Video: Elevator pitch

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updated 8/11/2006 1:51:20 PM ET 2006-08-11T17:51:20

"If I am to speak ten minutes, I need a week for preparation; if an hour, I am ready now." That maxim comes courtesy of Woodrow Wilson, the 28th president of the U.S. But you can also apply it to less august public speakers, like, say, chief executives of tech startups.

This month, 50 small-time tech entrepreneurs didn't even get their full ten minutes to make their case. At the AlwaysOn Summit at Stanford University in Palo Alto, Calif., each would-be Sergey Brin or Larry Page had just six minutes each to pitch a roomful of about 100 venture capital investors and potential business partners.

For some of the startups here, the stakes are pretty high. Make a lasting impression, and it could open the door to an hour-long pitch session with the funder of your dreams. Put the audience to sleep, and, well, it just means one thing: lots more pitching.

Rex Wong, CEO of Internet TV distribution company Dave.TV, pitched so smoothly that he was chosen as one of three CEOs to make a two-minute pitch at an evening reception. His secret sauce? "Pitch all the time — that’s why they call us chief evangelist officers."

Audiences such as the Stanford Summit are especially challenging, says Wong, because nobody knows who they are talking to. "It’s a VC fest, and you always get nervous. These are high-level, intimidating people."

Luckily for Wong and the 49 other startups at the conference, now is a great time, and the Bay Area is a great place to be looking for cash. In the second quarter of 2006, venture capitalists invested $6.73 billion — 5 percent higher than last year. More than $2.4 billion of that came from VC firms in the Bay Area, up 13 percent over last year. Unlike the last bubble, startups in the Web 2.0 boomlet rarely talk about going public. Here the goal is to get snapped up by a Google, a Yahoo! or a News Corp., which officially launched tech's comeback by ponying up nearly $600 million for MySpace.com a year ago.

Since Wong received lots of business cards and invitations to talk "offline" after the event, he deemed his moment in the spotlight a success."If we get partnerships or money out of this, it will have paid off."

Murgesh Navar, CEO of podcast advertising business Podbridge, says audience engagement is key. His pitch included a Web demo with Apple Computer's iTunes software, and audio samples to go along with it. "But you don’t want to stand there behind the podium clicking on this or that," he says. Navar walked away from the speakers’ lectern and made eye contact with the audience and panel of judges.

Some CEOs in the enterprise and information technology services categories suffered from audience jargon fatigue. The terms "recentralized infrastructure," "enablement" and "back-end data services," lulled the audience. Rick Tinsley, CEO of Silver Peak Systems, even stayed behind his lectern while uttering those words.

"If you only have six minutes, what VCs really want to know is who you built your product for and how you’re going to make money," says Tim Chang, a partner at Gabrial Venture Partners who served as a judge for 11 CEO pitches. At Stanford, a loud beep signaled the passage the first minute, then the sixth minute.

"Don’t spend your time talking about your technology and what’s wrong with the world — we already buy into that and give you the benefit of the doubt."

Chang expressed this sentiment loudly when he asked Ragnar Kruse, CEO of wireless data delivery company Smaato, "Who cares?" after Kruse finished his pitch. "I really didn’t mean it flippantly," Chang says. "I just literally wanted to know who their customer base was."

Another judge challenged MusicGremlin CEO Jonathan Axelrod to explain how his company’s on-demand wireless-enabled MP3 player would be able to compete with forthcoming wireless products from Apple and Microsoft. The moderator dismissed the criticism as an "uncreative question," says Chang. "But for all of us judges it was the one, looming question we wrote down."

Business plan pitchers should be ready for all questions from potential funders — especially ones that cut to the heart of the business model and ask about competition. Take a lesson from Hollywood movie pitchers and use clear, relevant analogies, says Chang. "Those guys can pitch a movie in two sentences. Remember Speed? Allegedly that pitch went like this: 'Think Die Hard, on a bus.' "

Rebtel CEO Hjalmar Winbladh employed that method well, says Chang. How did he describe his mobile software company? "Think Skype, for wireless."

© 2012 Forbes.com

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