You have your elevator pitch hard-coded into your brain, ready to whip out at a moment's notice. Now it's time to consider your investor pitch - the more detailed presentation you'll make to potential investors when you're looking for their money.
I've pitched to many investors, from individuals to angels, family firms, banks, venture capital funds, hedge funds and private equity. My shortest pitch was 2 minutes (the guy said no after my first slide) and my longest 4 days plus a return trip to Boston. In one of my longest pitches I secured an investment of just £100,000 and in the shortest $25 million, so there isn't a precise correlation between time and money when it comes to investors - or maybe money and anything! Who knows? They are an eclectic bunch and difficult to predict. But the essence of a good pitch is always the same - make it clear and succinct.
First the golden rules:
Keep it short - if you have 15 minutes allotted at an angel event (which is pretty standard) then speak for 10 minutes max and leave 5 minutes for questions - 2/3 presentation and 1/3 questions. And respect the time - you'll get credit for stopping early.
No more than 10 slides for 10 topics - this is in Part 2 and 3. Expect to take 1-3 minutes per slide if you're going at speed, so moderate the number of slides to the time available. On average 10 minutes is 5 slides. Your time management is a reflection of how organised a person you are. Guess how investors feel about the guy who rocks up with 35 slides of complex diagrams and numbers, and only gets through the first 3 before collapsing in a heap?
Don't worry about a pretty picture as the first slide, or a contents page, or disclaimer, or confidentiality statement. If you had just one slide to tell your story - then the very first slide has got to do that for you. Get straight into it. Hit the ground and run fast!
Having said that mark each page as, "Confidential [your company name]." It creates the right impression, if nothing else.
Remember, this presentation won't result in an immediate decision to invest, the best you'll get is an expression of interest - that it whets an investor's appetite to find out more. And they'll have a lot more questions before they part with their cash.
Use the slides as a prompt to summarise the information and build a story - don't expect your audience to read numbers on a spreadsheet. Give them the highlights visually and talk through the rest. And don't read the bullet points verbatim from the slides - you can do better than that.
Don't face your slides, face the audience.
If you must provide detailed information, then add the sides an an appendix.
As tempting as it is, don't follow (or worse, read) a script. Accept that you're going to forget stuff during the presentation, but remember that investors are investing in you first, then your business idea. They don't want to watch an automaton, they want the authentic you. You need to get comfortable in confidently presenting your business idea ad-lib and allowing the audience to take you where they want to go.
Smile - like things are running like clockwork and you've already got all the money you need.
Think through the likely questions you'll get asked - who are your customers? what are your routes to market? who's the competition? when do you reach breakeven? when would the next investment round be? how much money are you putting in? how will you recruit the team? what's the exit? If you don't know the answer then say so, and promise to write to them with the answer - and do it!
Don't be afraid to ask questions of your audience - for example, what type of businesses do they invest in? what sort of multiple are they looking for at exit, and over what time? what skills and expertise can they offer you?
If someone wants a copy of your presentation, send them a PDF. Make sure it's marked as confidential.
Beware the investor who puts money into a startup and wants to sit on the Board.
Investment is a two-way street; you need an investment and your investor needs a healthy return on their cash. At some point you will want to understand more about the person who is investing in your business, what their motivation is and how involved they want to be. It's important to be comfortable having your new investor onboard. Ideally you want their guidance, but also want to be left to get on with your job. As desperately as you might need the money, don't go with an arsehole who's going to be in your knickers about inconsequential rubbish every five minutes.
Have a clear view about the amount of equity you're willing to give away - that's a combination of the business valuation, the amount you want to raise and the % available for new shareholders. Play with the Cap Table for more guidance, and Kick My Butt if you want a free cap table to play with.
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