If you have bootstrapped your startup to the point where you have a business that both merits and would benefit from outside investment then you may need to consider seeking investment. Here are some common formats we have seen for an investor presentation.
Our Suggested Investment Presentation Format
The format we like suggest for an investment pitch is normally 8-10 slides (with more backup, but where you can get through the basic pitch in 5-6 minutes and start taking questions):
- Summary / Elevator pitch
- Problem / Need
- Your Solution / Value Proposition
- Secret Sauce / Magic / Proprietary Technology / Unfair Advantage
- Market / Business Model (How you make money)
- Go To Market Plan (e.g. customer acquisition / sales model / distribution channels)
- Competition / current alternatives / status quo
- Financial Projections and Key Metrics (Impact of Funds on Business / value created)
- Traction / Results to Date / Timeline with Key Milestones for use of funds
You should also ask your prospective investor if they have a preferred format and only e-mail them a one page an exec summary prior to the meeting.
Three Key Points About Seeking Investment
- Whenever you are planning to take an investment from someone the calculation you have to make–and that they should agree with–is will you be able to satisfy their return on investment requirements. So, maintaining a certain level of ownership, while very important to you, will matter less to them than how much and when you plan to pay them back.
- You also need to be very clear as to why you need the money. In particular, your need to keep the business operating or to be paid a salary are not compelling. It’s best if you can present a plan for accelerating an existing business based on proven success and a clear understanding of the market.
- Take careful notice that the terms and conditions that come with a financing (in particular liquidity preferences) and have your own attorney review them. They can often have a much larger impact on how much money you put in your pocket when your (former) business (goes public or) is acquired than the percentage of common stock you own after the first round of financing.
- Technology risk: is the product feasible, can your team create it? For many software products this risk is low.
- Market Risk: is the product desirable, will people pay for it? For a new product category this can be a significant risk. Where clear alternatives exist that provide proof of demand this question becomes: can you establish a unique selling proposition in the face of competition? For a B2B product you normally need to close business to address this risk.
- Business Risk: can the product be sold at a profit when all costs are included? This is often the key challenge: can you build a viable business once you have established you can build the product and people are willing to pay (something) for it.
You will need to address all three, addressing technical risk is typically a spending plan: investors want to know how you plan to repay them a multiple of their investment and for B2B that will require revenue.
Get To the Point Quickly
You normally only have a few minutes to capture an investor’s attention. Practice your presentation so that it flows smoothly in five to six minutes. Prepare backup materials and elaborate when based on the questions you get and their depth and level of interest. Often someone may have made an introduction to get you in the room with an investor. Your lack of preparation will reflect poorly not only on your team but on whoever introduced you: don’t set fire to your social capital.
Some Other Investment Presentation Templates
- Guy Kawasaki
- Pitching Hacks by Venture Hacks
- Dave McClure 500 Startups
- Elevator pitch
- 500 startups
- We solve [problem] by providing [advantage], to help [target] accomplish [target’s goal]. We make money by charging [customers] to get [benefit].
- Crossing the Chasm
- For (target customer)
- Who (statement of the need or opportunity)
- The (product name) is a (product category)
- That (statement of key benefit – that is, compelling reason to buy)
- Unlike (primary competitive advantage)
- Our product (statement of primary differentiation).
- 500 startups
- SKMurphy Newsletter Archive
- You Have Five Minutes, Practice
- Without a Revenue Hypothesis Your Business Model Is Just a List of User Activities
- Mapping the Path To Your First Dollar of Revenue
- Don’t Give Your Investor Pitch To Customers, They Have Different Questions
- Pitching Hacks Has $20 Worth of Advice for Bootstrappers As Well
- Three Key Points About Seeking Investment
- Three Excellent “Micro Hacks” from VentureHacks
- Don’t ask investors what they think. Ask your customers.
- Competitors copy success, not ideas.
- Traction speaks louder than words.
- DocSend / Eisenmann study of 200 pitches: https://docsend.com/view/p8jxsqr
related TechCrunch summary: Lessons From A Study of Perfect Pitch Decks