I’ve been hanging out at a venture firm this year as an Entrepreneur-in-Residence, and I’ve seen a lot of pitches to small groups and to the partners.
Mostly they suck.
I’m not really sure why people keep making bad pitches. Honestly this isn’t mystical. There are dozens of blog posts on this topic, but still entrepreneurs consistently miss the mark.
So here are a few tips. I’m trying to make the obvious explicit — first on style then on substance.
1. Learn to Present – Public speaking is a skill. Apparently more people are more afraid of public speaking than dying. To paraphrase a comic, they’d rather be in the casket than give the eulogy. Public speaking is a skill worth taking the time to learn with a good coach.
2. Practice – Any good speech requires practice — out loud and for real. There is usually a curve: the first few runs are good; then it sounds canned; then you get great and it becomes natural and fluid.
3. Plan for Questions – Most investors ask questions. I’ve seen entrepreneurs who start getting peppered with questions before they even get to their first slide. You have to anticipate that. A few steps make a big difference:
- Create an FAQ – Take the time to brainstorm all the questions you might get, and prepare short, specific answers that don’t ramble. You should never hear a question you’re not ready to answer. Investors rarely ask surprising questions.
- Make Time – Expect that at least half the time you have to pitch will get eaten up with questions. Plan for that accordingly by cutting down the formal stuff and leaving time for the constant questioning.
- Roll With It – It’s better to just answer questions quickly, clearly and confidently as they come up. Then continue with the presentation as if there was no interruption. Don’t defer questions to a slide you already have, and don’t start going out of order. Stick to your story even if there is a bit of repetition. Half the people probably missed it the first time.
4. You Are More Important than Your Content – Every time someone pitches, the first follow-up topic among the partners is what people thought of the entrepreneur, not the business. If you are clear, confident, relaxed, prepared, smart and articulate, that goes a long way. (Of course, you need a good business too.)
5. Slides are Visuals Not an Outline – PowerPoint has all but destroyed the art of public speaking. Don’t print your speech on your slides and don’t read your slides. You should have a speech memorized, and your slides should be visuals that support your speech. Because slides are what get passed around, I’d suggest interlacing the visual slides you use in your live presentation with the detail slides you expect people to read offline or put the details in an appendix.
6. Don’t Make Ugly Slides – You don’t have to win design awards, but the polish of your slides subtly communicates the competency of your business.
6. Slides should be Readable – If you can’t read the slide from the back of the room, don’t show it. Put up the summary and put the detail in the appendix. The more visual, the better they communicate emotion and content.
7. Bring Hand Outs – Many VCs like to read along and take notes so bring some nice hand outs.
8. Be Quick – The investors you want to work with are smart, and they get it. Don’t waste their time, stick to the point and move at a good pace through your content. If you capture the imagination of an investor, you will get many more chances to go deeper. Also, pay attention to their mood, and speed up when they are getting bored. Generally you don’t need those context slides about why the Internet is mainstream, etc. The investors you want should already have the fundamentals on your space.
9. Get Advice – If you’re presenting to a partner meeting, get some advice from the partner that is bringing you in. They know the landmines, the people who matter, and questions that will come up, so they can help you prep.
10. Eat First – If you’re presenting over lunch, eat before you get there and then order light and skip the food. It’s always awkward when the presenter is trying to wolf down food between sentences or worse when they start gagging in the middle of a key point.
Assuming you can nail the style points above, then you need decent content. I’m not sure why we see so many decks organized in so many different ways. Obviously, there is no one way to present a business. But looking at it from the perspective of the investor, this pattern generally works well:
1. Intro Company – Give us the bumper sticker: What is this business in a sentence or two? Investors see hundreds of companies; they have ADHD; and they easily get confused. Get us centered on who you are with a few clear sentences that summarize your business. Vague taglines don’t help.
2. Intro – Introduce yourself and your team. Don’t dwell on what you did in high school, but hit some highlights that communicate your strengths, and why you are uniquely suited to lead this particular business. This is a great chance to tell a short story that segues into the next section.
3. Customer – Introduce us to your customer. Not your market, but your actual ideal customer — the person or company + people that will buy your product. Tell us about the people you are actually going to serve.
4. Explain Their Burning Pain – Your product is a solution to some burning problem or need. If it’s not, why bother? It’s something that your customer can’t possibly live without. Before we can grok the brilliance of the product, we need to understand why your customers will give a damn.
5. Product – Blow everyone away with an amazing demo (real or fake). Leave us wow’d by your piercing insights and the remarkable way your product is going to address that burning pain your customers are feeling.
6. Market – Convince us with empirical data that there are a lot of customers that look like the one we met at the beginning of the presentation. But don’t bullshit on this. You need to be able to define the actual addressable market, not the imaginary one. Definitely don’t say “the market is huge and we only need 1% to be a hundred million dollar company.” No company ever wins with 1% market share.
7. Competition – Everyone has competition, or they don’t have a market. Don’t say you won’t have any competition. Instead focus on how you’re creating unique, sustainable differentiation that will let you crush your competitors (the ones today and the ones that will enter the market when you prove it’s giant). This is one of the most important points in the presentation.
8. Go-To-Market – The best carbadingulator will not be a business if you don’t have a good way to reach customers and sell it to them. Basically this comes down to what it’s going to cost to acquire customers vs. what you’ll earn from them. Most investors are looking for the big pattern: do you need an expensive sales force or key channel partnerships or an online marketing engine, etc. This very much shapes the way the whole business team needs to be put together.
9. Financials – Now give us the basic numbers: historicals if you have them, four quarters from the financing, plus roughly four years of annual projections. For most companies there is a lot of guessing involved. Everyone knows that. The point is to tell a story about what is possible with awesome execution. Also, summarize this at a high level. We don’t need that budget detail now. Everyone will pay attention to revenue, gross margin, net margin, and cash burn, but they don’t care what you’re paying for pencils.
10. Financing – Summarize how much you are trying to raise and why. It’s very important to explain specifically and concretely (e.g. timeline with milestones) the value that will be created with this round of financing. Investors need to be convinced that if they put money in now, the next time you raise money the company will be worth a lot more, which means something material has to happen with the money you raise now. It’s also very helpful to explain how you see future financing events coming together to get the company to profitability.
11. Why This Investor – Every investor thinks they’re special. They have unique experience, talent, and portfolio companies. It is very helpful if you can say specifically why you want to work with a firm or investor. This can’t be fluff. It should show that you’ve done your homework and you understand the value that a particular investor could bring to the company.
I know this content is redundant with a lot of other posts, but I’m also surprised at how often I see pitches that are simply not that good, even when the business itself holds promise. Hopefully this will help to raise the standard a bit, or at least be useful to people raising money.