How to pitch presentation and get investment
Investors receive n + 1 projects daily for consideration.
How to make sure that your project touches the secret strings of their souls,
bypasses other applicants and receives approval?
In order to get an investment in your project, you need a “correct” presentation.
There are many tips on the network on how to make a “correct” presentation.
Below I post another.
Its value is that it is precisely “an inside look” - the wishes of the Venture Capitalist about what,
in his opinion, should be the “correct” presentation.
It's about the pitch presentation.
Original article in English here: Perfecting Your Pitch By Garage Technology Ventures .
Improving Your Pitch Presentation
Countless articles, books, and blogs have been written about investor presentation of business plans and pitches.
Despite all the wealth of these tips, almost every entrepreneur misunderstands them.
Because most of your company’s pitching guidelines lack the most important thing: the purpose of your pitch is to sell , not to train.
Your task is to excite, not enlighten.
Pitching is to understand what your client (investor) is most interested in, and to develop a dialogue that will allow you to get the head, heart and offal of the investor.
If you want advice on pitching, you can ask VK (Venture Capitalist), but most likely you will not get a really good answer.
VCs have an analytical mindset and will really give you a list of topics that you need to cover.
They will not tell you what their innermost desires really are.
Mainly because they themselves cannot express this in understandable categories.
“I will know it when I see it” is probably the best you can hear.
What is the investor most interested in?
In contrast to popular belief ...
In contrast to the popular belief, VK, sitting at the other end of the table and impenetrably looking at the entrepreneur presenting his presentation, DOES NOT think: “Will this company make a lot of money?”.
This is a simple question that most entrepreneurs seem to answer.
But they miss the very essence of venture capital investment.
What VK actually thinks about is: “is this company the best next investment for me and my fund?”
This is a much more complex question, but this is exactly what the entrepreneur must answer.
(Note: Translation: the fact is that, for obvious reasons, most VCs try not to invest in several similar companies, which can then / will compete with each other. Thus, if you invest in you, a little later it will appear on its horizon really a grandiose project, and yours, in comparison with it, will turn out to be so-so, the VK will have to abandon the "grandiose" that other VKs will get. Hence the fear of putting the wrong way, however, at the same time, not to be mistaken and be able to discern the next "Google" or "Facebook to. ”)
In order to win the heads, hearts and imagination of investors, your pitch should be perfect in three things:
- tell a good, clear, easily retellable story - a story about an exciting new startup;
- to present your company as excellently corresponding to what VK has already invested earlier and what its company intends to invest in;
- surpass other entrepreneurs, in which his company is currently considering investments.
The last two points are beyond the scope of this modest guide, so let's focus on how to tell a good story.
Tell a good story
Most articles about pitching are mostly true about topics, even if they miss out on nuances (sell, not explain).
But do not perceive each pattern as if it were carved in stone.
Your story may require a minor, or perhaps dramatic change in the slide sequence below.
You may need to show a solution before explaining the market.
Or, if you are in a crowded place, you may need to explain why you are different from everyone else at an early stage of the conversation.
Or you might want to trump some impressive names with famous customers and / or brands before explaining your product or your market.
The only thing you cannot do is extend the number of slides to 20 (or 30, or 50)! In all other respects, let the specifics of your situation dictate the sequence of your slides.
Nevertheless, it would be useful to have some guidance.
Keeping in mind the above warnings, the following is a general outline of your pitch:
Slide 1: Cover Slide
Company name, location, slogan, name and position of the presenter.
If several members of your team participate in the presentation, then put the names on the next slide.
Key task: everyone in the room should know the main idea and value proposition of the company (including the target market) before you move on to the next slide.
This slide does not have to be fully stated.
However, one or two sentences orally, reinforcing and expanding the slogan, should give everyone sitting in the room an understanding of what follows.
Fundamental mistake: start the presentation with an investor sitting at the table who thinks: “what are these guys actually doing ??”.
