This is the second post of the serie “How to make a perfect pitch”. If you’ve missed the first part last week, here it is. This week, we’ll discuss more about the Pitch structure.
As you already know, you just have limited time to make the investor enthousiastic on you or your project. On average:, you just have 5-7 minutes to present your project. That’s quick so you’d rather be effective and not wasting any pitching opportunity. The first 30 seconds are crucial, as it will determine if your audience will really listen to you (or just reading their emails or play on their smartphone instead).
You’ve probably already heard about Guy Kawasaki’s 10/20/30-rule, which is now really common:
- 10 slides
- 20 minutes (5-7 minutes presentation, 13-15 minutes Q/A)
- 30 minimal font size
I’d like to share with you how a compelling presentation could look like on 10(+1) slides:
- Title: this first slide gathers every contact information (people hate loosing time searching such crucial information) and who’s speaking, the logo of the company (trivial, but I’ve seen people forgetting it) and the on which occasion (event + date) you’re presenting. Moreover, display your high concept pitch here: if you have to wait before starting the pitch, people already know what you’re talking about and can prepare mentally on what you’ll telling next.
- Problem: describe what plausible problem you’ve identified and whose concerned by this. Where is the customer pain and what can happen to him if you don’t solve it? Are you really sure that status quo is a real problem? Use pictures if you can…
- Solution: show the uniqueness and innovation of your product/service (and show it when already possible)! What kind of value are your offering to the customer? Display your USP (Unique Selling Proposition) but don’t exaggerate: if you display more than 3, you lose your credibility.
- Magic Sauce: here and only here can you describe the technology behind your product. Often, hightech startup founder lose themselves talking about technology, so don’t make the same mistake! Try to explain it with pictures and diagrams, the less words the better! Show Proof of Concept, your IP strategy (do you have patents? Don’t forget to mention it even if in software domain, you’re not really protected… investors love to be reassured that’s there’s a “real” technological innovation)
- Market potential: show the size and expected growth of the adressable market (always give information source (market research studies) if applicable). You often have to evaluate it with your own assumptions – top down approach is always dangerous (“only 1 % of the market”). And show your target market (OK, you’re targeting a worldwide market… but wake up now, you probably have to go step by step and don’t have the resources to push your product everywhere from day one). Display you “go to market” strategy here and some reference customers if applicable.
- Competition: present how the market lives without you, how it is structured, your competitors and the competing technologies. No competitor, really? Are you sure there’s a market then? Rather than showing the weaknesses of the competition, show why you’re good and the cost savings / the additional turnover for your potential customers.
- Value Chain & Business Model: make it clear how it works, how the money flows, show who are your partners (use their logo). And display clearly onetime and recurring revenue.
- Implementation roadmap: if you can show it as a timeline, do it! What are your achievements (customers, IP, technology, partnerships, R&D project) and on what you’ll be focusing your efforts during the coming months (respectively: after funding). Include concrete milestones but show only what’s important for investors (for instance, investors don’t really care about non-value adding stuff like your desk!).
- Team (+Board of Directors +advisors): show why you’re the right team to execute this project. Display a quick CV (name, function, education, experience) with picture of founders/key employees. Don’t try to display everyone (even if every team member IS important) as you’ll lose the impact. If you already have a BoD and not only composed from founders: GREAT, it shows you’re surrounding yourselves! And known advisors (academics, entrepreneurs, etc.) give you an additional credibility (you’re not developing your startup in your cellar without talking to people!).
- Financial overview: don’t display everything, only 4 metrics are looked by investors here: sales, EBIT (Earning Before Interest and Taxes), cumulated Free Cash Flow (that is, your capital need), FTE’s (Full Time Equivalent). Please avoid graphs, investors can read numbers! Show your financials in a matrix (maximum 20 fields: 4 lines (the above metrics) and max 5. years).
- Financial offering: who current owns your company? Display your financing rounds strategy (be realistic: raise money for 18 months, as raising money often takes 6-12 months – so beware to have 12 months to work on your product!) and your exit strategy (please, don’t tell me IPO – who could rather buy you?). It’s really common that investors (or at least Business Angels) ask your valuation upfront, but I’d advice you not giving it upfront. Rather tell 1mio financing for 10-30% of the company: don’t overestimate (forget what you’ve learnt at business school, like discounted cash-flow, etc.!) but show that you’ve deeply thought about this, and try to keep a negotiation “power” (most of the time, you need the money, investors can survive without investing, so there is kind of an asymmetry that is not for your own sake). By the way, for early stage startups, you have always to be open to give 10-40% of your company. It’s almost project agnostic and depends of your financing need. Investors make their calculation with a potential buy-out (if you’re pitching 10M: minimal exit is already 10-12 million and that’s unfortunately already not so likely for most projects… and if you’re not on the market with some good traction, you just loose credibility. If you give “5% too much” to your investors… who cares? You have the money to keep going, you’re aiming big… if you have success, that won’t matter… and if you fail, you’ll not losing more anyway!
Your absolute last slide (OK, that’s no more 10+1!) should be a Q&A slide, where you have links to the presentation (presented slides as small pics) and to backup slides (like a detailed financial plan, patent, Marketing Plan, customer list). Display rather pictures of the slide than links.
You can also take the opportunity to give hand-outs to the investors in the audience, and you’d rather distribute it before start. There is no need to spend lot of money for this and can keep it simple (black and white, 2 slides per page printed both-sides is OK), as you’d show potential bad signals (focus on your project rather than paper) and investors rather would have less paper (they’ll receive a lot of documents from others startups, for instance). The document you’re distributing can have more info than at the presentation… and it’s better, as they’ll take it home to read it again quietly!
Last but not least, here are some details that could seem silly but that you need to put on your presentation:
- Add your logo on the slide master (small) and first slide
- Include page numbers
- Use only one level of bullet points
- Add diagrams, pictures and graphs (except for financials)
- Use one (1 only!) standard font (and which works on any PC)
- Watch out for ABBR. (abbreviations), write them out
- Animate your body and your hands, not your slides!
Next post of this topic (“The soft skills you need for a great pitch”) will be published next Monday, so don’t forget to register (per email), follow me or sign up to my newsletter to receive the post!
Again, a great thank you to Jean-Pierre Vuilleumier, who we have to give a big credit for a great part of the tips shared here.