Total access building and delivering a stand-out investor presentation
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The document provides guidance on building an effective 12-slide investor presentation, including templates and examples for key slides such as the title slide, problem statement, solution, competitive advantages, financial projections, management team, and summary. Key recommendations include crafting a concise "one liner" and "elevator pitch," using customer stories and quotes to validate problems and solutions, and focusing communication on the most important merits of the business for investors.
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Semelhante a Total access building and delivering a stand-out investor presentation
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Total access building and delivering a stand-out investor presentation
- 1. Building and Delivering a Stand-Out Investor Presentation April 2013 1
- 2. 12 Magic Slides Represents the content, flow and messaging for what the investor is used to seeing/hearing Serves as the proxy for the business, not a bunch of slides to hide behind or to merely persuade the investor Focuses your communication on the most important merits of the business for the investor to consider Demonstrates your understanding of the business and your ability to be a thoughtful/rational thinker Gets you an internal champion who will get you to the second meeting and/or to due diligence 2
- 3. Preparation What? • Develop a few communication tools that will set-up and guide the creation of the 12 Magic Slides Why? • Immediately positions your company at the very beginning of the presentation • Pulls the audience into your world and motivates them to want to hear more • Signals to the audience that you know your business Where? • Right at the beginning either during the title slide or slide one • You have 2 slides/10 words to get their attention or the meeting is over 3
- 4. The Tool Kit The One Liner • 5-10 word line that crisply articulates the business • Place in the title slide under your company name/logo The Elevator Pitch • 2-3 sentences that defines the market, customer, problem/solution and uniqueness of the business • Place on slide one (ideally displayed as succinct bullets with an illustrative graphic) The Story • :60 second true event that establishes you and your team’s deep, personal understanding of the customer and connection to their problem • Use as voice over either during the title slide or slide one 4
- 5. The One Liner (not a tag line) Framework (different ways to structure the line) • “[Name] enables customers/end users to do X.” • “[Name] is the Company X of the Y business.” Examples • “We Networks Networks” (Cisco) • “The World’s Information in One Click” (Google) • “The Computer for Everyone Else” (Apple) 5
- 6. The Elevator Pitch Framework • What market are you in? • What urgent problem are you solving? • What is the size of the opportunity? • Why will you win (differentiation, barriers to entry, unfair advantage)? • Where is the validation (customers, investors, etc.)? 6
- 7. The Elevator Pitch Example: Diamond develops proprietary thin film diamond products and equipment that dramatically improve heat dissipation on microprocessors, solving one of the highest priority pain points in the industry. We address growing markets that will exceed $1.5B by 2006 and will become the dominant supplier with the best team having the most comprehensive patent position in the industry. Intel is our largest current investor, and we are actively engaged with other top target customers and partners who provide very strong references. 7
- 8. The Story Framework • Make it personal, compelling and memorable • Why is what your company does important? • How do you know it? • What evidence/anecdote proves it? Examples • Situations of ugly moments or unexpected delights • Scenarios that have occurred in your career that inspire you and the company to create the solution • Circumstances where you designed/implemented a solution similar solution only to find key pieces of the execution woefully lacking or all together missing 8
- 9. Introductions Begin by introducing your team • :30 seconds or less • Save team detail for later Mention any common links • Referral sources, other relevant contacts 9
- 10. Title Slide • Name of your firm • Date • Name of investor firm • Appropriate graphics (logo, etc.) • The one liner • Optional: How much money is being sought for this round? 10
- 11. April 2002 Seeking $5M 11
- 12. Slide 1: Overview Two to five high level bullets Refer to key points to keep attention for the rest of the presentation (your elevator pitch) If you don’t get their attention here, you won’t get their check later 12
- 13. Making Business eCommerce a Reality Automate financial processes and operations Drive transaction cost efficiencies IT Managers of Fortune 100 companies rank this as among the top five areas to invest in over the next five years Beta agreements have been signed by three Fortune 13
- 14. Channel-wide Collaboration • Time & project management solution for PSOs • Web based market segment projected to be 3B • 60 customer; growing 30% per quarter London New York 14
- 15. Slide 2: The Problem Compelling problem(s) to be solved • What’s the pain? – revenues, costs, time, market reach • Faster, better, smaller, etc. are solutions, not problems Best to include validating quotes • Customers are best • Analysts when applicable So what? Problem must suggest a large market 15
- 16. Corporate Data isn’t Safe Fake Payables $70K *Billions Lost Annually *Up to Deleted Chart time 40% wasted it of Accounts $100 K “Our margins depend $3.7 Fake Vendor on a secure platform.” - Sam Hein, VPO XYZ Airlines M * IDG Group Study 16
