Aside from a passionate founder with a clear understanding of his/her business's costs, margin structures, competitors, and ability to scale, the experts helping the 15 startups selected to pitch at FoodBytes! SF 2019 were looking for companies operating in high growth markets with high barriers to entry, game-changing approaches to solving problems, and a sustainable business model.
Speaking as the startups geared up to pitch on stage in front of 350+ people, selected judges and mentors said they were also looking for entrepreneurs capable of clearly articulating the problem they are solving, and explaining why they are uniquely placed to solve it.
"A question I think founders don't focus on enough... is why are you the right person to solve that problem, because especially for early stage investment, it's all about are you the team to execute on this, not just is the idea great," said Chuck Cotter, shareholder at law firm Polsinelli and a mentor at the event.
Entrepreneurs whose ideas are "dispersed, scattered, where I don't think there is a cohesive thesis there," instantly raise alarm bells, said Cotter. "Or candidly, they don't come across as someone who can execute it."
'Take them through your plan like a good prosecutor takes somebody through a case'
Put simply, said The Intertwine Group founder Elliot Begoun (also a mentor at FoodBytes!), you have to grab people's attention immediately, and keep it: "Have a hook like you're a songwriter, and draw people in early into your presentation ... and have a cogent business plan that you're outlining for them.
"You want to take them through your plan like a good prosecutor takes somebody through a case. You want to walk them through why this is an opportunity that's worthy of investment and further investigation."
Red flags in pitches
As for red flags in pitches, Begoun said: "One is over-simplification. People will get up often and say hey this is a five trillion dollar category and we're going to get 1%. How are you going to get that 1%? Is that just what you want to do, or is there science behind it?
"Another is an unwillingness to be malleable enough to take feedback and adjust and come back the next day with something better. You want founders that will fight back if they disagree and not just passively acquiesce, but at the same time you want them to be malleable enough to take in the information they are receiving."
Fundamental vs incremental innovation
When it comes to innovation, the food and ag tech investors at the event were looking for what Lucas Mann at Acre Venture Partners described as "fundamental innovation... the long term fundamental changes that will underpin the future of food and agriculture."
Those investing in CPG companies, meanwhile, were more focused on "incremental innovation," said Arif Fazal at Blueberry Ventures, who noted that some of the most successful CPG products are "more of an evolution, not a revolution."
Learn more about FoodBytes! HERE.
