Tips on Investor Pitches

Wednesday Jun 30, 2010 by Dan Rosen - Principal, Highland Capital Partners

Hey there, New England entrepreneurial ecosystem.  In this, my inaugural blog post on VentureFizz, I’d like to offer some simple, practical advice about the ‘investor pitch’.  For the purposes of this post, let’s use Content and Delivery to categorize these tips, since a good presentation stems from both.

CONTENT

1.    Structure the Pitch – Create a logical outline for the presentation that will be easily digested by the potential investor.  At Highland, we like to think about every opportunity in terms of four factors: Team, Market, Product and Financial.  While I could spend a whole post on each, for now I think it’s enough to highlight the importance of keeping to a structured presentation flow and to suggest some key areas to cover.

2.    Less Is More – I typically like to see presentations in a 1 hour meeting slot be ~15-20 slides.  If you only have 30 minutes, you might want to cut this back to 5-8 slides or even just use the first meeting as an informal opportunity to talk through the idea.  By the way, if an investor can’t figure it out in 15 slides, 15 more won’t help the problem.  Keep the less exciting, deeper dive data and back-up in the Appendix.

3.    Looks DO Matter – Find yourself a UI expert, stat.  For some of you, this is just asking a designer friend for a favor, but even if you need to pay a little for this, I HIGHLY recommend it (there are plenty of freelance UI folks out there and, since you’ll likely need web UI work once funded, they should want to help you on the cheap).  Despite popular opinion, VCs are merely consumers, so make the pitch pleasing to consume.

4.    No Gimmicks – Stay away from animation and gimmicky slide shows.  Making presentations with special effects is just distracting.  Let the substance do the selling and keep in mind that you want your audience looking mostly at you, not the screen.

5.    Keep It Simple – Keep the amount of text per slide to 3 to 5 bullet points MAX.  Again, you don’t want investors wasting time trying to read and understand paragraphs on the screen.  They should be focusing on you.

6.    Pretty Pictures – Use infographics wherever you can to replace text (e.g. market projections, product architectures, competitive matrices, etc…).  Most people absorb complex concepts faster and better from well-constructed graphics than they do from text.  By the way, make sure all projections trend up and to the right!!

DELIVERY

1.    Punctuality – Arrive 15 minutes early.  Give yourself time to setup.  You may be frustrated to learn that the investor is running late, but don’t let YOUR tardiness limit your pitch time (or make a bad first impression).

2.    Be Prepared – Do your homework in advance.  Find out who you’re meeting with and understand the investments they have made and a bit about them.  It should be easy; we all have profiles on our websites.

3.    Time Management – Make sure to find out in advance how much time you have with the prospective investor.  You may have prepared for an hour presentation, only to hear that you now have 20 minutes.  This way, you will walk in prepared to provide the right level of detail for the time window allotted.

4.    Eye Contact – Don’t read off the slide.  Be sure to make eye contact with your audience (without staring of course) and, if there are multiple people, periodically make eye contact with each.

5.    Be Sincere – Similar to the ‘No Gimmicks’ section above.  Don’t be overly choreographed in your delivery.  The best presentations appear natural.

6.    Passion, Please – Investors want to get excited about your idea and you.  Help them by being excited yourself – it’s contagious (although if you aren’t excited about your startup, you probably just shouldn’t be trying to raise money).  Jules Pieri wrote a good VentureFizz post on this entitled “Once more with feeling” – check it out here: http://bit.ly/9UD0RI

7.    It’s Personal – Find a way to bring things to a personal level, if possible, at either the beginning or end of the pitch.  Keep to simple, safe topics like weekend activities, local sports teams or even common acquaintances.  Remember that this is just the start of a discussion and that the biggest factor in an investor’s decision process will be whether you are a person they want to work with. 

8.    3 P’s: Perspective, Persistence, Patience – There is a great quote from Winston Churchill that is useful when thinking about investor first pitches: “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”  The goals of your first meeting are to make a good impression, pique their interest and, most importantly, get a second meeting!

Last, but not least: Meeting with investors can be time consuming and painful, but it can also be incredibly informative (about potential customers, partners and competition) and fun at the end of the day.  For most entrepreneurs, their startup is like their kids, they love talking about them.  So, have fun and remember that when the process is all over, it will have been worth it.

Good luck!

-Dan

Dan Rosen is a Principal with Highland Capital Partners in Lexington, MA.  You can follow him on Twitter: @venturedan.

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