- 17. Slide 3: The Solution Describe your business • Product or service Compelling benefits • “Must-haves” not “nice-to-haves” Defining graphic • Illustrating your product or service Hooked? • If you haven’t set the hook by now, you are dead! 17
- 18. Solution Intrusion Detection Access Control Easy Integration 18
- 19. Slide 4: Opportunity and Market Market details • Size and growth rate for five years • Focus on your segment(s) of the target market $100M+ run rate opportunity in five years? Demonstrate defensible % of market share • Why you won’t get squashed A graph format works well 19
- 20. 20
- 21. Slide 5: Technology Translate key points from business to technical domain • Show how customers and partners fit in, if possible Best to use animated graphics • Before and after diagrams often work well Concentrate on essential value proposition!! • Talk to important but peripheral issues and details, avoid clutter Address “invent vs. integrate” issues • Show that you will invent only uniquely competitive elements • Show incremental development path that reduces risk, if possible 21
- 22. >>> Technology EXECUTE ANALYZE OPTIMIZE PLAN Enterprise Portal Integration Inventory Web Store Business Applications Fulfillment Call Center Analytics Rules Planning Workflow Customer Mgmt XML XML Supply Chain Warehousing Engine Engine Engine Engine Email Distribution EDI Platform Framework EDI Direct Mail J2EE Application Server Manufacturing Field Service ODBC Relational Metadata ODBC Logistics Point of Sale IT Infrastructure: Hosted or in-house Procurement SFA Data Flow 22
- 23. Technology Overview 23
- 24. Slide 6: Unique Competitive Advantages Team, relationships, intellectual property, new insights, domain expertise • Are they yours alone? • Will they provide a 10X+ advantage? • How long will they last? • What will it take to overcome them? • Why will customers care? 24
- 25. Unique Competitive Advantages Team has strong background in key technical areas CEO, Chuck Smith, 5 years of speech systems experience at Nuance VP Engineering, Dave Johnson, built enterprise software products for TenFold Team has nearly 20 years collective experience in computer telephony Partnerships in place with dominant market players Speech Technology – Nuance and Speechworks Voice Portals – TellMe and BeVocal Authorization Software – Netegrity and RSA Security Provisioning and Management – BMC and M-Tech Patenting innovations in technology and applications Voiceprint store & forward from PC – voiceprinting on internet from standard PC Voiceprint store & forward from IVR – allows bolt-on rather than re-write Several other patentable innovations coming 25
- 26. Competitive Advantage Next Generation PSA Strategic Management Capability • 2000 V3.1 – Global Enhancements • 1999 Connected Service Chain • 1998 Resource Management 1 Generation st PSA Global & Collaborative 26
- 27. Slide 7: Competitive Landscape Discuss current and potential competitors • Demonstrate knowledge of the landscape • The answer “no competition” → red flag → no market Provide framework to differentiate • Use customer-centric attributes and dimensions • Reinforce your unique competitive advantages Upper right quadrant graphic? • VCs see ‘em everyday – risk of being cliché Quote prospective customers • What do they say about your competitors? • Why would they rather buy from you? 27
- 28. Competitive Advantage Product GA Production Highly Scalable >$10 per Customers Architecture IP-DSO Acme Company A Company B Company C Company D Company E Company F 28
- 29. Who are the key players? Slide 8: Go to Market Strategy • Profile the customer • Discuss critical partner relationships (current and future) • Describe who (in/out-house) sells your product or service How and what do customers buy? • Discuss high level pricing (e.g., annuity or one fee) • Describe what the customer will get (today and beyond) Marketing and sales plan • Explain value chain and sales cycle • Compare and contrast to other firms Graphics work well Emphasize external validation 29
- 30. Go To Market Strategy Today Distributors 6 US MID- MARKE INDIRECT SALES 10 European 18% Strategic Partners 2 Asian T IBM 82% F100 DIRECT SALES 0 $4B 30
- 31. Go To Market Strategy Distributors Sirrius Tomorrow AvNet Support Net MID- Strategic Partners INDIRECT SALES IBM Symantec MARKE 50% ISS Tripwire T Independent Software Vendors JD Edwards 50% F100 SAP Infinium DIRECT SALES 0 $4B 31
- 32. Slide 9: Financial Roadmap Provide high level 5 year projections • Revenues and expenses by major categories • Pretax profit (loss), cash flow from operations, capital requirements Highlight milestone targets • First revenues • Cash-flow positive • Tangible competitive barriers (customers, IP, etc.) • $100M/yr run rate in year 5 is cliché, but expected Prepare “hip pocket” detail slides • Best for a second meeting, but produce if requested 32
- 33. Financial Overview 2002 2003 2004 2005 2006 Revenues ($K) $1,500 $7,000 $25,000 $60,000 $105,000 Expenses ($K) $2,500 $10,000 $24,000 $49,000 $79,000 Profit ($K) ($1,000) ($3,000) $1,000 $11,000 $26,000 Investment ($K) $5,000 $5,000 Headcount 15 60 150 300 450 Customers 5 20 50 150 250 Investment Sought $5M Series A: Now $5M Series B: 12-18 months after Series A Use of Proceeds Get product into Beta/GA, implement with 1-3 beta customers Build solid pipeline, sign initial partnership deals Stage scaling of Sales / Prof Serv / Engineering / G&A 33
- 34. Future Timeline March Begin Marketing 2003 Efforts for AEDI January Complete identification 2003 of management team December Begin strategic product 2002 development August Elevate marketing of DD 2002 to achieve sales goals July 2002 Close A-round 34
