To give a presentation to investors, you should tell a good story, include these 13 key elements in your presentation, and practice, practice, practice. The business technique still serves as the foundation for any presentation you create.
Step 1: Agenda and Assumptions
Where should you start with your pitch? Start with a simple plan that summarizes what you will discuss. Take a minute to clarify a few fundamental questions about the content of the slides: Is it a comprehensive overview of your company that covers the entire business plan in detail, a brief introduction to your company, or something in between, such as an update for your current stakeholders?
Either way, present your plan and establish your audience’s expectations so you can exceed them with the Steve Job zeal for “one more thing” to wow your audience.
Step 2: Team
Next, address the most important question investors have in mind when listening to a pitch: Can I invest in these people? If you haven’t had a chance to introduce yourself on the way into the room or at previous meetings, provide team slides as soon as possible.
We invest in people first and foremost. We want to know who you are from the start, so we have context. You should share your appropriate experience, and if you are fortunate enough to have already created value and achieved excellent results in other companies, let us know about it.
But suppose if you haven’t had that experience yet?
From Gates to Jobs to Zuckerberg, many great entrepreneurs have been successful without any experience. In many cases, there is no industry to have experience in when new areas emerge (e.g., ten years ago, there was no social media or mobile apps). So, if you are not yet an experienced entrepreneur, you should explain the experiences that led to your business insight and convince you to invest your time and career in your new venture.
Good VCs see entrepreneurs as investing their lives in the business. That’s more important than anything else. So when we meet an entrepreneur, we always look for someone who is focused on their area of expertise and shows the passion and perseverance to pursue the opportunity they have determined. No entrepreneur is successful alone, and great teams are often built through shared experiences. That’s why it’s good to hear if you’ve worked together before or share experiences that have bonded you as a team. We know how important that can be in overcoming the challenges you face.
Also, don’t be afraid to say where you need help. Self-awareness is a great trait, and many investors are happy to help build teams and expect to fill gaps in your team when needed.
Step 3: Business summary
The business introduction should summarize what you do exceptionally well, for whom, and how. Keep it short and to the point. Provide context and introduce your audience to what will follow to leave them wanting more.
Step 4: Organization opportunity
Currently, we’re at the point in the presentation where we need to get your audience excited about the market opportunity. Clearly state the business problem you want to address, make a connection to a technology that can solve it, and explain why customers will see this as a pressing need.
Make sure your audience fully understands the importance of the market opportunity before proceeding. Ideally, they are eager to hear how you address the problem before presenting your solution. Ideally, they should imagine the excruciating nature of the pain. Or, if they are depictive of the target customer, they should confirm that they feel the pain.
The third point, urgency for the customer, is often not considered. You might say it’s optional, but customers often choose to do nothing in uncertain financial times. However, if the urgency is genuine, they will choose to act.
Adding to the inertia is that you are competing with many vendors vying for the same funds and trying to siphon funds from an existing budget. Consequently, customers should feel an urgent need to solve their problems and prioritize your solution.
Step 5: Value proposition and solution
When the investors you are pitching feel the pain, you can present your solution to them and impress them with the technology and insights that drive your approach to meet your customers‘ honest and urgent needs.
However you describe your value proposition, make sure your audience understands it before proceeding. Talk to them and ask them if they understand. At best, you can move on; at worst, you’ll prevent the rest of your presentation from going awry. Be careful not to make any presumptions here that might come from your familiarity with the opportunity. Instead, make it clear what simply would not be possible without your proposed solution and why this is so compelling.
Another word of caution: many entrepreneurs, especially technically oriented thinkers, take too much time on this part of the presentation. Just provide it and don’t try to describe every detail of the solution, no matter how proud you are of it! Present just enough to illustrate the breakthrough. Then use examples from customers and partners as evidence. And if you don’t have them yet, provide the market validation you have.
Step 6: Vision
The summary of the value proposition and solution should lead to your vision of how the market will evolve and how you will lead it. Vision is important. That’s why we always look for entrepreneurs who have the vision to see how the market will develop and grow.
