A vast number of articles, books and blogs have been written on the subject of business plan presentations and pitching to investors. However, nearly all entrepreneurs fail to pass the test. How come? This is simply due to the fact that most guides fail to address the "gist" of a pitch: its purpose is to sell and excite, not to educate your audience.
When giving a pitch, your investor is your customer. Your objective is to identify the center of interest and connect with the head, the heart and the gut of the investor.
As most VCs are analytical by nature, they will tend to give you a long list of subjects to cover. They will not tell you exactly what drives their decision making, mainly because it is hard for them to express it in a useful way. The best answer you will most likely come across is "I know when I see it".
So what does the investor really have at the heart of his decision making? Many tend to believe that the Venture Capitalist listening carefully to the presenting entrepreneur has in mind "Is this company going to make a lot of money?". Hence, most entrepreneurs are trying to answer this question in their pitch but are missing the essence of the Venture Capital process. What the Venture Capitalist really has in mind is, "Is this company the best next investment for me and my fund?". Of course, this is a harder question to answer, but this is the one the pitch has to provide a smart answer to.
To help entrepreneurs fully convince investors, we have created this modest step by step guide. Each step gives you some advice on what should be included in each slide of your pitch presentation, as well as general pitching technique tips.
To win over the hearts and minds of investors, your pitch has to accomplish three things:
1/ Tell a good, clear, easy-to-repeat story—the story of an exciting new startup.
2/ Position your company as a perfect fit with other investments the investors have made and their firm is chartered to make.
3/Beat out the other new investments the firm is currently considering.
These latter two issues are beyond the scope of this modest guide. So for now, let’s just concentrate on telling a good story.
Step n°2 |
Tell a good story
Most of the articles on pitching are generally right about the topics, even if they miss the nuance (sell, don’t explain).
But don’t take any template as graven in stone. Your story may require a moderate or even a dramatic variation on the list of slides below. You may need to explain the solution before you can explain the market; or if you are in a crowded space you may need to explain why you are different than everyone else early on in the conversation; or you may want to drop some very impressive brand-name customers before you explain your product or your market.
The one thing you may not do is expand the number of slides to 20 (or 30 or 50)! Other than that, let the specifics of your situation dictate the flow of your slides.
Nevertheless, it is useful to have a guide. With the caveats above in mind, you will find below a basic outline for your pitch.
Step n°3 |
Cover Slide: Company name, location, tagline, presenter’s name and title.
If there are multiple team members participating in the pitch, put names on the next slide instead.
Key objective:Everyone in the room should know the basic idea and value proposition of the company, including the target market, before the next slide is shown. All the words should not be on this slide, but with one or two sentences orally, reinforcing and extending the tagline, everyone should have a foundation for what is to come.
Cardinal sin: Launching into your presentation with an investor at the table thinking, “I wonder what these guys do?”
Step n°4 |
Intro Slide: Team.
The three or four key players in the company.
For some reason, everyone puts the team slide at the end, but investors almost always want to know this at the beginning, and it is just common courtesy to make sure everyone is introduced. But make this short, crisp and relevant. This is not the time to share everyone’s life story, or detail the resumes of all six members of the advisory board.
Focus on a significant, relevant accomplishment for each person that identifies that person as a winner. In 10 to 15 seconds, you should be able to say three or four sentences about your CTO that says everything the investors want to know about him or her at that moment.
Key objective: Investors should be confident that there is a good credible core group of talent that believe in the company and can execute the next set of milestones. One of those milestones may be filling out the team, and so it is important to convey that the initial team knows how to attract great talent, as well as having great domain skills. If there is a gap in the team, address it explicitly, before investors have to ask about it.
Step n°5 |
Slide 1: Company Overview.
The best way to give an overview of your company is to state concisely your core value proposition: What unique benefit will you provide to what set of customers to address what particular need? Then you can add three or four additional dot points to clarify your target markets, your unique technology/solution, and your status (launch date, current customers, revenue rate, pipeline, funding needed).
Key objective: Flesh out the foundation you established at the beginning. At this point, no one should have any question about what it is that your company does, or plans to do. The only questions that should remain are the details of how you are going to do it. Another key objective you should have achieved by this point in your presentation is to make sure that if there are some compelling brand names associated with your company (customers, partners, investors, advisors), your audience knows about them.
Feel free to drop names early and often—starting with your first email introduction to the investor. Brand name relationships build your credibility, but do not overstate them if they are tenuous.
Step n°6 |
Slide 2: Problem/Opportunity.
You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve, or opportunity you are going to exploit, and that you understand the market dynamics surrounding the opportunity—why does this situation exist and persist, and why is it only now that it can be addressed?
Show that you really understand the very particular market segment you are targeting, and frame your market analysis according to the specific problem and solution you are laying out.
In some cases, however, the problem you are attacking is so obvious and clear that you can drop this slide altogether.
You do not have to tell investors that there are a lot of cell phones out there, or that teenagers like to socialize. Save yourself, and the investors, the pain of restating the obvious.
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