About to pitch your big idea to an investor? Just make sure you know your elevator pitch from your executive summary.
A seasoned Silicon Valley venture capitalist was recently asked what were the biggest mistakes that entrepreneurs made when pitching to investors.
Not surprisingly, the list was a long one.
With a steady stream of bright-eyed hopefuls walking through his door, the tech investor has seen plenty of big dreamers miss out on big funding because of pitiful presentations.
So, what makes one presentation better than the next? What do you have to do to get an investor reaching for the chequebook instead of reaching for the door? Here are some of those big mistakes that our Silicon Valley investorsaw far too often (and a few of our own as well).
Start with a Bang
In an era of short attention spans, bright shiny new things and a never-ending supply of hungry competitors ready to take your spot, you’ ll need to make a first impression with punch. Instead of opening with pleasant formalities, start with something memorable. Tell a story, ask a provocative question or share a startling statistic. Kick off proceedings with your infectious passion instead of staid facts and figures.
Nail the Elevator Pitch
Have you refined your pitch to a well-crafted, succinct attention-grabber? Anything longer than a minute and you risk losing your audience’s interest. If you can’ t explain the importance of your business in a minute or less, then maybe you aren’ t clear yourself about what you’ re doing and why you’ re doing it.
Before you launch into the details of the business, talk about the essence of what you are doing; why it’s a good thing; why the world needs it; and why you have the passion for making it happen.
Death by PowerPoint
A lot of experts and creative types will tell you that PowerPoint is a dead duck, and you should avoid such old-fashioned methods of presenting. But go with an investment presentations that excites and inspires what feels right. If the presentation is snappy, gives all the relevant information and looks good, PowerPoint will still do the trick.
If you’ re looking to pimp your presentation, there are other options out there. Animoto allows you to create custom videos easily. Sliderocket among other things, allows you to share presentations easily on the cloud and Slidedog allows you to add in just about any media including pdfs, web pages and movie clips.
No investor worth their salt is won over by a pretty presentation and your witty repertoire. The ‘ guts’ of your presentation should contain an analytical and believable explanation of how an investment in your startup will make its investors rich.
Make sure you include:
A well-written executive summary that covers key concepts including the problem the startup is solving; the size of the market; expected revenues, the management team and exit strategies.
Expected financial and operational results that appear in metrics relevant to the specific investor. This will differ depending on what type of investor youare talking to, so make sure you know what matters most to them.
The exit strategy. When considering the potential of a startup, most investors want to see returns in the short-term, around 3 – 7 years. Addressing how the startup will be monetized in the short to medium term will speak directly to their interests.
A plan for how you will use funds. Investors want to see that you have a specific action plan for how you will use funds or resources. If funds are heading to recruitment, marketing and operations, provide detail on this.
A Lean state of mind. Your big, ambitious plan may require huge amounts of funding, but it’ s unlikely that investors are interested in anything that significant at the initial stage. Take a page out of the Lean Startup book and only ask for what is needed to fund initial stages. And no more.
There are a few dos and don’ ts for presenting that we’ ll file under ‘presentation etiquette’. Just as important as having an elevator pitch to impress, is having the manners to match.
- Leave your pride at the door. Give respectful consideration to an investor’ s questions and suggestions.
- Listen. Do we need to say anymore?
- Include moments for discussion in the presentation. Make it feel like a conversation rather than a presentation
- After the presentation, contact each person and thank them personallyfor their time.
- Don’ t expect a quick yes or no. At this early stage, it may only be a “maybe”.
- Time is money. Keep your presentation to 15 minutes or less. By the time you do a meet and greet and make small talk, you’ re looking at half an hour of the investor’ s time. More than enough.
Busy investors are more likely to remember a presentation that excites and inspires them. They are more likely to remember a story than the facts and figures.