The following article by Bill Reichert is a good summary of “How-To Pitch.”
For StartupCamp, an effective 5 minute pitch should cover the points in slides 1,2,3,4,5,6, and 8.
Perfecting Your Pitch
Endless articles, books, and blogs have been written on the topic of business
plan presentations and pitching to investors. In spite of this wealth of advice,
almost every entrepreneur gets it wrong. Why? Because most guides to pitching
your company miss the central point: The purpose of your pitch is to sell, not to
teach. Your job is to excite, not to educate.
Pitching is about understanding what your customer (the investor) is most
interested in, and developing a dialog that enables you to connect with the head,
the heart, and the gut of the investor. If you want advice about pitching, you can
ask a venture capitalist, but you probably won’t get a very good answer. Most
VCs are analytic types, and so they will give you a laundry list of topics you
should cover. They won’t tell you what really floats their boat, mainly because
they themselves can’t articulate it in useful terms. “I know it when I see it,” is
about the best answer you’ll get.
What is the investor most interested in? Contrary to popular belief, the venture
capitalist sitting at the other end of the table glaring inscrutably at the presenting
entrepreneur is not thinking, “Is this company going to make a lot of money?”
That is the simple question that most entrepreneurs think they are answering, but
they are missing the crux of the venture capital process. What the investor is
really thinking is, “Is this company the best next investment for me and my fund?”
That is a much more complex question, but that is what the entrepreneur has to
To win over the hearts and minds of investors, your pitch has to accomplish three
§ Tell a good, clear, easy-to-repeat story—the story of an exciting new startup.
§ Position your company as a perfect fit with other investments the investors
have made and their firm is chartered to make.
§ Beat out the other new investments the firm is currently considering.
These latter two issues are beyond the scope of this modest guide. So for now,
let’s just concentrate on telling a good story.
Tell a good story
Most of the articles on pitching are generally right about the topics, even if they
miss the nuance (sell, don’t explain). But don’t take any template as graven in
stone. Your story may require a moderate or even a dramatic variation on the list
of slides below. You may need to explain the solution before you can explain the
market; or if you are in a crowded space you may need to explain why you are
different than everyone else early on in the conversation; or you may want to
drop some very impressive brand-name customers before you explain your
product or your market. The one thing you may not do is expand the number of
slides to 20 (or 30 or 50)! Other than that, let the specifics of your situation
dictate the flow of your slides.
Nevertheless, it is useful to have a guide. With the caveats above in mind, here is
a basic outline for your pitch:
Company name, location, tagline, presenter’s name and title. If
there are multiple team members participating in the pitch, put names on the next
slide instead. Key objective: Everyone in the room should know the basic idea
and value proposition of the company, including the target market, before the
next slide is shown. All the words should not be on this slide, but with one or two
sentences orally, reinforcing and extending the tagline, everyone should have a
foundation for what is to come. Cardinal sin: Launching into your presentation
with an investor at the table thinking, “I wonder what these guys do?”
Intro Slide: Team.
The three or four key players in the company. For some
reason, everyone puts the team slide at the end, but investors almost always
want to know this at the beginning, and it is just common courtesy to make sure
everyone is introduced. But make this short, crisp and relevant. This is not the
time to share everyone's life story, or detail the resumes of all six members of the
advisory board. Focus on a significant, relevant accomplishment for each person
that identifies that person as a winner. In 10 to 15 seconds, you should be able to
say three or four sentences about your CTO that says everything the investors
want to know about him or her at that moment. Key objective: Investors should
be confident that there is a good credible core group of talent that believe in the
company and can execute the next set of milestones. One of those milestones
may be filling out the team, and so it is important to convey that the initial team
knows how to attract great talent, as well as having great domain skills. If there is
a gap in the team, address it explicitly, before investors have to ask about it.
Slide 1: Company Overview.