- 35. What’s Behind the Financial Slide? Deep understanding of the business model Be prepared to discuss key assumptions • Revenue analysis – market penetration and timing o Top-down (supportable percentages) o Bottom-up (pipeline, revenue by customers, validation) • Expense analysis o Validate with comparable companies, as available • Other (capital equipment, A/R & A/P turnover, etc.) Detailed proforma backup (P&L, cash flow, balance sheet, use of proceeds & headcount) 35
- 36. Slide 10: The Team • Previous relevant accomplishments o Include academic credentials • How does this team work together? • Be honest - who’s missing? o Discuss your hiring plan to fill key slots • Relate to unique competitive advantages • Emphasize what YOU bring to the table o The CEO is the most critical team member o Demonstrate your competence through your presentation 36
- 37. Management Team Chuck Smith, CEO 9 years enterprise systems expertise – IBM 10 years call center systems expertise – ROLM/IBM and Tandem 5 years speech solutions expertise – Nuance BS Mathematics, Loyola University, Los Angeles Dave Johnson, VP Engineering 6 years telecom & imbedded systems expertise – Tanner 6 years enterprise software integration expertise – TenFold BS Engineering, CalTech Herman Lewis, VP Sales 20 years of sales success in Call Center market – Teknekron and Teloquent Sales process expert with 8 years sales management experience BA Philosophy, Bloomfield College, NJ Board of Directors Mike Baker, Chairman of Blue Note Software Bruce Davidson, retired VP Sales, Nuance Charlie Clay , board member SRI 37
- 38. Slide 11: Current Status • Highlight milestones achieved to date • What have you already accomplished with other investors’ money? o Investors like to see efficient, productive use of resources • Historical timeline format can be useful • Emphasize where you go from here o Show you are in position for some key next steps 38
- 39. Current Status Launched: January 2001, angel funding Product Status prospects Password Reset announced 5/01, available 9/01 Confirmed Caller announced 2/02, available 4/02 Fargo Wells Password Reset US Bank Password Reset Voice Secure Web – prototype available Hewitt Password Reset Customer Status Visa Password Reset Hartford Life – Password Reset 9/01 Bank of America – Password Reset 1/02 E*TRADE Confirmed Caller Partnerships complete and functional GE Card Confirmed Caller Services Nuance and Speechworks both contributing funding Netegrity, RSA Security and BMC Seed team effective and efficient 39
- 40. Slide 12: Summary Summarize your three strongest points • Have these distilled down to memorable sound bites • Highlight synergies with prospective investor (portfolio, GP background, domain expertise, etc.) Solicit feedback • Identify and address concerns Call to action • Ask about the process, and what it takes to do a deal Next steps • Determine conditions for second meeting • Set up follow-up meeting, if possible 40
- 41. summary Great opportunity to impact security market Voiceprints are best authentication approach Proprietary advantages in place Proven team and initial results Delivering products to paying customers Established partnerships with market leaders Seeking support to capture the opportunity Financing Building management team 41
Notas do Editor
- 9:55 OK – I’ll start with a couple of questions . . . 1) WHY 12 SLIDES??? 2) Let me ask another question first: WHAT IS THE PRIMARY OBJECTIVE OF A FIRST MEETING??? The first objective is to get a second meeting!!! Your objective in the first meeting is to convince the investor to commit to next steps and leave them with a “I’m interested, let me see more” vs. “I don’t get it – and don’t want to invest more time” attitude. You’ll have the best chance of succeeding if you accomplish three objectives: (1) Validate your sector (2) Sell yourself as the person that can build and lead a team to next level (3) Convince the investor that your team can deliver a competitive solution to a large growing market that will PAY THE RIGHT PRICE. You are not there to get funded on the spot – or to present all the information that they will ultimately need to make an investment decision. How much time do you have to make these three critical points??? Let’s go through the math of a meeting: Count on 1 hour maximum time: 5-10 minutes of ice breaking and introductions; 20 minutes of Q&A, 10 minutes for contingency. How much time does this leave you to make your three key points??? 20-25 minutes is what you should plan for!!! If you get more time, great – just don’t plan your basic presentation for more time. Can a successful first presentation be done with more than 12 slides? YES!!! But if you can’t get a 2nd meeting with about 12 slides (what we have found is that) you/your team ARE NOT READY. Boiling a story down to 12 powerful slides that succeed in getting to a next meeting is DIFFICULT – and may take weeks – even if you have a presentation already. But the process will, not only result in building a good presentation, but also allow you and your team to come to grips with the important business fundamentals that will get you across the finish line. To soothe any skeptics in the audience that believe that their story cannot be told well in 12 slides, let me add the following. Typically, you’d be referred into the meeting by credible people known to the investor. Their endorsement of you and your plan will reduce the need for the investor to heavily drill down. Also, the executive summary would probably have been sent ahead of the meeting – so most investors will already have some idea of your firm. We will briefly touch on the Executive Summary later, but for the most part, you will be drilling down into the categories that we will focus on in the PPT. It is appropriate that you prepare and be ready to use of “hip pocket slides” to provide needed supporting data and to be ready for anticipated questions. However balance time to answer questions against the need to tell your basic story. Better to defer answers in order to cover all twelve slides. Any questions???
