Why the Elevator Pitch Falls Short and What to Present Instead

?Oren Klaff has been a great source of learning for me for several years. In his latest video , he reviews the concept of the elevator pitch which is widely known, especially in the business world. It’s based on the idea that you might find yourself in an elevator with a high-profile investor and have just 90 seconds to sell your idea. While this scenario is often romanticized, it’s fundamentally flawed for several reasons.

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The Myth of the Elevator Pitch

The elevator pitch assumes that investors are willing to make decisions based on a very brief interaction. This is not only unrealistic but also counterproductive. Real investors, even the most aggressive ones like those on shows such as "Shark Tank," allocate more time to understand a pitch. They typically spend at least 15 minutes evaluating the product, market, and business model.

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Moreover, the elevator pitch is inherently rude and dismissive. It forces entrepreneurs to condense complex ideas into an unreasonably short timeframe, which can lead to oversimplification and miscommunication. In Europe, for instance, this approach is less common because it’s considered impolite to demand such a brief summary of someone’s business.

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The Reality of Investor Behavior

True investors understand that evaluating a business requires more than a quick pitch. They need to delve into various aspects such as market size, competition, revenue projections, and exit strategies. A 90-second pitch simply cannot cover these critical elements adequately.

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Additionally, many people who claim to be investors may not have the capital to invest. They might use the guise of an elevator pitch to quickly dismiss entrepreneurs without revealing their lack of funds. This behavior can be frustrating and misleading for entrepreneurs seeking genuine investment opportunities.

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What to Present Instead

When faced with a tight time constraint, it’s crucial to focus on key financial metrics that signal the viability of your business. Here’s what you should present:

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Revenue: Highlight your projected revenue, both near-term and long-term.

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Income: Discuss your income projections and margins, both gross and net.

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Exit Strategy: Outline your potential exit strategy, including timelines and expected outcomes.

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For example, you might say: "We project $20 million in revenue by 2025 with a 60% gross margin and 35% net margin. Our exit strategy involves a Series A funding round, positioning us for an exit by late 2025 or early 2026."

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This approach shifts the conversation to the language that real investors understand and appreciate. It demonstrates that you have a solid grasp of your business’s financials and a clear plan for growth and profitability.

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