Bayes Centre

The Second Most Important Pitch

The Second Most Important Pitch is a 3-year ESRC-funded project at the University of Edinburgh Business School that aims to study a pivotal evaluative hurdle that influences the ability of new digital ventures to prosper and grow.

The 'first pitch' software entrepreneurs give to venture capitalists to secure funding has become the stuff of legend. But there is another, just as important, pitch that the entrepreneur must make if their fledgling venture is to survive and prosper.

While the first pitch to investors is concerned primarily with issues of 'starting' and 'financing', these second presentations appear primarily to be about the processes of 'scaling-up' and 'credentialing'. There is anecdotal evidence that those ventures endorsed by these important market actors receive a significant boost and, conversely, where this form of backing is not forthcoming, it becomes a block or impediment to progress. We term this hurdle the 'second most important pitch'.

Why This 2nd Pitch Matters

Pitching to analysts is a crucial step in the early life of a digital venture, particularly when they attempt to scale. It is the critical practice in fiercely competitive technology markets where attention gets funnelled to some enterprises and away from others. Whether or not a venture will grow can depend upon how well it overcomes this hurdle. The UK, for instance, is recognised as among the most vibrant places in the world for the creation of digital start-ups. However, its new enterprises are often unable to take the next important step.

According to Nesta (2016, 11), “[t]oo many start-ups start, but never scale”. Analyst pitches are key to these processes of scaling, but little is known about them. The Scaleup Institute (2014) highlights six factors that hinder the development process of ventures, but there is no mention of this second pitch. Since industry analyst outputs are widely read by technology adopters and investors, those pitching to these actors receive not only increased attention but essential forms of ‘credentialing’.

We will analyse the 'pitches' made by new digital ventures to analyst firms and investigate how the analysts subsequently assess the venture's viability and potential as compared to other players. While much has been written about the first equity pitch a start-up will make to an investor, little is known about how ventures make these second important pitches to analysts to win their endorsement. We theorise the second pitch as an integral part of an 'endorsement economy' that has developed within the digital and broader information technology sector.


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