- 9:55 OK – I’ll start with a couple of questions . . . 1) WHY 12 SLIDES??? 2) Let me ask another question first: WHAT IS THE PRIMARY OBJECTIVE OF A FIRST MEETING??? The first objective is to get a second meeting!!! Your objective in the first meeting is to convince the investor to commit to next steps and leave them with a “I’m interested, let me see more” vs. “I don’t get it – and don’t want to invest more time” attitude. You’ll have the best chance of succeeding if you accomplish three objectives: (1) Validate your sector (2) Sell yourself as the person that can build and lead a team to next level (3) Convince the investor that your team can deliver a competitive solution to a large growing market that will PAY THE RIGHT PRICE. You are not there to get funded on the spot – or to present all the information that they will ultimately need to make an investment decision. How much time do you have to make these three critical points??? Let’s go through the math of a meeting: Count on 1 hour maximum time: 5-10 minutes of ice breaking and introductions; 20 minutes of Q&A, 10 minutes for contingency. How much time does this leave you to make your three key points??? 20-25 minutes is what you should plan for!!! If you get more time, great – just don’t plan your basic presentation for more time. Can a successful first presentation be done with more than 12 slides? YES!!! But if you can’t get a 2nd meeting with about 12 slides (what we have found is that) you/your team ARE NOT READY. Boiling a story down to 12 powerful slides that succeed in getting to a next meeting is DIFFICULT – and may take weeks – even if you have a presentation already. But the process will, not only result in building a good presentation, but also allow you and your team to come to grips with the important business fundamentals that will get you across the finish line. To soothe any skeptics in the audience that believe that their story cannot be told well in 12 slides, let me add the following. Typically, you’d be referred into the meeting by credible people known to the investor. Their endorsement of you and your plan will reduce the need for the investor to heavily drill down. Also, the executive summary would probably have been sent ahead of the meeting – so most investors will already have some idea of your firm. We will briefly touch on the Executive Summary later, but for the most part, you will be drilling down into the categories that we will focus on in the PPT. It is appropriate that you prepare and be ready to use of “hip pocket slides” to provide needed supporting data and to be ready for anticipated questions. However balance time to answer questions against the need to tell your basic story. Better to defer answers in order to cover all twelve slides. Any questions???
- 10:10 (Optional – time permitting) DRS : We bring this ‘story’ exercise up front, as a way to begin more directly engaging the attendees, and to bring greater balance in terms of the timing and pace. THE STORY - We’ve found that the most memorable presentations begin with a story. Story telling can be a powerful tool to get immediate attention and to set the stage for your presentation. THE OBJECTIVE IS TO CLARIFY WHAT YOU DO THAT CUSTOMERS CARE ABOUT & TO CONNECT WITH YOUR AUDIENCE. GREAT LEADERS ARE USUALLY GOOD STORY TELLERS – SO SHOW YOUR STUFF . 2 minute compelling story tied to your overall message The best stories discuss potential customers who are experiencing pain in the absence of your solution. It might be what led you to the epiphany that caused you to start your business. REASONS LIKE YOU COULD NO LONGER KEEP A REGULAR JOB – OR THAT YOU WANTED TO HAVE A CEO TITLE DON’T CUT IT. Some examples (use others if you have them): P1 Diamond One of DT’s early stage client firms is finalizing a B round financing. The company is called P1 Diamond and they make low cost diamond films that are used as heat spreaders on microprocessors. Their CEO opened meetings with a literal ice breaker by asking the VCs to cut an ice cube using a thin slice of his diamond. Diamond material is so conductive that it delivers heat from your fingers through the diamond and literally causes the diamond slice to cut through the ice cube like a hot knife through butter. You cannot do the demo without immediately understanding how powerful this new material can be. Even PhDs with many years in this field were impressed with the demo and immediately warmed to the presentation! netDialog netDialog was a software company that made a web based product support system that allowed users to find quick solutions to frequently asked problems. They would start every investor meeting by telling the story of how the company idea was developed as the founders attempted to put together a red bicycle for one of their daughters on Christmas Eve. The manual was missing from the shipping box and they could not figure how how to put the kickstand on. In the process of trying to install it, they ended up badly scratching the paint on the bike – and got a very negative reaction on Christmas morning. Ultimately they had to replace the bike to satisfy the daughter. In their opener, they described how our product would have solved this problem – even on Christmas eve when no one was manning the help desk. ANY VOLUNTEERS FOR A BRIEF OPENING STORY??? DRS : The brief introductory story worked extremely well during the February 11 th session. I can still remember how good the ice cutting story was, and how bad the other stories were…
