So how do you create a successful startup pitch? This is a question that I frequently get from entrepreneurs that are seeking financing for their companies. Success in this case is getting your company financed. I think you can find some great ideas in the article, 9 Tips For More Powerful Business Presentations. In this video blog, I give some of my own ideas based on my decades of experience running and building companies.
In my experience, it is essential that you complete a strategic planning process prior to creating your pitch deck. Even if this is only a one month process, it will be one of you best investments of time. A solid strategic planning process will give you a good understanding of your target market size and growth, a clear understanding of the needs and desires of your target customers, and an appreciation of the industry structure and competitive landscape. In a great investor presentation, you’ll need to clearly articulate your product’s unique value proposition and its sustainable competitive advantage. You should be able to this succinctly. You need to clearly describe your business model, how you make money, and how you will win.
A lot of entrepreneurs will use uncertainty or a lack of time as an excuse to avoid the process of planning. This is a huge mistake. Without a clear plan and a stated set of assumptions, you might as well do shadow puppets in front of your prospective investors. As Yogi Berra says, “If you don’t know where you are going, you’ll end up someplace else.”
It is also critically important to know your audience. Do your homework on your audience. Who you are meeting with? Study their backgrounds. Play to their vanity, but don’t overdo it. You are an expert in your field. You have every right to be at the meeting just as they do. When preparing the presentation materials, keep in-mind that most investors are do not have the technical expertise or domain knowledge that you have. Even if they do, it is best to describe things in Layman’s Terms. If the investor wants to go deep, you can take them as deep as they want. Just don’t start there.
Many entrepreneurs make the mistake of talking about their product for 90 percent of the presentation. Don’t do that. Investors want to spend 80 percent of the time on the business and maybe 20 percent of the time on the product or service and technology.
When architecting your pitch deck, don’t try to recreate the wheel. Investors want information in a clear and unambiguous way. They want to get the information in a familiar structure, so they can focus on the content of the presentation. Like any presentation, an investor pitch has a beginning, a middle, and an end. As the old saying goes, tell them what you’re going to say, then say it, and then summarize what you said. Have two or three KEY POINTS that you want to convey.
In creating a pitch deck, it is important to think about Content and Flow. The content should come from your business plan. The flow should be standard and cover all the things that an investor needs to see and hear before making a decision to invest. So what should you include?
- A “Mission Statement” which explains what your business is all about.
- Include key Company Information including a short statement that covers when your business was formed, the names of the founders and their roles, number of employees, and your business location(s). Include a short bio on the key people. It is OK to put this at the end of the presentation unless you feel you need it early to establish credibility.
- Include your Growth Highlights of your business, including examples of company growth, such as financial or market highlights. Graphs and charts can be helpful in this section. Visuals can make all the difference in a presentation and most times, they explain more than the presenter themselves. It might help to check out a site like https://www.microstrategy.com/us/resources/introductory-guides/data-visualization-what-it-is-and-why-we-use-it and see why creating data visualisation in business is essential and also important.
- Give a description of Your Products/Services
- Include important Financial Information including your projected revenue and expenses. If you are seeking financing, include any information about your current bank and investors.
- Give a summary of your Future Plans. Explain where you would like to take your business, and give some Key Milestones.
The best way to start any presentation, including an investor presentation, is by telling a story. Now you can tell a joke or a story that has no relevance to your topic, but it is far better to tell a story that related directly to your business and product. The idea is to create a visceral response in your audience so that they can understand your unique value proposition at a deeper emotional level. It should convey “the big picture”.
Your presentation should demonstrate your expertise and knowledge of your market, the customers, and the competitive landscape. Clearly state your assumptions near the beginning of the presentation. Demonstrate that you have done your homework and have a clear business mode that makes sense.
In terms of flow, make sure that you verbally link the slides. In other words, provide verbal transitions between each slide. As they say, “let the slides be your guide”. Don’t read your slides, but rather use them as an outline to guide the discussion. This means simple rules like four bullets per slide and five or six words per bullet. Add something in the “voice over” that adds to the slide. Don’t be like the real estate agent that is showing an home and says, “This is a kitchen.”. I know what a kitchen looks like! Add some value!
In your summary have a Call to Action. What do you want from your audience? I doubt that you will get them to write a check to you on the spot, but as for specific follow-up actions and next steps.
Deliver your presentation with passion and energy! If you aren’t excited about your company, no one else will be! Demonstrate your knowledge and credibility. If you get an occasional question where you don’t know the answer, then commit to follow-up within a specific time. This is an opportunity for another “touch point” with the investor. Under no circumstances should you lie or make stuff up.
So, how do you deal with disruptions? Some folks may try to derail your presentation. Deal with interruptions by answering the question in a succinct way, and continue with the presentation. If you plan to cover the question in more detail, let the audience know you will cover it. Use humor, in an appropriate way, to diffuse tense situations, but only if it makes sense. In my experience, the best way to deal with “difficult situations” it to practice with a simulated hostile audience before the presentation. Football teams practice and fighter pilots use simulators. Why should you be any different?
I am not a proponent of sending slides to the audience days in advance of a meeting. Use your executive summary for that. I do advocate giving handouts at the beginning of a meeting. That is because I want people to be able to take notes, and not all the information is on the slides. There is always a concern about people looking ahead. Don’t worry about it. If you have used a consistent flow, then they will see that. If you have good slides, then they will see an outline of what you’re going to talk about. If you are super uncomfortable handing-out your slides, it isn’t a hard requirement.
In my opinion, it is not critical that the slides “stand alone” apart from the presenter. It is the presenter’s job to bring the slides to life. I think it is common, especially with technical people, to include way too much detail on their slides. It makes them harder to read, and it leaves less opportunity for the presenter to bring things to life. May presenters just end-up reading their slides.
If the presentation went well, then you should have questions. Be prepared for this. Before the presentation, prepare a list of
Frequently Asked Questions, or FAQs. Practice Q&A in advance. Again, use a hostile audience that is willing to play devil’s advocate in your practice sessions.
Do your homework. Have a business plan. Tell a “big picture” story. Clearly articulate the problem you are solving and why it is important. Describe your solution. What is the unique value proposition and sustainable competitive advantage? How big is the market, and how fast is it growing? How does your business make money? What are you asking for?
If you have further questions about how to prepare an investor presentation or other topics related to entrepreneurship, be sure to contact me. My job is to provide strategic guidance to entrepreneurs. I hope you found this helpful.
This is Patrick Henry, the CEO of QuestFusion, with The Real Deal…What Matters.