Entrepreneurs pitching for start-up funding for their venture during the current downturn must instantly grab investors’ attention to have any chance of success, according to Waverly Deutsch (fac/waverly.deutsch), clinical professor of entrepreneurship. “Getting that initial sizzle or sexy part of the deal out is critical early on,” she said at the end of an interactive session that saw an entrepreneur make his pitch to a panel of seasoned investors.
Dr. Riaz Agha, a U.K.-based serial entrepreneur, had been selected from a group of European start-ups vying for the opportunity to pitch to a group of investors November 18 at an event modeled on the BBC’s hit TV show, Dragons’ Den, where well-known British investors aggressively examine would-be entrepreneurs who hope to secure seed capital.
The event was hosted by Chicago Booth at its London campus to celebrate Global Entrepreneurship Week and expand entrepreneurial programs to Europe. The school also hosted a separate competition in Chicago and a panel on private equity at its Asia campus in Singapore.
Sponsored by the Polsky Center for Entrepreneurship, the sold-out event in London featured Agha, who hoped to raise £500,000 ($727,800) to fund the roll-out of his price comparison website, GreatSwitch.com, that would enable customers to compare, switch, and save on 12 household bills and personal finance deals such as mortgages. He said his unique customer management system would automatically send messages to customers about new deals. “This will save you money while you sleep,” said Agha, who launched a successful medical journal while in college.
Subhead: ‘After the Pitch’
The Chicago Booth event offered the audience a unique learning experience said Linda Darragh, adjunct associate professor of entrepreneurship and director of entrepreneurship programs at the Polsky Center. “We were able to showcase Chicago Booth’s leading expertise in entrepreneurial finance by providing a behind-the-scenes look at what happens after the pitch.”
In addition to Deutsch, the judges included Keith Breslauer, ’88, founder of Patron Capital; Sherry Coutu, a well known London-based angel investor; Giuseppe Zocco, cofounder of Index Ventures; and Ashish Patel, EMEA managing director of Intel Capital. They agreed Agha showed positive energy but highlighted gaps in his pitch. Beginning with his Agha’s financial plan. “You have to get the investor excited,” Deutsch told him. “It didn’t come through in a way that grabbed the panel.”
Patel asked whether GreatSwitch offered anything new. “We need to get a better understanding about what is unique about this.” Coutu doubted customers would hand over so much personal data. “That’s quite a commitment from the customer,” she said.
Zocco said Agha had not been clear on what the risks were, especially given uncertainty over market conditions. “How would he factor that in to survive in the next one to two years?” he asked. “I would have liked to hear some alternative ways to make a virtue out of necessity.”
Breslauer questioned Agha’s revenue model, which was based on mortgage business at a time when 60 percent of UK lenders had “evaporated.” He said, “If we were going to back a business like this, why not focus on how we will deal with two million people with teaser mortgages that are going to reset? That’s a unique play. I would spend more time on how to take advantage of these negative conditions. If you figure that out it could be a big, big opportunity.”
The judges decided not to invest in Agha’s project, but as Darragh pointed out that in real life — unlike in Dragons’ Den — investors do not hand over cash after just one meeting. “In this case, there was no money at the end of the presentation, but Riaz is definitely in the process of raising money and hopes that this event helps him identify potential investors,” she said.
Chicago Booth also hosted Global Entrepreneurship Week events at the Chicago and Singapore campuses. In partnership with the Chicagoland Entrepreneurial Center, Chicago Booth hosted the “Chicagoland FAST PITCH Competition” on November 18 at Gleacher Center in downtown Chicago. Selected entrepreneurs pitched their business ideas to a panel of investors, industry experts, and seasoned entrepreneurs who provided feedback. A Chicago Booth team tied for first place with AutoShop, the world’s first “smart” shopping cart fitted with a wireless internet-enabled touch-screen computer and barcode reader. Team members included Hari Vijayarajan, a second-year student in the Full-Time MBA Program.
Later that evening, Steven Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, was among panelists at the Chicagoland Entrepreneurial Forecast who offered a look at what next year’s economy may bring for entrepreneurs in Chicago.
In Singapore, Chicago Booth and Chicago Private Equity Network (CPEN) hosted a panel, “Private Equity/Hedge Fund Investing in Today’s Climate,” on November 17. The panel, which was sold out, was moderated by Brian Rogove, ’08 (AXP-7), managing director of Cognita Asia (Englefield Capital) and president of CPEN-Asia.
— Phil Thornton