In a reverse pitch, another person or company pitches your business back to you. Confused? While the idea might seem to come of left field, having your business pitched back to you by someone who doesn’t see your business the same way that you do can be a real eye opener. The main purpose of the exercise is to get you thinking about new ways to solve problems and move your company forward.
What Is Reverse Pitching?
A reverse pitch is an event where organizations pitch entrepreneurs on a business plan. The larger company attempts to sell the smaller company on a path forward. If done right, a reverse pitch is a win-win for both companies. The small business gets funding and partnership opportunities. And the larger company gets help from the entrepreneur or small business on solving a pressing problem.
Here’s an example. Suppose you have a small web design and content creation business. Right now, you’re pitching your services to anyone and everyone. You haven’t really settled on a niche. You do know, though, that you want to focus on larger companies, ones needing advanced services and that can pay for them.
A reverse pitch can help you focus your business plan. Companies pitch you on ways to solve their problems. An environmental cleanup group might discuss creating sustainability-focused content. A political lobbying firm might pitch you on using your online marketing skills to reach politicians.
The possibilities are endless. In each scenario, though, you get exposed to a new line of thinking, and the company doing the pitching gets a new potential partner — you.
Organizations Pitching to Entrepreneurs
A popular type of reverse pitch involves a larger company pitching to a smaller one. The examples above — big companies pitching to a small web design firm — fall into this category.
Why would a large organization want to reverse pitch a small business or entrepreneur? What’s in it for them? There are several possibilities.
One, business activities sometimes create negative externalities, or unintended consequences. Consider one food bank in Texas. It receives tens of thousands of pounds in canned food donations each month. That’s fantastic — plenty of hungry people can be fed with that much food.
But what about the hundreds of food cans in each month’s inventory that they can’t use? Food that is either expired, damaged, or otherwise unfit to eat? Until recently, much of that food was ending up in landfills.
Then the company had an idea. A small business in the area was selling feed to farmers but needed help growing and developing a vision. The food bank reverse pitched them. The idea: take the unused food donations, feed them to grubs, then sell those grubs to farmers to feed chickens. The concept was such a winner that it won first prize at the SXSW Reverse Pitch competition.
Venture Capitalists Pitching to Startups
As an entrepreneur or small business owner, you might have a groundbreaking vision but lack the capital to bring it to fruition. Venture capitalists have lots of capital but only dole it out to those they deem most worthy. The result: startups often try to pitch venture capitalists on investing with them.
In a reverse pitch, the roles are reversed. Venture capitalists sell their funding capabilities to you. Why would they do that? Because venture capitalists are always seeking lucrative investments. And also because they believe they can help your business take shape and grow. It’s a win-win. You get the funding your business needs to develop its vision. The venture capitalist gets to share in the profits that vision brings.
Financial Institutions Pitching to Startups
You might think big banks and other financial institutions run the world, controlling the global economy from their skyscrapers in cities like New York, London, and Tokyo. But in the 21st century, financial institutions depend on startups as much as startups rely on them. That’s because the fintech world is exploding, small businesses developing apps and other technologies used by big banks to grow their profits.
Consider the reverse pitch event held in 2017 by the Japan External Trade Organization. Several huge financial institutions showed up, including SoftBank and Sumitomo Mitsui Financial Group. Why were they there? To reverse pitch fintech entrepreneurs on developing business plans for improving mobile financial technology.
Multinational Corps Pitching to Small Businesses
As a small business, it’s advantageous to think big when it comes to reverse pitching. The reason why you would do this is to get your foot in doors as a contractor or service provider that might otherwise be closed. That’s the reason why entrepreneurs when to give multinational chemical corporation Asahi Kasei an audience at a reverse-pitching summit in Japan. The company planned an expansion into the automotive sector and needed help with several niche technologies, such as monitoring carbon dioxide levels inside vehicles. The summit gave them a forum to reverse pitch their ideas to entrepreneurs with the know-how to make them a reality.
If you’re looking to breathe new life into your business, consider seeking out a reverse pitch opportunity. The exercise can spur fresh ideas and new business models you might not have thought of before and even get you funding or a new business partnership.