Good VC pitch presentations
A copy of a new section I wrote for my corporate web site.
In the very beginning, the only asset a startup has is often the VC pitch deck. Here are some suggestions for designing good VC pitch presentations. In the end I will list some of the resources you can tap in. There is a lot of information and advice available about startup pitches.
Different pitches for different meetings
There are different investor presentations in a fund raising process. There is the line up in a big conference where everyone has 1 minute to pitch (not very effective). There is the 10 minute phone call, the 20 minute coffee chat. The first meeting at the VC office, the presentation to the full partner group. Prepare your story and deck for each situation. As you go through the investment process funnel, your story will shift from talking about what the company is about, to how the company will do it.
Do a pitch without a deck
Practice a 20 minute pitch without slides in front of a friend. Record yourself, listen to your self. What sequence did you use to tell your story? What examples did you use? Where did you have the urge to take a piece of paper and sketch a framework? Where were you tempted to open your laptop to show a detailed chart with financials? All this gives you a clue about the sort of visuals you need to support your natural story.
It is about you
When an investor looks at entrepreneur, 50% of the attention will go to the content of the presentation, the other 50% will be spent on making a personal assessment of you, the presenter. Are you a good person to work with, who takes input from a Board? Do you have a sense of realism? Are you fired up for the roller coaster ride or hedging by keeping your day job? Can I trust you? Can you actually sell? Can you pull it off? These are all questions that cannot be answered by the slides you are presenting, they are answered by reading in between the lines.
Explain what you do
Very early on in the presentation, tell the investors what you are actually doing. Otherwise, they will be guessing and guessing in their minds what your talk is actually about. And people who guess do not pay attention to the content of the presentation. Do not be afraid to compare yourself to existing companies technologies in the market. This does not say that you are a me too, it just serves enables investors to put you in a box and understand in what market context you are operating.
Cut the buzz words
Buzz words, jargon. Experienced investors will see through it immediately. They get bored, and you lose maturity points. Talk like a person without verbal padding.
Sell the problem not the solution
Investors need to believe that there is a big potential market out there for your product. The best way to do that is make them feel what the pain in the market is. This is much more powerful than spending a lot of time on the solution.
Use interesting slides
Ditch the bullet points. Big fonts. Big images. The last thing you want is to bore the audience. Investor pitches can usually be bold and creative, especially for the first section where you sell the problem. Remember that it is not the number of slides that counts, it is the time it takes you to go through them.
Slick does not equal good
Having very sophisticated graphics and animations usually does not add to fundability of your business. Usually, sophisticated graphics do not add much to the story (if they are just background visuals that are repeated on every slide). Even worse, they could show poor judgement (spectacular animations do not come across well in a serious VC partner room). And even worse, it could give investors the impression that you are trying dress up the bride (a bit too much). Think about that car sales man with en expensive but poor taste suit and a heavy after shave. Do you trust him?
Be realistic about the competition
Any business has competition. Talk about them. Be realistic. And show how a seed startup can beat them to it. Acknowledge that it will be difficult, but that you have good odds. You will score a lot of realism points by doing this.
Address your weakness
Address the issue that is obvious with your company. Maybe it is a junior team, maybe it is a big competitor. Not that you need to blow it out of proportion and undermine your own story. The other extreme, not addressing the elephant in the room will not get you any investment either.
Do not skip the technology
An investor audience is usually intelligent. Skipping the technology is insulting them. Skipping it shows that you are unable to explain/sell your product to an intelligent audience. And finally, at this early stage of the company, the technology is probably the only distinctive feature that you have.
Transparent, simple estimates
Data provided by market research organizations saying that the market for x will be $1bn in 5 years does not really help you. Far better is a very simple and very transparent estimate of your market. A simple multiplication of 5-10 factors that you can scribble on a white board. The same is true for the company forecast. Everyone will put $50m as a revenue target for year 5 on a slide. You need to convince an investor that this number is optimistic (points for being a fired up entrepreneur), but not totally impossible. Again, this can best be done with a simple multiplication: what would you have to believe in order for this to be true.
No live demo in short meetings
Demos can go wrong because of stupid practical issues. Demos can take time (moving around menus, setting things up). These are all the wrong ingredients for a short pitch that builds up momentum to the final slide. Instead, use a pseudo-demo with a sequence of screen shots that shows investors what the product is about. Mention that you have a live demo and invite them to a separate meeting to play around with it.
Practice, practice, practice
Steve Jobs takes 3 full time days to rehearse his keynote speeches. You should practice as well. Strangely enough, it takes practice and rehearsal to be able to be spontaneous. Time your presentation and check that you can stay safely within the time slot you have been given.
Tap into the resources available on the web
Over the past years an enormous amount of information has become available about pitching to investors. Mark Suster is essential reading (posts about raising venture capital, posts about pitching VCs.) David Rose has recorded a classic TED video on investor pitches. Dave McClure has his own distinctive style of suggesting ways to improve your pitch. I have been posting extensively about investor pitches on the blog over past 3 years, see the investor pitch category here, or browse through a deck I prepared with presentation lessons for entrepreneurs. Quora is a new question and answer site with direct participation of some the world's most famous investors, see the investor pitch section here.
