorporate one suggestion after another into her presentation, her
message becomes more convoluted. She scarcely recognizes her own pitch.

Shoba isn’t the only one making last-minute revisions. Recounting how many times she’s changed her
pitch, Lucy says, "I’m coming back around to where I started out."

Act II: The Dress Rehearsal

Scene I: Walk-through day, Boston law firm Testa, Hurwitz & Thibeault, October 24, 2001. Two weeks to
the VC forum.

"We’re not your coaches," Bob Franklin, an executive recruiter, says to Shoba. "You’ve got to get
focused!"

The words hit Shoba like a tidal wave. She and the other presenters have reported to a Boston law firm
to individually "defend" their presentations before a panel of 6 to 10 Springboard observers, including
VCs, executive coaches, consultants, and lawyers. The observers have received a few last-minute
special instructions. "Help them not sound too girlish. Better to sound like an ice queen," says one
Springboard manager.

Franklin has a reputation as Mr. Tough Love, but he’s right. He and his colleagues aren’t there to coach
so much as to judge. Collectively, they could "vote" to pull Shoba from the program.

What has she done to bring down the judges’ wrath? For one thing, her pitch is way over the 10-minute
limit. Franklin demands in a booming voice, "Are you serious about Springboard?"

"Yes," she answers. But she doesn’t look very sure of herself. Dark hair hanging limp, Shoba wears the
haunted look of exhaustion. Half-finished sentences punctuate the latest version of her pitch, completed
only the night before. She is trying to operate on less than four hours of sleep.

Sitting quietly in the background is her longtime business partner, Anthony Hayward. He remains silent
while Shoba endures a searing critique, right down to her physical appearance.

"Personal grooming is important," says Franklin. "And get comfortable with the stage." But what really
bugs him is this: "I have no sense of who Shoba is and why I should invest," he says.

The room grows uncomfortably quiet. Shoba makes a feeble attempt to get a chuckle from the crowd. No
go. Unfortunately, her own laugh sounds like a protracted gasp. At times her gasping is the only sound
in the room.

"People are pretty quick to say, ‘Should I listen or tune her out?’ It’s going to be a lazy audience,"
predicts Jonathan Hunnicutt, a young VC at Weston Presidio.

"The question is, Is this business run by experienced people and is it sustainable?" says Tony Fiore of
Rosse Enterprises, a venture firm. "I’m going to ask, ‘Does she have good business sense?’ I would try
to build trust up in you."

When Shoba explains that her biggest market is the 20,000 newsrooms in the world and that she needs
just 2,000 of them in order to be wildly successful, the judges love the concrete detail and urge her to
include it. Even Mr. Tough Love tries to lift her spirits after dashing them so. "I like your margins,"
Franklin volunteers. But it’s not so consoling when he tells her that "being a mess is a normal part of the
process." He says he’s always amazed when the final presentations bear little resemblance to the
practice runs.

But privately, Franklin expresses doubt that Shoba can transform herself in time for the big day. He calls
her presentation "a disaster." Which is exactly how Shoba characterizes her performance.

She leaves the walk-through distraught. As for her business partner, he is livid. "If I had a gun right
now, I would shoot you," he tells her. She fires back: "If you had a gun right now, I’d shoot myself."

Recalling the painful event, Shoba decides she deserved every bit of the criticism heaped upon her.
"Three minutes into my presentation I realized it was a disaster. The emotion I felt was intense anger at
myself. I felt I had blown a tremendous opportunity,… because people talk." Privately, she says, she also
feels hampered by her upbringing "in a traditional Indian family" that taught her to avoid self-promotion,
which makes it hard for her to respond to the more personal remarks.

Were some of Franklin’s comments out of order? "He’s an old investment banker and entrepreneur,"
says Springboard Enterprises’ Millman. "His advice to us is ‘Give them a couple days to get their act
together or don’t do it. Don’t allow them to put their company in jeopardy.’" In the first six Springboard
forums, only three women were asked not to present.

Shoba’s walk-through feels like a crushing defeat, but A.G.’s is a slam dunk. She’s hitting nothing but
net. She convinces her listeners that PrivaSource is well positioned to take advantage of the "$3-billion
health-care-data market." Her judges are so smitten that A.G. practically has to beg them for something
negative. They even admire her lavender sweater. Typical is Lorin Scott of Deloitte & Touche, who says,
"I love the whole thing." But finally someone breaks up the fan club. "This wasn’t great for me," says
Diane Franklin of New Venture Network. "What exactly does the company do, and how? What is the
technology, and how is it used?"

Funny how so much of the discussion comes back to business basics — what do you do and how do
you make money? Still, the consensus is that A.G. has a great story for investors. And yet privately,
she’s scared. What will happen if she doesn’t get a deal soon? As she sees it, she has a narrow window
to sell customers before those companies come up with their own solution to the privacy problem. How
long can her 10-person company go without a major cash infusion?

"An hour of McKinsey time? I tend to be pretty cynical about these things,
but I loved the process."

Lucy is wondering the same thing. Still, she’s feeling good. Of all the presenters, she is one of the few
brave enough to use props. She holds up a balloon and straw as a metaphor for how difficult it is to
send large files, like music, down low-speed networks. The props are a hit. But the judges warn her that
some of her slides are cluttered and threaten to obscure the Chaoticom story. Just because Chaoticom’s
technology is based on chaos theory doesn’t mean the slides have to be, too. Stever Robbins of Venture
Coach suggests she drop her first slide — a cartoon. But everyone else in the room loves the cartoon. So
Robbins relents and even suggests a way to bring the cartoon slide back in at the end of the
presentation, a suggestion she takes.

One more piece of advice from the judges: "Don’t forget to breathe."

http://www.inc.com/incmagazine/articles/24260-print.html

(Continued in the next article- Russ)