Step 7: Examples and evidence
To us as investors, evidence means far more than arbitrary superlatives. No matter what you declare, examples and case studies will verify that you can supply. They are more reputable than anything else you could say.
If you have evidence, explain the tangible benefits your customers will get from your solution. Describe them in terms of ROI and payback period. Also, explain how the solution can be quickly and repeatedly sold to create a scalable business. This will lay the groundwork for presenting your business and financial models.
Case studies and a demonstrable ROI will help you convince investors and your customers. To put it bluntly, if you can engage a customer with a solution that shows results in a matter of days and delivers a clear ROI after that, it will be much more effective than an offering that takes months to years to implement and cannot be measured in dollars and cents.
Step 8: Market size
Market size helps quantify the total available market for your product. It would help if you made a top-down and a bottom-up estimate of your market size.
Top-down analysis is sometimes provided by analysts such as IDC and Gartner in the technology industry. While they are directional, they rarely predict the true nature of your specific market. That’s why bottom-up analysis is often more critical.
Bottom-up analysis can be as simple as setting the price of your product, estimating the number of potential customers, and performing multiplication. However, we look for people who understand their market in great detail, down to the buyer’s persona, and if that is unique, the user of the product or service.
So a good analysis includes careful segmentation of the actual addressable market and a thoughtful description of how these customers will pay for the solution over time to build a picture of the realistic market size.
Step 9: Competition
This section is always fun. This step should clearly describe how you will achieve sustainable competitive differentiation. Then explain what obstacles are blocking others who are trying to follow you.
Entrepreneurs often claim no competition because their idea is so unique. While that might be true, you will not likely have any competition, at least in the areas where the customer has to spend money on existing approaches or alternatives.
Technology is an obvious differentiator that you should highlight, but don’t forget the others. For example, various other aspects of your business model could provide a competitive advantage, such as pricing, go-to-market, an open-source technique, and unique business partnerships.
Other sources of competitive advantage might be the user network you’ve built or the data you collect over time. Ultimately, all of these factors can be as compelling as your technology differentiation and, more importantly, as competitors’ barriers to entry.
Step 10: Business model
The business model may also be a whole topic in itself, but you should cover the fundamental of how you create, deliver and capture value.
For instance, you should explain how you develop, sell, install, and support your product for a software company. You also need to explain how you package and price it and the channels you sell it.
Ultimately, as investors, we need to know that you understand the methods and costs of developing your product, selling it, and servicing customers profitably.
Step 11: Financial aspects
The business model discussion eventually leads to the financial model, where the numbers should support your claims about the business model. The financial section should include the following:
- Pro forma income statement (quarterly for the first year and annually for 3-5 years).
- Pro forma cash flow statement (quarterly for the first year and annually for 3-5 years).
Behind these two elements of your model, you should be able to explain the assumptions you have made:
Key milestones and dates
- Headcount
- Revenue drivers
- Cost of goods sold
- Expense assumptions
Here, the assumptions are just as essential as the model. Anyone can use the spreadsheet to make projections, but if the financials match the rest of your presentation, we know you are modeling the business with the care needed to build a business.
Financial planning is a specialized skill that few business owners possess. This is an example of how we can often help you find the right resources to help you build your plan.
Step 12: Fundraising needs
Using the financial plan, we use the cash forecast to determine how much money you need to raise and review your assumptions about when you will need to raise the money. This analysis requires you to figure out what milestones you need to hit to justify a higher valuation in each round of funding.
At Underscore, we typically fund for about 18 months at a time because we’ve learned that’s long enough for the team to focus on things like building and validating a product. Teams have trouble getting up to speed and responding to change with less time. With more time, we have difficulty predicting what will happen.
Step 13: Summary
After the presentation, you should summarize what you discussed and re-emphasize why your company is a good investment. If you did everything right, the investors you approach should be thinking, “How can we invest in this company today?” Ultimately, it would assist if you based your presentation on the reality of your business plan. Ultimately, it’s not regarding the slides you show or the words you use. It’s about you, your team, your value recommendation, and your business strategy
Need help with creating a perfect investor Pitch? We’ve got your back! Just click the My Funnel Script
Read More: How to create a great elevator pitch for your company