Date: Tuesday , March 05, 2013
How do you make an awesome pitch to investors and mesmerize them with your story? You may have already heard it many times that your slide deck should not consist more than 10-12 slides. This deck must have key elements of your business plan such as market opportunity, team, innovative technology solution, unique selling point, your creative go-to-market strategy and plan, business model to make money, and funding requirements. Essentially, to win over the hearts and minds of investors, your pitch has to be able to narrate a clear, exciting and impactful story to awe your investors so you can walk away with a term sheet for investment in your company. The story must have the following four key take away (4KTA) points in an awesome pitch.
Many entrepreneurs talk about team in one of the last slides. My suggestion is to talk about it right in the beginning because for an early stage company, the team is a major factor that investors are betting on. Make it crisp, relevant and focus on one or two related accomplishments of each team member showing that you have a winning team. Don’t waste time in sharing everyone’s life story. You have to be able to convince them that you have a team which can execute on exploiting this market opportunity. The investors must believe that you have assembled a core group of brilliant and world-class talent that can execute the next set of milestones. You must also be able to convey this team can attract next set of A+ talent with complementary skills and domain expertise and help you fill any gaps that exist in the current team.
In my view, market opportunity is another significant element. It better be a huge market opportunity so you can excite the investors. Explain how it can help the investors make tons of money and create a hugely successful company. Create your story so exciting, compelling, and captivating that investors are glued listening to you intently while you are pitching to them. Combine it with facts and figures while exhibiting your in-depth knowledge. Articulate boldly that there is gigantic problem already there now or it is emerging due to arrival of various factors globally or technologically or whatever it may be. You are absolutely passionate about solving it since it represents a massive and once in a life time market opportunity. Explain clearly that you understand the market nuances and dynamics surrounding it precisely. Elaborate on how this problem has become suddenly so gigantic and why it is the right time and further, it can be solved. You and your team are capable of exploiting its full potential and turning it into a hugely successful company. Large and disruptive markets are extremely appealing to the venture capitalist (VC) community since these can help them create sustainable and large companies and make home runs for their investment.
Make sure to collect market opportunity data from ground up validating your comprehensive understanding and knowledge about the customer prospects. Avoid your analysis merely from the analyst reports. Showing a pipeline of customers and strategic partners interested in your solution can make your story even more compelling. Focus on disruptive elements of your go-to-market strategy. Any unfair advantages that you already have such as a large leading vendor interested in making strategic investment and being a distributor of your product would be a real plus.
– This section consists of solution and unique technological invention and innovation that your startup has created. I believe that a startup cannot survive unless it has some unique and unfair technological advantage. The simple reason being unless you have some innovative technical advantage, it will be hard for you to get early adopter customers and investors to bet on your opportunity. Make sure to clearly articulate how your technology solves customer’s problem. What are the secret ingredients of your solution that the other companies can’t copy in a reasonable amount of time? Articulate any unique combination of proprietary technology, your brilliant team with domain expertise, and any unique partnerships that you may have.
How do you intend to stay ahead in the market once you launch your product? How do you keep your innovation machine running so you end up being the leader holding maximum market share? Believe me there will be competitors who will show up as soon as you announce your product. One way to talk about your solution is to talk about existing solutions and your differentiators. Explain how you are disruptive and fit nicely in the value chain that currently exits. It’s easier to sell a solution that fits into existing value chain and at the same time, provides a roadmap for the future. Narrate clearly and quantify key benefits, especially how a customer gains more revenue or reduces cost. It must be 10X or better. The best way to convince an investor about technology benefits is to have referenceable customers who can rave about your innovative technology and solution.
– This section of the pitch must cover everything related to financials including your revenue strategy, go-to-market plan and business model. How much capital would you require to get to next milestone? You need to outline your roadmap for funding requirements and milestones associated with each stage of funding. Explain these milestones clearly and crisply tied to your financial projections. Finally, present a summary slide outlining the core value proposition that an investor can remember and is unique to your company. This is a good place to reinforce your tagline or one line phrase that captures the essence of your value proposition to your investors. Always remember this whole pitch is about selling your investment proposition.
In summary, you must focus on what investors are usually concerned about. These are essentially the four key take away points - your team, market opportunity, technology including solution, competitive landscape with the potential for you to be a winner and financials including capital requirements to get to the winning stage. Finally, remember the quote, “Practice makes a man perfect.” Therefore, practice, practice, practice and dress professionally. Good Luck!
Naveen Bisht is Co-Founder of Auriss Technologies, Inc, a serial entrepreneur and Board Member, Chair- Programs, The Indus Entrepreneur(TiE) and member of TiE Angels Steering Committee, based in Silicon Valley, California.