- 8:50 It is important to understand the difference between elevator pitches and taglines. Elevator pitches are more than taglines. Taglines are catch phrases that are intended to be remembered as highlighting the story in a few words. They work best for more established brand-name companies, for which a few words can tell the story. Tagline examples: Cisco – We network networks Brocade - Think Fast. Think Compatible. Think Affordable. Rational – Unifying software teams For less mature companies, you typically need more words to summarize why people should care, but the key points in an elevator pitch referenced here must be conveyed very briefly to make that first impression that will lead to interest and further engagement. You need to solicit interest before you lose their attention, so the best points must be delivered early and quickly. DRS : Two comments/suggestions to add to Mark’s presentation here – (a) The elevator pitch is the story about the Business. To much detail about the technology or the product and you have a disaster by losing the short attention span of the VC. (b) The best elevator pitches are built up from an analogy or kernel that creates what I call the “a ha” moment of clairvoyance. It’s a testament to the clarity of the elevator pitch if the consistency of the analogy or tag line is powerful enough that the VC remembers that first, which refreshes his memory and allows him to ‘rebuild’ the story as he retells the pitch to his partners. - Example: Forte Design Systems – Forte Design Systems is an EDA (Electronic Design Automation) company, developing high-level synthesis software for the design of complex semiconductor devices and systems. As chips have increased in complexity and density over time, the linguistic level of abstraction designers need to use to capture their design has risen – and new design tools to synthesize chips from those more abstract languages have emerged. Each of the previous two major nodes of change emerged at points, like today, when the level of complexity had increased by an order of magnitude. Both times a large EDA player arose championing the move: first Cadence in the 80s and later Synopsys in the 90s. Forte’s proposition aims to now bring that abstraction layer to the next step, and by doing so enable the productivity and success of today’s immensely complex semiconductor systems. - Example: Cometa Networks - Cometa Networks operates a nationwide wholesale broadband wireless network of “hotspots”, serving the high speed mobile data customers of leading telecommunications companies, wireless carriers, cable operators and ISPs. The company is deploying a nationwide carrier-grade broadband wireless network comprised of public “hotspots” located in major branded real estate sites. Cometa’s business model is analogous to UUnet’s success ten years ago in the wireline world, acting as a “carrier’s carrier” meaning that the Cometa service is offered on a wholesale basis to telecommunications companies, internet service providers, cable operators and wireless carriers, who in turn package the service for their enterprise and residential customers. Cometa Networks was created in December 2002 by leading technology companies AT&T, Intel and IBM and global investment concerns Apax Partners and 3i US.
- 9:00 OPTIONAL EXAMPLE (if you have better example pitches, use them, but make sure they are consistent with the best practices highlighted) Review this pitch against the criteria: What market are you in? “ P1 Diamond develops proprietary thin film diamond products and equipment . . .” What urgent problem are you solving? “ . . .dramatically improve heat dissipation on microprocessors, solving one of the highest priority pain points in the industry . . .” What is the size of the opportunity? “ We address growing markets that will exceed $1.5B by 2006 . . .” Why will you win? “ . . .the best team having the most comprehensive patent position in the industry . . .” Key validators: investors, customers, and references “ Intel is our largest current investor, and we are actively engaged with other top target customers and partners who provide very strong references” If available, be sure to include strong customer validation.
- 10:10 (Optional – time permitting) DRS : We bring this ‘story’ exercise up front, as a way to begin more directly engaging the attendees, and to bring greater balance in terms of the timing and pace. THE STORY - We’ve found that the most memorable presentations begin with a story. Story telling can be a powerful tool to get immediate attention and to set the stage for your presentation. THE OBJECTIVE IS TO CLARIFY WHAT YOU DO THAT CUSTOMERS CARE ABOUT & TO CONNECT WITH YOUR AUDIENCE. GREAT LEADERS ARE USUALLY GOOD STORY TELLERS – SO SHOW YOUR STUFF . 2 minute compelling story tied to your overall message The best stories discuss potential customers who are experiencing pain in the absence of your solution. It might be what led you to the epiphany that caused you to start your business. REASONS LIKE YOU COULD NO LONGER KEEP A REGULAR JOB – OR THAT YOU WANTED TO HAVE A CEO TITLE DON’T CUT IT. Some examples (use others if you have them): P1 Diamond One of DT’s early stage client firms is finalizing a B round financing. The company is called P1 Diamond and they make low cost diamond films that are used as heat spreaders on microprocessors. Their CEO opened meetings with a literal ice breaker by asking the VCs to cut an ice cube using a thin slice of his diamond. Diamond material is so conductive that it delivers heat from your fingers through the diamond and literally causes the diamond slice to cut through the ice cube like a hot knife through butter. You cannot do the demo without immediately understanding how powerful this new material can be. Even PhDs with many years in this field were impressed with the demo and immediately warmed to the presentation! netDialog netDialog was a software company that made a web based product support system that allowed users to find quick solutions to frequently asked problems. They would start every investor meeting by telling the story of how the company idea was developed as the founders attempted to put together a red bicycle for one of their daughters on Christmas Eve. The manual was missing from the shipping box and they could not figure how how to put the kickstand on. In the process of trying to install it, they ended up badly scratching the paint on the bike – and got a very negative reaction on Christmas morning. Ultimately they had to replace the bike to satisfy the daughter. In their opener, they described how our product would have solved this problem – even on Christmas eve when no one was manning the help desk. ANY VOLUNTEERS FOR A BRIEF OPENING STORY??? DRS : The brief introductory story worked extremely well during the February 11 th session. I can still remember how good the ice cutting story was, and how bad the other stories were…