Slide 2: Intro Slide: Team
Three or four key players in the company.
For some reason, everyone puts a team slide at the end, but investors almost always want to know about it at the beginning.
Also, this is a common tribute to ethics - to make sure that all team members are represented.
But do it briefly, clearly, and to the point.
Now is not the right time to share each person’s life story, or provide a summary of all six members of the Advisory Council.
Focus on everyone’s most significant and relevant achievements to show them the winner.
In 10 - 15 seconds you should be able to issue 3-4 offers about your service station, which would tell the investor everything he wants to know about him or her at the moment.
Key task: investors must be sure that there is a good core of the team, trustworthy talents who believe in the success of the company and are able to complete the next stages (milestones).
One of these stages can be filling the team, so it is very important to convey that the initial team knows how to attract great talents to their project, and also has significant skills in this field.
If the team is not yet complete, make this clear before investors ask you to.
Slide 3: Providing a solution. (Delivering the Solution)
You may need an additional slide to show how
your solution fits into the value chain or ecosystem of your target market.
Do you supplement widely used technologies, or supplant them?
Are you changing the way certain business processes are carried out, or are you just executing them in exactly the same way, but faster, better, and cheaper?
Are you revolutionizing the current value chain
, or are you fitting into common channels?
Who exactly is the buyer, and is this person different from the user?
Slide 4: Benefits / Value
Clearly and quantitatively identify the three or four key benefits that you provide and who will take advantage of these benefits specifically.
Will some customers / users / consumers benefit more than others or sooner than others?
These driving forces should show your market entry strategy and the roadmap of the product / service, which you will discuss later.
Slide 5: Secret Ingredient / Intellectual Property.
(Secret Sauce / Intellectual Property)
Depending on your decision, you may need a separate slide to convince investors that no one else can easily duplicate or surpass your decision (implied that this is true).
If you belong to a business sector in which intellectual property is important, then this slide is just the place where your secret ingredient should be applied.
This, as a rule, is a certain combination of proprietary / patented technology, unique team experience in this area and unique partnership.
Reduce this to simple elements and definitions spared from jargon.
Do not lead the audience with a detailed tour of the architecture of your product.
Instead, highlight the elements of your technology that give you unique potential for leverage and scalability for your future growth.
If you perform slides 4 and 5 well, it will be easy to set the stage for ...
Slide 6: Competitive Advantage. (Competitive Advantage)
You may be good, but are you better than everyone else? Most entrepreneurs do not understand the purpose of this slide, which is not to list all the shortcomings of competitors (no matter how fun it is).
Just the fact that you have really cool technology does not mean that you will win.
You must convince the investor that a lot of people will buy your product or service, even if they have several options.
And do not forget that the status quo
is often the toughest competitor - most potential customers can reach out without buying your decision or your competitor’s decision.
The best way to convince the investor that you really have the best mousetrap on the market is to have feedback from existing or potential customers who, in their own words, formulated why they bought or will buy your offer, among other other alternatives.
Use this slide to summarize three or four main reasons why customers prefer your decision over others.
Many entrepreneurs have been trained to use the four-quadrant matrix, which shows that they are in the upper right square, however, in the venture capital community this has already turned into a joke.
Regular Check-boxes are better, if not abused.
Make sure that your “checkmarks” reflect market demands, and not just the features of your product.
Slide 6.1: Competitive Advantage Matrix. (Competitive Advantage Matrix)
Depending on how important the analysis of competitive players in your market segment is, you may need a detailed list of competitors by category, with their strengths and weaknesses, in comparison with your company.
It is preferable that you prepare this as a “pocket slide” for use in case of possible questions.
Regardless of whether you present this slide, it is important that you do this “homework” for your competitors, and that you do not distort their strengths and weaknesses.
Slide 7: Moving on to market strategy. (Go to Market Strategy)
The only most convincing slide in any pitch is a long list of clients and strategic partners who have already expressed some interest in your decision (or better if they have already joined the testing of your beta version).
