Preparing your Pitch
Preparing your Pitch
“ If you had one shot, one opportunity to seize everything you ever wanted. One moment. Would you capture it, or just let it slip?”- Eminem
How do you make your pitch deliver?
Put yourself in the investor’s shoes. Why are they there and what do they need to know to have an active interest in talking to you further? Remember, they hear lots of presentations, don’t really care about the product or service and are really interested in the risks and rewards for their investment.
Debate rages about how long or short a presentation should be, how many slides and how many minutes a presentation should take.
You have a limited time to present (whether it is 3 minutes or 5 or 20, it will still seem too short), so think about every word and rehearse it well.
Steve Jobs, an expert of presentation once said, "People who know what they're talking about don't need PowerPoint." However he always used a slide presentation in his famous product launches.
The PowerPoint presentation has become the accepted delivery media. There are some other tools that you could use, but these risk looking too smart. Do not distract the attention of your audience with a ‘sound and light’ show.
Keep it simple, clear and concise.
If you had to describe your company’s mission in a single sentence, what would your pitch read or sound like? One suggested way to summarise what you do and boil it down to one clear sentence is following the advice of Founder Institute founder Adeo Ressi.
This is what he suggests: “my company, _(insert name of company)_, is developing _(a defined offering)_ to help _(a defined audience)_ _(solve a problem)_ with _(secret sauce)_”.
Perhaps you can do it within the 140 character limit of Twitter, as has been suggested by others, but it is a bit lean to be meaningful as a full presentation!
Guy Kawasaki, author and past chief evangelist of Apple, coined the 10/20/30 Rule of PowerPoint. A presentation should never be longer than ten slides, should never take more than twenty minutes and never use less than thirty-point font.
Between the two of these, one page or ten, feels about right.
What you need to get across is your vision, strategy and tactics.
Importantly, make sure everything you say is consistent with what you have written in your Business Plan.
One thing that turns Angels off immediately is being told “I’m passionate about my business”. This should go with out saying. Just show it instead of saying it. Demonstration of passion is far more important. Angels are more interested in your commitment strategy! (read more about this here)
Many investment pitches try to have more than one speaker. This is generally distracting and rarely works as a positive impression of a team. Pick the strongest member of the team, hopefully he is the CEO, and let them get into their own rhythm.
An important cliché that is often forgotten is that first impressions matter. They do! Remember this is your one shot at this audience. Dress the part, look and act the part.
Don't look as if you are wearing the shirt you woke up in. Clean your teeth. Bad breath has sunk many an important relationship.
Keep in mind that without a highly probable exit event, Angels don’t get their money back and don’t achieve a return on their investment, so don’t forget about the exit. However don’t just say “the exit will be a trade sale in 3 to 5 years” because someone told you angels want to know about the exit.
Engage the audience by telling a story. Even in the shortest of presentations you have time to tell the audience how you came to find the problem, solution and build the team you have today. This brings relevance and context to what you are trying to explain.
Be positive in what you say. Don’t use weak and indefinite phrases. You are doing, not thinking about or believing. You know something based on assumptions that you can verify and explain.
“It usually takes more than three weeks to prepare a good impromptu speech”
- Mark Twain
Practice in front of a mirror, your partner, your colleagues. Practice until you can do it from memory. Then relax and forget about it. Unless you are a gifted public speaker, you will be nervous and that will help you show you are human. Practice will also help you keep aware of time and the pitch within the allocated slot.
Unless you are blessed with some amazing comic abilities keep the humour to yourself. Humour rarely captures an investor’s attention and often leaves you looking foolish and clumsy.
The ending needs to be strong. It needs to reinforce your key messages. It needs to be concise, convincing and clear.
What should your pitch cover?
While there is no ‘one size fits all’ presentation, the basics should include the following:
- Introducing “Me and My Business”
Who are you, what is your position in the business and what is the name of the business. You should be able to state what your business does in a few sentences.
- The problem or the need you address?
It is surprising at how often the question ‘What problem are you solving?’ remains unanswered at the end of a product presentation. Don’t stop at the features and functions, how it beats the competition and that customers love it, explain what problem or need it addresses.
The key is to explain why customers need the product. What pain are you addressing? What need are you satisfying? Why can’t the customers defer, delay or avoid buying it? What evidence do you have that your solution is effective and that customers will buy it at the price you propose?
- Who is the customer?
Who is the customer and why do they need it? How do you put yourself in front of your target customer with a compelling proposition?
- What is your competitive advantage?
A strong competitive advantage means that you solve the problem better than anyone else and that customers with that need or problem prefer your solution. You also need to demonstrate that you can protect your advantage over time through some registered IP (patent, brand, copyright, license, trademark etc) or a level of deep expertise that is difficult to copy, mitigate, develop or acquire.
The first 4 points above could be addressed on a slide by Ressi’s single sentence mission statement described above. The detail can be told within the story.
- How big is the market?
Evidence is required about the number of potential buyers, the manner of distribution and the conversion rate of prospects to sales.
- What is your distribution strategy?
How are you going to distribute the product and put your product or service in front of your target customer? There are a variety of strategies which can be used; direct sales, internet, retail, wholesale and manufacturing license.
Which ones will you be using and why do you think they will be effective in meeting your revenue and profit targets?
- Who is going to do the work?
Who is on the management team? What are their qualifications and experience and which positions need to be filled for you to deliver on your strategy? Why do you think this team is capable of achieving the milestones and exit outcome? It is OK to have an incomplete management team but you should show how you plan to fill those vacant positions.
- What is your exit strategy?
Unless you have an exceptional high growth venture that could achieve an IPO, your business will need to be sold in a trade sale to achieve an exit.
What is your target exit date? Which companies have you identified who would be interested? Why would they buy your business?
The angel may not believe any of this but it will show how you have thought about it. I repeat I am more interested in your commitment strategy.
- What do you need to do to achieve the exit?
What are the milestones you need to achieve and tasks you need to complete to succeed in a trade sale or IPO event? This might include product development, proof of concept, revenue targets, strategic relationships and so on. If the exit is a trade sale, you should have selected the potential buyers, have a plan to approach them and understand why they would want to acquire your firm.
- How much investment do you need?
How much funding do you need, when do you need it and what is the money going to be used for? You need to show a summary of the next 3 years financial projections along with any current and prior year management accounts.
Be prepared! You may expect to have 20 minutes to present and then be told you have only 5 minutes. You may anticipate doing a formal presentation to be told that they only want a short description of the investment proposal.
Meet the team
Indycube Ventures offers funding and expert advice to entrepreneurs. Entrepreneurs and small-business owners based at coworking space network Indycube are being offered access to a half-million-pound annual funding stream and expert advice.
"We have benefited greatly from David's experience, counsel and contacts on a wide range of issues. His past experience in the IP space is particularly useful to Inngot, but even without that, he is just the sort of investor and non-executive director a high growth business needs. He sees potential, makes connections, and keeps us focused on the things that matter."Martin Brassell, CEO, Inngot Ltd