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Thursday, April 17, 2014

How To Craft A Concise Pitch Investors Will Care About

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This post by Bing Gordon first appeared in Fast Company, 4/17/14

Over the course of many years working in venture capital and the video game business, I’ve listened to hundreds of pitches for new companies and products.

After almost every one of those pitches, once the entrepreneur has left the room, a post-game review ensues. There are consistent patterns in those discussions; aspiring entrepreneurs, pay attention.

The first and most important element of your presentation is not a slide: it’s you. Most investors base their decisions on the passion, charisma and clarity of the founder and the rest of the senior team. If you don’t demonstrate true fervor for your idea and opportunity, don’t expect anyone else to, either. Beyond that here’s what you should consider when crafting your pitch.

MAKE THE FIRST SLIDE COUNT
Initial ideas don’t necessarily prevail, but lack of focus leads to failure and underachievement. Which also means: time is of the essence. Don’t waste a slide on a lame table of contents or meeting agenda. A business pitch is not like Disneyland; potential investors shouldn’t have to wait for the good stuff.

You need to keep your slides tight. As soon as somebody presents a single extraneous slide, people drift. You can lose the room on the first slide. Skip the background materials. The longer it takes you to get to the meat, the more it feels like you’re covering up for something.

Describe your business in simple declarative statements, with strong verbs and valuable nouns. Skip the adjectives and adverbs. Work at boiling complex opportunities into clear and simple actions. Keep it simple.

And remember, you’re in business. Business runs on salesmanship, creativity and numbers. Make the numbers tell your story. For some investors, it will be the first slide they actually concentrate on, so make it good.

ASK THE QUESTIONS INVESTORS WILL
Once you’ve left the room, we’ll list plusses, minuses, unanswered questions and big risks. Knowing that there will never be more than about a dozen takeaways, you can shape your presentation accordingly.

-Do you seem like a great entrepreneur?
-Who is the competition and how do you stack up?
-What are your team’s assets?
-What have you accomplished to date?
-How well have you managed your resources?
-How big is the market you are targeting?
-How protected can your business be?

THE FOUR SLIDE SHELL
Some people will find it difficult, but you need to avoid massive slide decks. Less is more. You can deliver an entire pitch with four slides. Here’s how:

The first slide what I call “the movie poster,” which lays out the core idea behind you business idea in a clear, powerful way. It should be something you can blow up to poster size and hang up in the office lobby. When in doubt, show your target customers living a better life because of your product.

The next slide lays out the five most important strategies you intend to employ. These should be original, or at least an original combination of ideas.

Slide three lays out your five most important assets. These are the things that justify your pre-money valuation: team, code complete, design complete, IP, contracts, traction, revenue growth, etc. Better yet, you can actually benchmark most of these components by asking around. Most of these: valuable. Product/market fit: priceless.

The final slide tells the story in numbers, from where you are now to long-term success.

Four slides, each powerfully structured:

-Every slide should have one important topic.
-Every bullet point should have one good idea.
-There can be no extraneous or unclear words.

The deck isn’t everything; you’re also going to need to do a demo:

-Be a missionary for your product. Now is the time.
-Start at the start, with the first time user experience. You want your audience to project themselves as users of your great product.
-Illustrate the strategy and assets that you claimed on slides 2 and 3.
-Your Graphic User Interface (GUI) and wireframe should reinforce your strategies with “ownable” nouns and verbs on the GUI, tabs and buttons (e.g., Friends, Follow, Badges).

Everything else goes in the appendix.

Also, watch your audience. You want them to “lean in” on your movie poster, smile at your strategies, nod at your assets and agree with the assumptions in your numbers. You want their fingers to itch to touch your product as demonstrated. You want them to applaud honestly. And then, like a great businessperson, ask for the order.

If it’s a fit, they will ask you questions you hadn’t thought of, give you advice that helps, and make you a better entrepreneur than when you walked in. It’s not just about the money.

Good luck.

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