The best way to give an overview of your company is to state concisely your core value proposition: What unique benefit will you provide to what set of customers to address what particular need? Then
you can add three or four additional dot points to clarify your target markets, your unique technology/solution, and your status (launch date, current customers, revenue rate, pipeline, funding needed). Key objective: Flesh out the foundation you established at the beginning. At this point, no one should have any question about what it is that your company does, or plans to do. The only questions that should remain are the details of how you are going to do it. Another key objective
you should have achieved by this point in your presentation is to make sure that if there are some compelling brand names associated with your company (customers, partners, investors, advisors), your audience knows about them. Feel free to drop names early and often—starting with your first email
introduction to the investor. Brand name relationships build your credibility, but do not overstate them if they are tenuous.
Slide 2: Problem/Opportunity.
You need to make it clear that there is a big,
important problem (current or emerging) that you are going to solve, or
opportunity you are going to exploit, and that you understand the market
dynamics surrounding the opportunity—why does this situation exist and persist,
and why is it only now that it can be addressed? Show that you really understand
the very particular market segment you are targeting, and frame your market
analysis according to the specific problem and solution you are laying out. In
some cases, however, the problem you are attacking is so obvious and clear that
you can drop this slide altogether. You do not have to tell investors that there are
a lot of cell phones out there, or that teenagers like to socialize. Save yourself,
and the investors, the pain of restating the obvious.
Slide 2.1: Problem/Opportunity Size.
Even if your market opportunity is not
obvious, in most cases you can assert the size of your opportunity on slide 2. But
sometimes you may need a dedicated slide to clarify the factors that define the
size and scope of the opportunity, particularly if you are going after multiple
market segments. Or there may be a unique emerging trend that requires
explanation. Do not use this slide to quote the Gartner Group or Frost & Sullivan;
show that you really understand where your prospective customers are from the
Slide 3: Solution. What specifically are you offering to whom?
Software, hardware, services, a combination? Use common terms to state concretely what
you have, or what you do, that solves the problem you’ve identified. Avoid
acronyms and don’t try to use these precious few words to create and trademark
a bunch of terms that won’t mean anything to most people, and don’t use this as
an opportunity to showcase your insider status and facility with the idiomatic lingo
of the industry. If you can demonstrate your solution (briefly) in a meeting, this is
the place to do it.
Slide 3.1: Delivering the Solution.
You might need an extra slide to show how
your solution fits in the value chain or ecosystem of your target market. Do you
complement commonly used technologies, or do you displace them? Do you
change the way certain business processes get executed, or do you just do them
the same way, but faster, better and cheaper? Do you disrupt the current value
chain, or do you fit into established channels? Who exactly is the buyer, and is
that person different than the user?
Slide 4: Benefits/Value.
State clearly and quantify to the extent possible the
three or four key benefits you provide, and who specifically realizes these
benefits. Do some constituents benefit more than others, or earlier than others?
These dynamics should inform your go-to-market strategy, and your
product/service roadmap, which you will discuss later.
Slide 5: Secret Sauce/Intellectual Property.
Depending on your solution, you
might need a separate slide to convince investors that no one else can easily
duplicate or surpass your solution (assuming that's actually true). If you are in a
business sector in which intellectual property is important, this is where you drill
down into your secret sauce. This is usually some combination of proprietary
technology, unique team domain expertise, and unique partnership. Boil this
down to simple elements and terms, devoid of jargon. Do not walk the audience
through a detailed tour of your product architecture. Instead, highlight the
elements of your technology that give you unique potential for leverage and scale
as you grow. If you do slides 4 and 5 well, it will be easy to make the case for
Slide 6: Competitive Advantage.
You may be good, but are you really better
than everyone else? Most entrepreneurs misunderstand the objective of this
slide, which is not to enumerate all the deficiencies of the competition (as much
fun as that may be). Just because you have really cool technology does not
mean you will win. You need to convince the investor that lots of folks will buy
your product or service, even though they have several alternatives. And don’t
forget that the toughest competitor is often the status quo—most prospective
customers can muddle on without buying your solution or your competitor’s
solution. The best way to convince an investor that you really do have a better
mousetrap is to have referenceable customers or prospects articulate in their
own words why they bought or will buy your offering over the alternatives. Use
this slide to summarize the three or four key reasons why customers prefer your
solution to other solutions. Many entrepreneurs have been coached to use a
four-square matrix that shows that they are in the upper right-hand quadrant, but
this has become a joke in the venture community. Check-boxes are better, if they
are not abused. Make sure your check-box criteria reflect the market's
requirements, not just your product's features.