In the very beginning, the only asset a startup has is often the VC pitch deck. Here are some suggestions for designing good VC pitch presentations. In the end I will list some of the resources you can tap in. There is a lot of information and advice available about startup pitches.
Different pitches for different meetings
There are different investor presentations in a fund raising process. There is the line up in a big conference where everyone has 1 minute to pitch (not very effective). There is the 10 minute phone call, the 20 minute coffee chat. The first meeting at the VC office, the presentation to the full partner group. Prepare your story and deck for each situation. As you go through the investment process funnel, your story will shift from talking about what the company is about, to how the company will do it.
Do a pitch without a deck
Practice a 20 minute pitch without slides in front of a friend. Record yourself, listen to your self. What sequence did you use to tell your story? What examples did you use? Where did you have the urge to take a piece of paper and sketch a framework? Where were you tempted to open your laptop to show a detailed chart with financials? All this gives you a clue about the sort of visuals you need to support your natural story.
It is about you
When an investor looks at entrepreneur, 50% of the attention will go to the content of the presentation, the other 50% will be spent on making a personal assessment of you, the presenter. Are you a good person to work with, who takes input from a Board? Do you have a sense of realism? Are you fired up for the roller coaster ride or hedging by keeping your day job? Can I trust you? Can you actually sell? Can you pull it off? These are all questions that cannot be answered by the slides you are presenting, they are answered by reading in between the lines.
Explain what you do
Very early on in the presentation, tell the investors what you are actually doing. Otherwise, they will be guessing and guessing in their minds what your talk is actually about. And people who guess do not pay attention to the content of the presentation. Do not be afraid to compare yourself to existing companies technologies in the market. This does not say that you are a me too, it just serves enables investors to put you in a box and understand in what market context you are operating.
Cut the buzz words
Buzz words, jargon. Experienced investors will see through it immediately. They get bored, and you lose maturity points. Talk like a person without verbal padding.
Sell the problem not the solution
Investors need to believe that there is a big potential market out there for your product. The best way to do that is make them feel what the pain in the market is. This is much more powerful than spending a lot of time on the solution.
Use interesting slides
Ditch the bullet points. Big fonts. Big images. The last thing you want is to bore the audience. Investor pitches can usually be bold and creative, especially for the first section where you sell the problem. Remember that it is not the number of slides that counts, it is the time it takes you to go through them.
Slick does not equal good
Having very sophisticated graphics and animations usually does not add to fundability of your business. Usually, sophisticated graphics do not add much to the story (if they are just background visuals that are repeated on every slide). Even worse, they could show poor judgement (spectacular animations do not come across well in a serious VC partner room). And even worse, it could give investors the impression that you are trying dress up the bride (a bit too much). Think about that car sales man with en expensive but poor taste suit and a heavy after shave. Do you trust him?
Be realistic about the competition
Any business has competition. Talk about them. Be realistic. And show how a seed startup can beat them to it. Acknowledge that it will be difficult, but that you have good odds. You will score a lot of realism points by doing this.
Address your weakness
Address the issue that is obvious with your company. Maybe it is a junior team, maybe it is a big competitor. Not that you need to blow it out of proportion and undermine your own story. The other extreme, not addressing the elephant in the room will not get you any investment either.
Do not skip the technology
An investor audience is usually intelligent. Skipping the technology is insulting them. Skipping it shows that you are unable to explain/sell your product to an intelligent audience. And finally, at this early stage of the company, the technology is probably the only distinctive feature that you have.
Transparent, simple estimates
Data provided by market research organizations saying that the market for x will be $1bn in 5 years does not really help you. Far better is a very simple and very transparent estimate of your market. A simple multiplication of 5-10 factors that you can scribble on a white board. The same is true for the company forecast. Everyone will put $50m as a revenue target for year 5 on a slide. You need to convince an investor that this number is optimistic (points for being a fired up entrepreneur), but not totally impossible. Again, this can best be done with a simple multiplication: what would you have to believe in order for this to be true.
No live demo in short meetings
Demos can go wrong because of stupid practical issues. Demos can take time (moving around menus, setting things up). These are all the wrong ingredients for a short pitch that builds up momentum to the final slide. Instead, use a pseudo-demo with a sequence of screen shots that shows investors what the product is about. Mention that you have a live demo and invite them to a separate meeting to play around with it.
Practice, practice, practice
Steve Jobs takes 3 full time days to rehearse his keynote speeches. You should practice as well. Strangely enough, it takes practice and rehearsal to be able to be spontaneous. Time your presentation and check that you can stay safely within the time slot you have been given.
Tap into the resources available on the web
Over the past years an enormous amount of information has become available about pitching to investors. Mark Suster is essential reading (posts about raising venture capital, posts about pitching VCs.) David Rose has recorded a classic TED video on investor pitches. Dave McClure has his own distinctive style of suggesting ways to improve your pitch. I have been posting extensively about investor pitches on the blog over past 3 years, see the investor pitch category here, or browse through a deck I prepared with presentation lessons for entrepreneurs. Quora is a new question and answer site with direct participation of some the world's most famous investors, see the investor pitch section here.