- 10:05 What are the two major objectives here? (1) Build rapport (2) Understand your audience – KNOW BACKGROUNDS OF PARTNERS AND PORTFOLIOS BEFORE YOU GET THERE. Those portfolio clients can be sources of validation, revenue, or competition. Cite positive common links that can validate you and your story IF YOUR SOURCE OF INTRODUCTION IS PERCEIVED AS A VALIDATOR – REINFORCE THAT CONNECTION TO ENHANCE YOUR CREDIBILITY Keep team level summary high level HERE; mention that details will follow CEO often goes solo to first meetings; rarely more than two people (most investors want to see the CEO in action) Stay on track as much as possible vs. reacting to questions and getting on tangents that won’t allow you to get to key points BUT DON’T LOSE OR FRUSTRATE YOUR AUDIENCE; IF AN ISSUE CAN’T BE DEFERRED, ADDRESS IT & GET BACK ON TRACK
- 10:08 Personalize your title slide to the audience Make sure you’ve done your homework to know that the size and segments of investments fit the VC partner you are pitching (minimize wasting time on obvious non-fits) DRS : Keep this simple, clean and ensure its up-to-date (don’t need excuses for missing slides) and targeted for today and today’s audience (irregardless of how many meetings you have you can’t have another firm’s name on the title slide). Anything else looks sloppy, and missteps in the medium detract from the message. - The best slide decks are simple backgrounds that are blue or neutral in color with easy to read, neutral type. No distracting or complex watermarks on the background of the slides. - Graphics should be simple, non-complex and used sparingly for this meeting – the overly complex graphics or pictures are difficult to read and follow on a screen causing the audience to stop listening and try to interpret - Animation is to be used never or almost never, and ideally use very few (if any) build slides - All slides should be numbered discretely in the lower corner of each page – this helps when you get questions, so you don’t have people backing-you up like an airplane (e.g. back, back, not that one, back, back, one more…that’s it…) - Remember as you prepare your slides that they are illustrations of your pitch, and not transcriptions. You give the pitch, and should not simply say everything that is on the slides (the audience can read) and the slides don’t have to say everything that you pitch
- Example Slide Acme Title slide – show briefly
- 10:15 Earlier, we talked about developing an elevator pitch. If you do this well, you will have the ammunition for this slide. Focus on: Getting immediate attention with strongest assets (customer traction, investors, team, etc.) Setting the tone for the rest of the presentation Briefly highlighting the 2 – 5 points that put your best foot forward; you will elaborate on those key points later DRS : This is the key slide for the entire pitch, and you should be able to build your slide deck so you could give the pitch and tell your story with only this slide and “the titles” of each of the following eleven slides. The titles should therefore each make a positive statement, a leg in the package that is the complete story of the deal. - Your objective with this slide is to neatly say what you do, why its different and why someone should care
- Example Slide: Acme Overview This slide might be presented as follows: “ Our company is focused on dramatically lowering financial transaction costs between business buyers and sellers. “ The specific area where we are focusing has been ranked by Fortune 100 IT managers in a recent IDG survey to be among the top five areas where they plan to make software investments Beta agreements have been signed with 3 large Fortune 100 companies who have selected us ahead of other competitors in this segment.” Streamline and automate processes Reduce transaction costs Branded customer experience Costs aligned with usage Deliver Products Faster Focus on core business Scales to meet demand of the internet channel Bring liquidity in 30 days Increase revenue Expand customer base More revenue per customer Additional working capital
- Supplemental example (optional) Note important reference to market size and customer traction on both of these slides.
- 10:20 It is important to start by describing The Problem that you are solving – and get buy-in from the investor before moving forward. DON’T START WITH YOUR SOLUTION! The solution is only exciting if it solves a compelling problem; so set the context for why your solution is important. Problem hierarchy:(1) Revenues (2) Costs (3) Time (4) Market reach Quotes are effective here for external validation Cultivate customers or target customers to provide quotes/references that fit your overall message Analysts can add value but are often viewed as too far removed from the real customer problems (so, analyze credibility before using)
- Example Slide: Acme (Overlay slides) Points to emphasize: - Appears as compelling “need it yesterday” pain relief - Use of external validation (analyst plus customer)
- 10:25 Describe your product or service in terms of features and benefits – focus on the “must-haves” VCs look for a big delta for the customer based on your solution Make it clear that your solution was developed based on interaction with target customers (hopefully)!!! Drill down into the technology a few slides later Solicit reactions from your audience to assure buy-in here – no buy-in means no next meeting!!! Have a supply of customer quotes to respond to skepticism about your solution.
