Advice for Entrepreneurs via Endeavor: Curve Balls, Investor Interactions and Filling in the Cracks

Last week, we sat in on the 48th Endeavor ISP and Inaugural Endeavor Demo Day in Buenos Aires. Entrepreneurs, investors and executives from the worldwide Endeavor community gathered on both occasions to network and do business in a meeting of the past, present and future of entrepreneurship.

The week was most stressful, of course, for the entrepreneurs themselves. Whether outlining the minutest details of their businesses to panelists during the ISP or pitching their projects at Demo Day to the Endeavor audience and guest judges, the pressure was most definitely on.

We’ve compiled a few lessons learned from Endeavor’s week in Argentina and some pieces of advice all entrepreneurs will want to pay attention to:

Be prepared for curve balls.

At both the ISP and Demo Day, entrepreneurs were forced to confront some of the toughest questions of their entrepreneurial careers to date. Much of what was asked of them was of the typical fare. What’s your target market? How do you generate revenue? What differentiates you and sets your business apart from competitors?

Other lines of questioning, however, were of the more unexpected sort. During one ISP interview, a panelist – who happened to be from the same country as the entrepreneur – asked the entrepreneur to explain his company’s apparently botched publicity campaign. In another interview with a CEO who was reaching retirement age, panelists asked – lightheartedly – how much longer he planned to remain at the helm of his company at all.

Know who you’re talking to.

When asked for feedback for entrepreneurs on their interactions with investors, Monashees Capital’s Eric Acher had one big piece of advice – know who you’re talking to. Entrepreneurs often get so caught up in their pitches that they fail to do the homework necessary to really connect.

Mike Hennessey pointed out, for example, that it’s important to provide a context for foreign investors who may not be familiar with the local market. For Latin American entrepreneurs who look abroad for funding more often than not, this is key.

It’s also a good idea to find out who investors have in their portfolio already – especially if it’s a competitor.

Fill in the cracks.

Investors and executives know business, and when you’ve got a crack in your pitch, they’ll find it.

At the Endeavor Demo Day, one investor pointed out a disconnect between the amount of funding one entrepreneur was asking for and the objectives he’d laid out. With under half a million dollars, he wasn’t going to be able to attack the U.S. market, hire sales people and sustain his local growth. The investor also made note of the lengthy sales cycle of the industry his product was focused on – 12 to 18 months.

Another entrepreneur with a product geared towards Latin American women faced a tough line of questioning from investors following his demo day pitch, which contained a few too many sweeping statements regarding market size and competitors. Is there really no one targeting Latin American women?

Argentines, be ready to talk about the economy.

The issue of the current and future state of Argentina’s economy came up over and over again for Argentine entrepreneurs during the ISP. Were their numbers converted to dollars using the official rate or the parallel one? What were they going to do now that inflation has virtually demolished their cost-competitive edge in foreign markets? Should things go south, did they have a back-up plan?

Given the continually fragile state of the Argentine economy, the country’s entrepreneurs will have to think of answers and, more importantly, solutions in the months and years to come.

In a conversation about the issue, Eduardo Amadeo of Nazca Ventures pointed out that their flexibility and adeptness in dealing with the unexpected is actually one of the strong characteristics of Argentina’s entrepreneurs – a vote of confidence in managing the potentially rocky road ahead.