ASK any entrepreneur about pitching to potential investors and they will tell you it is a nerve-wracking experience. In some instances, it can be a make or break moment for their business too.
With the economy mired in the doldrums, entrepreneurs have been identified by the Government as integral to stimulating growth by creating new businesses and jobs. But given that the stakes are so high, are there practical steps which can be taken to try to improve entrepreneurs’ chances of success when trying to persuade investors to back them financially?
I’m leading a major research project at Leeds University Business School which aims to identify and analyse how successful entrepreneurs communicate with investors in pitches. If we observe and listen to a variety of entrepreneurs pitching for funding, it will be possible to identify the skills that the more successful ones employ. Clearly one of the most important elements governing whether a pitch is successful is the strength of the business idea itself.
But previous academic studies carried out at Leeds and at other universities have shown that in pitches, successful entrepreneurs do certain things and that this can enhance their chances of success.
Time and time again, they communicate in a certain way to impress and make their point. I think that if properly identified these communication skills can then be taught to and honed in early stage entrepreneurs, increasing their chances of success and ultimately boosting economic growth. The project aims to develop state-of-the-art training materials for entrepreneurs which will be used within the Connect Networks to help generate enterprise.
This three-year project is funded by a £200,000 grant from the Economic and Social Research Council. I’m seeking as many as 30 technology entrepreneurs in Yorkshire to participate in this project. This project will overcome limitations within existing approaches to understanding and improving enterprise.
Existing research in entrepreneurship focuses on two main approaches – “the cognitive” and “the institutional” but there are limitations with both of these. The cognitive approach assumes that the personality traits of entrepreneurs are largely innate and so cannot be taught. But this is, of course, of no use when trying to stimulate the economy.
The institutional approach states that entrepreneurs make a success of the venture by using cultural symbols such as emphasising that they were educated at a top business school or that they have high-powered individuals involved in the business. But this cannot explain why entrepreneurs who do not fit this mould can be successful.
We are taking a more integrative approach to understanding what makes an entrepreneur successful in these situations because ultimately we are interested in moving away from a rather fatalistic approach which is that successful entrepreneurs are simply born that way. Email J.S.Clarke@lubs.leeds.ac.uk