- Example Slide: ACME Graphics work well on this slide; show flows (perhaps with overlays as here) between ecosystem components if appropriate Emphasize functional relationships – not technical details Define your “ecosystem” and show your relationship to and fit with adjacent solutions SOLICIT QUESTIONS, COMMENTS, EXPERIENCES, EXAMPLES FROM AUDIENCE HERE
- 10:30 Seek validation from customers and analysts (bottom-up and top-down) Use external data to size your market; VCs are looking for big markets and validation Describe the broad market and drill down to the market that you are attacking (don’t start with the global GNP) Graphics can work well on this slide Assuming you have a big market – be sure you emphasize Phase 1 segments (“low hanging fruit” can validate opportunity) Don’t just emphasize “macro” billion dollar market – you MUST show your sub-segments (and be prepared to show competition and differentiators later in the presentation) Open floor for discussion on how CEO’s have sized their market segments. Explain and contrast terms such SAM (served available market) and TAM (total available market) Any of you want to share experiences you’ve had sizing your markets?
- Example Slide: Acme This shows the subset of the projected larger market that Acme expects to obtain along with the primary segments. Many companies make the mistake of simply presenting large aggregated market totals – and omit pointing out the sub segments that they plan to capture. VCs will want you to be as precise as possible on what you think YOUR firm can address. Best practices: If possible, avoid general assertions such as “We plan to capture 2-3% of this $X billion dollar market.” Be precise as possible and be prepared to address details.
- 10:35 Best practices: Don’t get bogged down Stick with well known, accepted vocabulary Talk in language so viewer can restate your “technical elevator pitch” to non-viewer? Avoid creating more than one product name It may be necessary to develop a follow-on presentation exclusively on technology – DON”T DELIVER IT AT THE FIRST MEETING If your audience is highly technical, DISCUSS what you are able to show at a follow-on meeting Discuss outside technical validation Best practices: Avoid going deep in a first meeting. If there is interest, schedule a follow-up meeting that includes your lead technologist -- and only then go deeper Remember your major objective is to get the SECOND meeting!!! The two most common themes of second meetings are (1) sales pipeline (2) technology
- Example Slide: Acme (1 st alternative tech slide) There are many ways to do these slides, but commonly, we see variations of one of the two formats, this and the following example slide. Choose the one that seems most appropriate to your company situation and the technology and other background and interest of your audience. In addition, appropriate back-up slides should be developed for potential questions. “ Secret Sauce slide” Positive points: Overlay graphics help control discussion of more technical content and allows you to better control discussion Issues: Can be too busy for some audiences – so be careful with showing too many details
- “ Ecosystem slide”: Acme (2 nd alternative tech slide) Positive points: shows positioning of technology in overall eco-system; platform for discussing interactions with other products and technologies Issues: Some investors will want to see more intellectual property exposed at this point KEY POINTS: Use the technology slides to show high level picture only. The first presentation is typically used to build the business case for going to next steps. If there is interest, you will have ample time to go deep in your follow-on meetings.
- 10:40 Focus on why you will win (critical relationships, team, a big lead against competition) Emphasize IP – both patents and trade secrets Strong pre-emptive partnerships can be good differetiators – if you have them, list them Graphs work well to position your firm against others in crowded markets Only present features that are likely to win business I.e., differentiators that cause customers to write checks! Avoid “gee wiz” features that have little meaning to customers
- Example Slides Acme (alternative 1) “ Current snapshot” – highlights of key areas of differentiation and barriers to entry
- Alternative 2 “ Timeline” Shows the development of new competitive advantages over time This slide is better if you are getting the question: “Is this a product idea – or a real company?”
- 10:45 You will be tested on how well you know your space. Come prepared and prove your domain expertise here; talk about competitive companies, competitive technologies, and potential competitors. We hear all the time the line that firms have no competition or they are the only solution; that rarely resonates with VCs, as they believe that difficult problems in large growing markets (where you need to be) attract competing solutions and actually want to see some level competition as a space validator Be prepared with customer quotes from those that have evaluated other solutions and who rank your solution as preferable Four quadrant graphics are often viewed with skepticism Save back-up slides for next meeting (analysis on each major competitor and competitive technologies) although you may want to mention you have gone to that depth An alternate title that works for this is “Market Landscape.” With this title you can also add in partners, potential acquirers, and the names of firms that you may WANT to be compared to as well as, of course, competitors. Focus on why you will win
- Example Slide: Acme This slide might be delivered: “Here’s feedback from our customers on how they see us next to the competition” Points to emphasize: This type of matrix format is one of the most popular among VCs It is critical that you only show features/functions that win sales – this is NOT the place for “gee wiz” features that mean little to people writing checks Don’t hide important gaps in your product if they exist. Admit them and discuss what you plan to do about them. VC perceptions about your personal credibility and honesty are more important by far – so don’t oversell.
