Turn a five-minute presentation into a twenty-minute conversation with one of the world’s best venture funds.
Startups are a hype. More and more hitmakers and entrepreneurs struggle to work on their own and create their own Apple, Tesla, and Amazon. Every idea, which aims to “conquer the world” requires a steady stream of money to support its development. When your own investments are exhausted, it’s time to go to venture capitalists and business angels. But this way is very complicated. Apart from the fact that the contacts of the right people are difficult to get, it’s even harder to get to meet them. But this is not the biggest problem. On the pitch itself, you see people who are not particularly interested and the hour of your meeting (hour, if you are very lucky) flies fastly and there is no result. You both run from an investor to an investor with your startup until you are tired and you will not return to your old-good “galley”.
Sequia Capital – one of the most powerful and best-known by its investments venture fund in the world. It has built a roadmap on how to cope with investors and sign profitable contracts.
Mistake 1. People always want to listen to you
Actually, it’s not true. If you have a one-hour meeting with investors, they will listen to you care only for 5 minutes. Not longer. The longer the meeting, the less attention is left to your project. A successful entrepreneur will not pitch for 60 or even 5 minutes, as you might think.
He will do his best to attract everybody’s attention during the first 5 minutes, next 15 and 30 minutes. He will make them ask questions and be interested, in order to get them into his product. In this case, it is a “win-win” format. You either get an investment or an important feedback.
In general, your pitch should resemble a Hollywood movie. Have you noticed that before the screensaver during the first 5 minutes you will see the plot of the whole movie? It’s something emotional, which makes you to say “wow” mentally or aloud and to think what will happen next.
In essence, this maneuver makes you watch the entire two-hour film to the end because it has won your curiosity in the first 5 minutes when you are the most notable. The same rule applies to a startup pitch.
Mistake 2. Numerous detailed slides
Your slides and explanations, no matter how cool they were designed, will not attract attention for the first 5 minutes. You will not have enough time for that. So focus on the three points and answer the following questions:
1. How it’s gonna make a difference? Explain which window of opportunity you open with your idea, so that it enables you to have a successful and stable company in the future.
2. What are you doing? Explain in one sentence how your company gonna profit based on this “window of opportunity”
3. Quick Facts: when based, who is in a team, what stage of development, the number of users, how much you need for the next boost. This will help a potential investor to understand the further context of the presentation.
At this stage, you are running out of your first 5 minutes, so at this point, it is worth showing the fourth slide with your main agenda, something that will happen next. Here you showing some basic points: the size of your market, team, product description, and so on.
Immediately notice – do not hurry to start talking about the greatness of your product in details after the slide with agenda. Ask whether there are questions from the listeners. It is very important. Most likely, they either had a similar business or they were tangent to the same market. Do not be afraid to ask them if they have questions, remarks, things that will be useful to focus on the future. Believe me, you have already won the next 15 minutes of attention.
Mistake 3. I’m an artist. That’s my vision.
Of course, you have the full right to present your product in a way that is convenient for you. However, your jokes, creativity and non-standard approaches can appeal to your team and you, but not to investors. Play with the form, but do not forget to leave the content for the most important points that are interesting and cunning for understanding by all investors. About them detailed.
1. Problem or pain. Explain it as clearly as possible. For consumers, show them the needs that are not resolved, for business demonstrate a detailed understanding and explanation of this consumer pain and unmet need. An investor who does not clearly see the problem you are solving will not be interested in hearing your decision.
2. Solution. Show the demo. Show how it works. It costs more than a thousand words. Show screenshots and a customer journey from the problem to its solution. Make your solution alive. People believe it.
3. The market. If this is a new market, then show how many potential users of your product or service there are, how that number might grow in time and what is the purchasing power of these users. The last point gives you an opportunity to raise the question of your pricing policy and income. If this is an already existing market and you automate or optimize something that already exists, then demonstrate how you narrow the market to your own solution and how you can make money on it. Never use research from obscure companies if you do not understand what’s behind the numbers they use and do not know how to explain them.
4. Competitors. Immediately show all your competitors. You need to avoid a situation when investors identify them by themselves after giving you money. Also, by opening all the cards, it will be easier for you to explain why you are different from your competitors.
5.Team. At this stage, if the investor is still interested, he will definitely want to know more about your team and its experience and talents. Therefore, it is worthwhile to tell more about the background of the founder, to emphasize the talents of team members and their unique abilities, as well as to emphasize the skills that make them indispensable for the construction of this particular business.
6. Finance. Do not write too much. Do not use numbers that you cannot explain. You can easily get lost, so explain simple but important items, for example, show how you gonna spend money and on what exactly. On the growth of the team, on the implementation of unique features, on the release of your product, etc.
After that, you have crossed a twenty minutes mark. In fact, the easiest half has succeeded. But do not pitch for more than twenty minutes. Leave 2/3 of the meeting time for questions. Pitching is the most difficult part, but also the most valuable one. Your task at this stage is to build a dialogue. It is more productive in terms of its content, and also creates a closeness between you and investors due to the interest. When you are having a conversation, but not a hard critic, you’ve almost won this investor.