Slide 6.1: Competitive Advantage Matrix.
Depending on how important the
analysis of competitive players is in your market segment, you may need a
detailed list of competitors by category with their strengths and weaknesses in
comparison with your company. Preferably, you develop this as a “pocket slide”
to be used for Q&A, if necessary. Whether or not you present this slide, it is
important that you do your homework on the competition, and that you don’t
misrepresent their strengths or their weaknesses.
Slide 7: Go to Market Strategy.
The single most compelling slide in any pitch is
a pipeline of customers and strategic partners that have already expressed some
interest in your solution—if they haven’t already joined your beta program. Too
often this slide is, instead, a bland laundry list of standard sales and marketing
tactics. You should focus on articulating the non-obvious, potentially disruptive
elements of your strategy. Even better, frame your comments in terms of the
critical hurdles you need to get over, and how you are going to jump them. If you
don’t have a pipeline, and there is nothing unique or innovative about your
strategy, then drop this slide and make the elements of your sales model clear in
the discussion of your business model (next slide).
Slide 8: Business Model. How do you make money?
Usually by selling
something for a certain price to certain customers. But there are lots of variations
on the standard theme. Explain your pricing, your costs, and why you are going
to be especially profitable. Make sure you understand the key assumptions
underlying your planned success and be prepared to defend them. What if you
can't sustain the price? What if it takes twice as long to make each sale? What if
your costs don't decline over time? Many investors will want to test the depth of
your understanding of your business model. Be ready to articulate the sensitivity
of your business to variations in your assumptions.
Slide 9: Financial Projections.
The two previous slides above should come
together neatly in your five-year financial projections. You should show the two or
three key metrics that drive revenues, expenses and growth (such as customers,
unit sales, new products, expansion sales, new markets), as well as the revenue,
expense, profit, cash balance, and headcount lines. The most important thing to
convey on this slide is that you really understand the economics and evolution of
a growing, dynamic company, and that your vision is grounded in an
understanding of practical reality. Your financials should tell your story in
numbers as clearly as you are telling your story in words. Investors are not
focused on the precision of your numbers; they’re focused on the coherence and
integrity of your thought process.
Slide 10: Financing Requirements/Milestones.
It should be clear from your
financials what your capital requirements will be. On this slide you should outline
how you plan to take in funding—how big each round will be, and the timing of
each—and map the funding against your key near-term and medium-term
milestones. You should also include your key achievements to date. These
milestones should tie to the key metrics in your financial projections, and they
should provide a clear, crisp picture of your product introduction and market
expansion roadmap. In essence, this is your operating plan for the funds you are
raising. Do not spend time presenting a "use of funds" table. Investors want to
see measures of accomplishment, not measures of activity. And they want to
know that you are asking for the right amount of money to get the company to a
This slide is almost always wasted. Most entrepreneurs just put
up three or four dot points about how wonderful their investment opportunity is.
Generally the words are the same words that investors hear from scores of other
entrepreneurs, such as, “We have a huge opportunity, and we will be the
winners!” Your key objective on this slide is to solidify the core value proposition
of your company in words that are memorable and unique to your company. If
the venture investor in the room has to give a short description of your company
to his partners, these are the words you want used. This is a good place to
reinforce your tagline, or mantra—the short phrase that captures the essence of
your message to investors. The best solution to creating your summary slide is to
imagine that this is the only slide you will ever be able to present. If you had to do
your whole pitch in one slide (with 30 point font), this is that slide.
So here we have a good general outline for pitching your company. But
remember, it’s about selling your investment proposition, not about covering
points. Don’t get fixated on using this or any other template. You should know the
issues about your company that investors are most concerned about. Those are
the issues you need to concentrate on. Make sure you address all the predictable
“burning questions” as early as you can in your presentation, even if it means
violating the sequence above.
