What is Reverse Pitching?
Hey there! Let me start by asking you a question.
Have you ever watched shows like Shark Tank or Dragons’ Den?
If so, you’ve probably seen entrepreneurs pitching their business ideas to investors, right?
They present their company, show off their product or service, and then ask the investors—the sharks or dragons—for money. It’s a one-way street where the entrepreneurs are doing all the pitching.
Well, what if the tables were turned? What if the investors pitched themselves to the entrepreneurs instead?
That’s exactly what reverse pitching is all about! It flips the traditional pitch process on its head.
In this blog post, I’ll explain reverse pitching in simple terms. I’ll share my own experiences with it as an angel investor too.
What is Reverse Pitching?
Let’s start with the basics. Reverse pitching is when investors pitch themselves and their funds to startup founders and entrepreneurs, instead of the other way around.
In a normal pitch scenario, entrepreneurs knock on the investors’ doors with their business plans and pitch decks. They’re the ones saying “Hey, invest in my company!” But with reverse pitching, the roles are flipped. The investors say “Hey startup founders, pick me! Let me invest in your awesome company.”
It’s like a dance where the investors are trying to woo the entrepreneurs, rather than the entrepreneurs trying to charm the investors. The entrepreneurs get to be the ones in the driver’s seat for a change!
How Does Reverse Pitching Work?
Okay, now that we know what reverse pitching is in theory, let’s look at how it works in practice.
Reverse pitching events are organized where investors apply and pay a fee to attend. Entrepreneurs get free or discounted access. At the event venue, different investors set up booths like exhibition stalls.
Then it’s showtime! The entrepreneurs walk around exploring each investor’s booth. The investors give their elevator pitches and try to convince the entrepreneurs why they should pick their investment fund or firm.
Some events have scheduled slots where entrepreneurs sit across from multiple investors doing short 10-15 minute pitches one after the other, just like speed dating!
The entrepreneurs get to be the ones asking the tough questions about the investors’ track records, areas of expertise, value-add services, and terms. It’s a complete role reversal compared to a traditional pitching event.
After hearing all the pitches, the entrepreneurs decide which investor(s) they want to seriously engage with for potential funding and partnerships. The ball is completely in their court!
Benefits of Reverse Pitching
There are many advantages to the reverse pitching model, especially for entrepreneurs. Here are some of the key benefits:
- Founder-Friendly: Reverse pitching is extremely founder-friendly. Entrepreneurs remain in control throughout the process rather than being at the mercy of investors. They call the shots on which investor(s) they want to work with.
- Efficient: At a normal pitching event, entrepreneurs often blindly pitch to dozens of investors who may not even be a fit for their startup’s stage or industry. Reverse pitching avoids this inefficiency by letting investors sell themselves first.
- Transparency: Investors have to be fully transparent about their offering, track record, requirements, and terms when reverse pitching. There’s little room for opacity compared to traditional pitches.
- Networking: Reverse pitches provide great networking opportunities for both entrepreneurs and investors in a casual setting, facilitating potential partnerships.
- Social Proof: Getting pitched to by multiple investors is a stamp of social proof that can boost an entrepreneur’s confidence and negotiating position.
- Alignment with Investment Thesis: As an investor, I’m always keeping an eye on major trends, emerging technologies, and gaps in the market that could present big opportunities. I develop theses around what I think could be the next big thing based on my research and experience. By reverse pitching my focus areas to a room full of founders, I’m effectively putting a call out for startups in my areas of interest to come directly to me.
My Experience with Reverse Pitching
As an angel investor, I’ve participated in quite a few reverse pitching events over the years. I have to say, they’ve been game-changers for how I discover and evaluate investment opportunities.
At first, I was a bit hesitant about this seemingly bizarre format of pitching to entrepreneurs instead of getting pitched to. But after my first couple of reverse pitches, I was totally sold!
The biggest benefit for me has been efficiency. Instead of sifting through hundreds of startup pitches, many of which are poor fits, reverse pitching lets me get in front of high-quality entrepreneurs who are a match for my investment thesis and expertise.
I also find transparency extremely valuable. When pitching, I have to lay out all my cards on the table – my background, investment focus areas, portfolio, terms, and what I bring to the table as an investor. There’s little room for obfuscation.
Lastly, reverse pitching is just a lot of fun! It has such a vibrant, energetic atmosphere with investors jockeying to win over entrepreneurs. It’s fun putting on a little performance and working the room. As an introvert, it pushes me out of my comfort zone in a good way.
Sure, it can be tough putting yourself out there and risking rejection from entrepreneurs. But I find the format to be low-risk and really enjoyable overall. I’m definitely a convert to the reverse pitching movement!
TL;DR
- Reverse pitching flips the conventional pitch process where investors pitch to entrepreneurs instead of the other way around
- It happens at special events where entrepreneurs can engage multiple investors by giving short pitches
- The big benefits are being founder-friendly, efficient, transparent, great for networking, and a social proof booster
- As an angel investor, I find reverse pitching to be a game-changer for discovering great startups that fit my expertise
Q&A
Q: Is reverse pitching only for angel investors and VCs? Or can any type of investor participate?
A: Reverse pitching is open to all types of investors – angel investors, venture capitalists, private equity funds, accelerators, corporate VCs, family offices, etc. As long as they’re looking to invest in startups, they can participate.
Q: Does reverse pitching replace traditional pitching completely?
A: No, reverse pitching is meant to complement rather than replace traditional pitching. It’s an additional format that puts founders first. Conventional pitching by entrepreneurs still happens as well.
Q: What tips do you have for entrepreneurs attending a reverse pitching event?
A: Prepare targeted questions to vet each investor’s fit, don’t be afraid to push investors on their claims, keep an open mind, prioritize cultural fit over just money, and trust your gut instincts.
Reverse Pitching Quiz
Here’s a short quiz to test your understanding of reverse pitching! Answer each question with a ‘yes’ or ‘no’:
- In reverse pitching, entrepreneurs pitch their startups to investors. No (1 points) – It’s the investors who pitch to the entrepreneurs in reverse pitching.
Yes (0 points) - Reverse pitching provides more transparency for entrepreneurs. No (0 points) Yes (1 point) – Correct! Investors have to be upfront about their terms, requirements, and value-add when reverse pitching.
- Angel investors and VCs are the only types of investors who do reverse pitching. No (1 point) – Correct! Reverse pitching is open to all investor types like PE funds, accelerators, corporates, etc. Yes (0 points)
- Reverse pitching is more founder-friendly compared to traditional pitching. No (0 points) Yes (1 point) – Correct! The reverse format puts entrepreneurs in control and lets them call the shots.
- Reverse pitching boosts the social proof of entrepreneurs getting pitched to by investors.
No (0 points) Yes (1 point) – Correct! Getting reverse pitched to signals an entrepreneur’s startup is desirable and legit.
Scoring: 0 points: Reverse pitching rookie! You should read the post again.
1-2 points: Not bad, but there’s room for improvement in your reverse pitching knowledge. 3 points: Well done! You have a solid grasp of reverse pitching basics.
4-5 points: Excellent! You’re a reverse pitching pro who really absorbed the key concepts.
I hope this blog post gave you a clear understanding of what reverse pitching is, how it works, and why it’s beneficial for both entrepreneurs and investors. As an angel who has seen it from the investor side, I can vouch that it’s a fantastic model that more folks in the startup ecosystem should explore.