Instead, too often, this slide is just a sample list of standard marketing and sales tactics.
You should focus on formulating non-obvious, potentially explosive elements of your strategy.
Better yet: Make your comments clear of the critical obstacles that need to be overcome and show how you will get around them.
If there is no long list of customers, and there is nothing particularly unique or innovative in your strategy, then drop this slide and clarify the components of the sales model when discussing your business model (next slide).
Slide 8: Business Model. (Business Model)
How do you make money?
Usually, selling something at a certain price to certain customers.
But there are many variations of the standard scheme.
Explain your pricing, costs, and how you are going to be especially profitable.
Make sure you understand the key assumptions behind your planned success and are prepared to defend them.
What if you can’t maintain the price?
What if each sale takes twice as long?
What if your expenses do not decrease over time?
Many investors will want to check how deeply you understand your business model. Be prepared to articulate the sensitivity of your business to changes in your assumptions.
Slide 9: Financial Forecasts. (Financial Projections) The
two previous slides should neatly fit together in your financial forecasts for the next 5 years.
You should show two or three key factors that affect income, expenses and growth (for example: customers, number of sales, new products, sales expansion, new markets), as well as lines on revenue, expenses, profits, cash balance, number staff.
The most important thing that should be conveyed on this slide is that you really understand the economy and development of a growing, dynamic company, and that your vision is based on an understanding of practical reality.
Your financial performance should tell your story in numbers as clearly as you tell the story in words.
Investors do not focus on the accuracy of your numbers; they focus on the consistency and integrity of your thoughts.
Slide 10: Financial Needs / Stages (Milestones) .
(Financing Requirements / Milestones)
From your financial indicators, it should be clear what your capital needs will be.
On this slide, you should outline how you plan to receive financing.
How big will each round of investing be and what are the deadlines for each round. And bind the financing - to your immediate and medium-term stages (milestones).
You should also include your key accomplishments today.
These stages should be linked to key indicators and in your financial forecasts, and they should provide a clear picture of the launch of your product on the market and plans for market expansion.
This is essentially your operational fundraising plan.
Do not waste time providing the “cash spending” table.
Investors want to see indicators of achievement, not indicators of business activity.
they want to be sure that you are asking for the amount of money that is needed to lead the company to significant stages.
Slide 11: Resume slide. (Summary Slide)
This slide is almost always wasted.
Most entrepreneurs simply provide three or four directions to how wonderful their investment offer is.
Usually, these are the same words that investors hear from many other entrepreneurs, such as: “We have great opportunities, and we will be winners! “
Your key task on this slide is to consolidate the core value proposition of your company in words that are memorable and unique to your company.
If the venture investor present at the meeting will have to give your partners a brief description of your company, these are exactly the words that you would like him to use.
This is a good place to consolidate your slogan, or mantra - a short phrase that reflects the essence of your message - to investors.
The best approach to creating your summary slide is to imagine that this is the only slide you can ever show.
If you had to make the whole pitch - in one slide (font size 30) - then this is this slide.
Well, now we have a good general plan for pitching your company.
But remember, this is about selling your investment proposal, not about filling out a form.
Do not get hung up on using this or any other template.
You should be aware of those issues related to your company on which investors are most concentrated. It is on these issues that you should focus.
Be sure to cover all of your predictable “hot questions” in your presentation as early as possible, even if it means disrupting the above slide sequence.
More Effective Pitching Tips
How do you turn a monologue pitch into a sale?
Make sure that every key moment of the presentation - connects with your audience.
Keep your text very, very short.
You are welcome.
If possible, use graphics and images.
And get your audience involved. Ask questions.
"In your opinion, this market opportunity is interesting?".
"Have you seen someone who would solve this problem?".
"Do you think that CIOs will be interested in a solution like this?".
