Kenya maintains its integral spot as a global hotbed for entrepreneurship. Thousands of new businesses spring up each year. Dozens progress to a notable scale. From there, some even grow to become legendary household names across the region.
Undergraduate and graduate entrepreneurship degrees flourish. Hundreds of doctoral candidates write their dissertations on entrepreneurial topics.
A myriad of training, coaching and mentoring goes on every month across our 47 counties. But a pinnacle moment in startups comes when pitching one’s business idea and fledgling venture to prospective investors.
A large Kenyan ecosystem exists to support entrepreneurs prepare for the ever-important investor pitch. Egerton University’s CoELIB Centre marshals investors. USIU-Africa’s Incubation and Innovation Center teaches entrepreneurs the science behind psychologically convincing investors on the merits of a business.
Strathmore University’s Enterprise Development Centre provides practice and training. NaiLab, USIU-Africa, and SwahiliPot convene investor pitching events. iHub and Nairobi Garage provide networking opportunities for entrepreneurs to meet investors. Lake Hub coordinates the Lake Basin Investment and Innovation Week.
Even Kenya’s robust technical and vocational education and training sector has started creating entrepreneurship centres such as Kisumu Polytechnic.
Fascinating scientific research exists that delineates how entrepreneurs should stand and point, adjust their tone of voice, and structure their pitch in ways that increase the likelihood of securing investor funding when giving presentations.
For investor pitches to prove effective, they must be deemed plausible and resonate with the funder audience. Researchers Ruben van Werven, Onno Bouwmeester, and Joep Cornelissen found that to achieve narrative plausibility and resonation, business startup founders should incorporate micro-level rhetoric.
First, rhetoric should include quantitative proof, rather than qualitative logic, that the business’s target customers experience a problem and need a solution. Second, founders should visually demonstrate their product or service.
Third, entrepreneurs ought to clearly explain how the macro business environment is conducive to the success of their business.
Fourth, give specific rather than vague quantitative information to the investors about the prospective customers surveyed, interviewed, and focus-grouped who strongly desired the product.
Then add specific details about the exact number of clients to date incorporating the theme that early performance suggests that the target customer’s need exists and that they are ready to pay for the solution.
Fifth, give specifics on how the founders and the assembled venture team have solved customer problems in the past. Do not rattle off academic accomplishments and training attended. Sixth, express clearly and in detail how the investors’ money will be spent to grow the startup.
Further, Scott Shanea, Will Droverb, David Clingingsmitha, and Moran Cerf recently conducted fascinating experiments using functional magnetic resonance imaging to scan the brains of investors after listening to entrepreneurs’ pitching their business concepts.
Entrepreneurs who not only gave excellent information, as described above but also demonstrated visible passion for their business gained a significant advantage over those entrepreneurs who could not generate perceptions that they held passion.
Interestingly, when a startup founder exuded passion and that was perceived by the investor, the investor’s brain registered 39 percent greater neural engagement. Further, the high passion entrepreneur received 26 percent more investor interest in funding the business than the low passion entrepreneurs received.
The effect was most pronounced on less experienced investors who proved the most influenced by passionate entrepreneurs.
What are some ways to better show passion for one’s business in a presentation? Make direct eye contact. Speak with sufficient audible volume. Tell anecdotes about one’s commitment. Smile. Incorporate humour. Pace while presenting instead of standing stationary. Utilise power poses.
A key takeaway for the entrepreneurship ecosystem here in Kenya, all of us trainers, incubators, and higher education institutions must not only teach entrepreneurs what to say to investors, but also how to say it.