When you are ready to raise finance, what are the areas to focus on for your pitch to make sure you get funded and start on the right foot?
Homework
First, make sure you do your homework on the VC ahead of time. This will ensure you are partnering with the right type of investor and also prove to them you are serious about wanting their support.
What type of investor are they? Each one is unique, that could be the industry or geography they focus on, or social issues they are passionate about. Also think about how they are relevant to you.
Why?
When telling your story, be focused on getting the WHY across. The biggest question on VCs minds is WHY. Why did you start this business? Why is this team the right people to do it? Why is now the right time?
Define your business in one sentence as this will force you to be focused and compelling.
Pitch Deck
The pitch deck is a key part of your overall pitch. I recommend sticking to about 12 slides, which should take you about 20 to 30 minutesto talk through. Remember that the pitch deck is intended to spark questions and conversations so expect that as you go through it.
What should be the structure of the pitch deck? I break it down into starting with a couple of slides showing the problem you see within the current industry and world around us, and then your solution to the problem.
The next couple of slides should show your business model by going into the product, customer and pricing. These slides should convey your business model in a simple and elegant manner. Use large fonts and diagrams to allow potential investors to understand your point quickly. Do expect lots of questions, and be prepared with a lot more information in your back pocket.
In the next couple of slides show the market size and opportunity as well as your go-to-market strategy. The go-to-market plan shows who your target market it and the details of how you will acquire customers and what the cost will be. For example, will you be advertising on google? Will you use social media to grow and if so which platforms? what, if any, partnerships will drive sales? Will there be direct selling, eg via a website? One key concern for investors will be understanding the customer acquisition cost (CAC), which should be less than the LTV, or lifetime value, of the client in order for the business model to be viable.
In the following 2 slides focus on competitive landscape. Remember there are always competitors to your product/service, so highlight your competitive advantage, and why you think you can overtake others in the space. A graph works really well here to show pictorially what your value proposition is vs your competitors and why that makes for a strong competitive position.
In the next slide lay out the team (employees, advisors, consultants, prior investors). This should show the background,experience, education of the employees, advisors, existing investors to demonstrate why this is the right team. The VC will want to get comfortable that this is the right team to be able to execute on the vision of the company.
Then lay out the financial forecast. This is tricky as your financial model in your spreadsheet will be very detailed but the slide for the investor needs to be high level and demonstrate you have thought well about the key financial components, such as revenue, and are able to explain key trends and assumptions.
Then bring it back to where you are today in terms of keymile stones achieved in the business so far and any funds raised.
The final slide is the investment ask amount you are asking for, terms you want and also importantly what you plan to use the money for.
Pitching and Follow up
When you are pitching, it’s important to know your content cold, keep the tone positive but professional and advocate differences.
Post meeting, be sure to send a follow up email and be organized about tracking your investor interactions.