You can get tough enough feedback, but you’ll know much more about what is going on in the investor’s head and you will involve them in your presentation instead of letting them play under the table with your BlackBerries.
Some additional tips for improving efficiency your pitch:
* Make sure that everyone in the room represented.
P edprinimateli rarely ask investors to introduce them.
Although it is customary to be familiar with the biography of each investor (if available on the Internet), it’s quite decent to ask something like: “What investments have you considered recently?”
And if there are any other persons in the room, it’s quite appropriate to offer them introduce yourself and provide you with some information about yourself.
* Do not use the good old “Mission Statement” on the overview slide. In the venture capital industry, the Mission has also become a joke.
As well as declaring: “Our forecasts are conservative.”
Focus on making statements about your company's value proposition clear, concise, and unique.
* Prepare good use cases.
Sometimes, no matter how simple and clear the product is described, what the investor really needs is a concrete example of how people will actually use it.
In some cases, there will be several different use cases. You will have to explain them in order to convey your point of view.
* Throw Names. Earlier and more often.
If you really have big names associated with your company - customers, partners, team members - do not keep them secret for the first nine slides. Make sure that the investor learns about them at the beginning of the presentation.
But be prepared for the fact that the investor can also contact each of them, both with a private person and with a company. So, if you intend to shine with Names, it would be nice if they were real.
* Make sure you are able to tell the whole story in 10-15 minutes.
Even if you have a margin of time, the total presentation time should not exceed 20 minutes.
You want to have time to engage investors in the presentation and to discuss issues or doubts.
If you think that you have additional critical points that need to be voiced, prepare “pocket” slides that you can bring to light when such questions arise.
* Entrepreneur: average pitch - 38 slides.
Investor: medium range of attention / cranial capacity - 10 slides.
Draw your own conclusions.
* Learn how to manage the course of a meeting without looking inflexible or
Watch and listen. Body language and questions will tell you if you can postpone a moment of discussion, or should you immediately contact him.
If you allow your audience to take control of the meeting, you are likely to end up creating a confused and incomplete opinion of your company.
But, if you do not touch on the “hot” questions early and efficiently, investors will not hear anything from what you tell them.
* Do not lie.
You may find this to be self-evident, but enthusiastic about their creations, entrepreneurs tend to cross this line too often.
Please do not interpret our call to “Sell” - as an endorsement of self-promotion, exaggeration, distortion, dodging, or lying.
The best sellers are reliable and trustworthy.
The investor’s trust in you is even more important than his understanding of all the nuances of your business.
* Pitch for investors is different from pitch for customers.
If you have a sales presentation for customers, don’t think that you can just tweak it a little - and get a pitch for venture capitalists.
Start from scratch, with each slide in mind, that investors have completely different perspectives than customers.
* You do not have to be “conservative”, but you have to be realistic.
Almost every entrepreneur ceases to be realistic with respect to how much time and energy things take in the real world (compared to the world of XLS tables).
Whether it is the time to complete product development, or the time to close the next ten sales, entrepreneurs are pathologically optimistic.
As with your financial performance, find examples of comparable problems that other companies face and use this data in your model.
* Never put so much text on the page that the investor had to read it.
Everything should be short, informative and concise paragraphs, font large enough to read without squinting.
A text is simply a reinforcement of the statements you make verbally. Images, graphs and charts - should be concise and create a clear and convincing message.
If you have to disassemble them and explain them piece by piece, you risk losing the investor’s attention and his momentum.
* It is perfectly normal if your pitch presentation is unreadable when you are not around.
Never use the pitch as a standalone separate document.
This is the task for the executive summary or your business plan.
* A good pitch is a rarity.
It is very difficult to solve many difficult tasks necessary in order to create a good company. And the pitch often suffers from a lack of attention to it.
However, the ability to “pitch” is a key indicator for investors: if an entrepreneur does not know how to sell, how can he or she build a large company ??