- 10:50 There can be much to cover in this area Use these bullets as a pallet to build your most relevant points You need to demonstrate a solid understanding of your target customers and reflect experience in capturing them Emphasize domain experience of you/your team This is an area where investors look for holes – so make sure it works!!! May not be a deal maker – but can be a deal breaker! Good to also bring out “sources and uses” of investment funds in the current round as related to evolution of the market plan e.g., “ . . . We are planning on investing 25% of this next round in the build-put of our indirect channel capability . . .”
- Example Slide: ACME (overlays) This slide contains material that allows the presenter to discuss all the attributes of an effective Go To Market Strategy
- Overlay slide
- 10:55 Who are the financial gurus here? I took a mini-survey last week (not audited by Deloitte & Touche) with a GP from a top tier Sand Hill Rd. VC firm; he said his firm sees about 10,000 plans a year showing an average of about $100M+ in yr. 5; that’s about $1 trillion in revenues (no wonder they are skeptics); as an aside, he said most CEOs called their plans conservative. So what do you do? Show $20M, they may believe it, but won’t write a check; $100M they laugh to themselves. The bottom line is: if you want the money, you have to convey a big vision; this slide is the easy part; demonstrating how can attain these projections is your challenge. Before we talk about that challenge, let’s focus on what goes on this slide. VCs tell us that they see far too many financial plans that aren’t sound, consistent, substantiated, or comprehensive, creating an appearance of a lack of understanding of the dynamics of the business. Once you lose that credibility, you are toast.
- Acme example 5 years of high level projections Capital required Some milestones to be achieved with the proceeds Highlight validation wherever you can (particularly from customers).
- BACKUP SLIDE Many VCs like to see how what you plan to use their investment. This is a good back-up format to consider to pull out if the question comes about focus and use of proceeds post-funding. This may not be an issue in a first meeting, but it will certainly be discussed in detail before any investments are made. Be realistic as these types of projections can come back to haunt you if you are too optimistic.
- 11:00 (10 minutes) First, should you drill down deeply into your operating plan in the 1st meeting? No, come prepared to address detailed questions and show your understanding of: The business model and economics of your business Revenue potential (from a market and a customer-centric perspective) Expenses to run your business (validated with comparables) Your key assumptions Path and timing to break-even Cash flow (cash is king) / timing and magnitude of capital requirements Past financings and valuations So make and record those key assumptions, and build your income statement, balance sheet, and cash flow statement, making sure they all tie together, and convey that you went through such a process. You can and will get to the detail at later meetings. If you can’t build the detailed plan internally, seek outside help. You need to be able to discuss implications of multiple scenarios & changing assumptions. The figures on the financial overview slide should be a roll-up of the detailed plan (assume that you will be tested and have to defend them). Any questions or “best practices” to share in this area?
- 11:10 The team, particularly the CEO, is evaluated from the second you walk in the door!!!! Most important is your overall credibility. Most VCs say they like to “bet on the jockey, not the horse.” They want you to demonstrate that you can pull it off and that your team is a competitive advantage. Emphasize relevant track records in the target domain and the skills you and your team bring to the table. As a CEO you don’t personally need ALL requisite skills – show complementary experience of others to fill major gaps. Most VCs want to see: How well the team works and fits together (e.g., prior joint experience) Prior results from key team members that provided returns to investors Solid academic credentials (if not, you may need to recruit them) Where are the holes and what’s the plan to fill them? What do others say about you (customers, investors, former employees and employers, partners, etc.)? CIRCUMSTANCES MAY DICTATE A RE-ORDER OF THE SLIDES (i.e., if you had relevant successes as CEO, you may want to establish that earlier in the presentation) WHAT TEAM MEMBER(S) SHOULD BE MAKING THE PRESENTATION? Often the CEO goes alone to the first meeting. Your ability to deliver the story and answer questions may be among the more important criteria for getting a next meeting. Even if you have good reasons to bring others, you MUST prepare to do a first meeting solo.
- ACME example – just the highlights
- 11:15 Highlight major milestones the TEAM has been able to accomplish to date. Re-enforce the importance of the milestones achieved, in terms of why you will win. If it is the case, show that you have made great use of capital invested to date. If the story is beating timelines and meeting budgets, tell it. Pipeline details are great for the 2nd meeting (don’t get bogged down in first meeting with prospects that aren’t referenceable) Segue to the summary and call to action. QUESTIONS, COMMENTS?
- Example Slide: Acme Highlights status with product, customer traction, and key relationships. Bring out major key milestones achieved.
- 11:20 Remember that your objective is to get the next meeting, so this is your call to action. Go out with a splash, and briefly summarize your strongest points. Solicit feedback, probe for and address concerns (don’t argue; remember you need to establish rapport) Clarify process to a deal. Identify what you need to provide them after the meeting. Set-up next meeting (or, at least, define what it will take to get that meeting). Be prepared, if asked, to forward a qualified, well prepped, list of references (no loose canons). Thank them for the time, interest, and feedback.
- Example Slide: Acme 3 key highlights you want the investor prospect to remember