Tips on effective pitching
How do you turn a pitch from a monolog to a sale? Make sure every point you
make connects with your audience. Keep your text very, very short. Really.
Please. Use charts and pictures if you can. And engage your prospect. Ask
questions. “Do you think this market opportunity is interesting?” “Have you seen
anyone else addressing this problem?” “Do you think CIOs would be interested in
a solution like this?” You may get some tough responses, but you will know a lot
more about what is going on in the investor’s mind, and you will be engaging
them in your story—instead of letting them play with their Blackberries under the
Some additional tips to improve the effectiveness of your pitch:
§ Make sure that everyone in the room is introduced. Rarely do entrepreneurs
ask the investors in the room to introduce themselves. While it is appropriate
to be familiar with each investor’s bio (assuming it is on the web), it’s fair to
ask something like, “What investments have you been looking at recently?”
And if there are some other faces in the room, you should absolutely have
them introduce themselves and provide a little background.
§ Don’t use a feel-good, visionary “Mission Statement” on your overview slide.
Mission statements have also become a joke in the venture industry. It’s like
saying, “Our projections are conservative.” Focus on making sure your
statement of your company’s value proposition is crisp, clear, and unique.
§ Prepare good use cases. Sometimes, no matter how simple and clear the
description of a product, what the investor really needs is a concrete example
of how people will actually use it. In some cases there will be multiple different
use cases. You may need to explain these to get your point across.
§ Drop names, early and often. If you really have some brand names involved
in your company—as customers, as partners, as members of the team—don’t
keep them a secret for the first nine slides; make sure the investor knows
about them early in the presentation. But be prepared for the investor to
contact every single name you drop—whether it’s a person or a company. If
you are going to drop names, they had better be real.
§ Make sure you can tell the entire story in 10 to 15 minutes. Even if you have
time, your total presentation should be no longer than 20 minutes. You want
to have time to engage the investors and discuss their questions or concerns.
If you think you have additional critical points that have to be made, prepare
“pocket slides” that you can put up if the topic arises.
§ Average entrepreneur pitch: 38 slides. Average VC attention span/cranial
capacity: 10 slides. Do the math.
§ Learn how to control the flow of the meeting, without seeming inflexible or
anxious. Watch and listen. Body language and questions will tell you if you
are okay deferring a point or if you need to address it immediately. If you let
your audience take over the flow, you will probably wind up creating a
confusing, incomplete impression of your company. But if you don’t address
the “burning questions” early and effectively, the investors won’t hear
anything else you say.
Don’t lie. You would think this goes without saying, but in their enthusiasm for
their creations, entrepreneurs tend to slip across the line all too often. Please
do not interpret our exhortation to “sell” as an endorsement of hype,
exaggeration, misrepresentation, spin, or lying. The best salespeople are
credible and trustworthy. It is more important that investors trust you than that
they understand every nuance of your business.
§ Pitching investors is different than pitching customers. If you have a sales
presentation for customers, do not think you can simply modify it slightly for
pitching to VCs. Start from scratch, keeping in mind with every slide that an
investor has a very different perspective than a customer.
§ You don’t have to be “conservative,” but you do have to be realistic. Almost
every entrepreneur fails to be realistic about how long things take in the real
world (vs. the spreadsheet world). Whether it’s the time to complete product
development, or the time to close the next ten sales, entrepreneurs are
pathologically optimistic. As with your financials, find examples of comparable
challenges addressed by other companies, and use that data in your model.
§ Never ever put so much text on a page that the investor has to read it.
Everything should be short, content-rich bullets in a font large enough to read
without squinting. The words are simply reinforcement of the points you are
making orally. Pictures, graphs, and charts should be uncluttered and make
clear, compelling points. If they have to be deconstructed and explained piece
by piece, you will lose focus and momentum.
§ And never use your presentation stack as a standalone document. It is
perfectly okay if it is not readable when you are not around. That’s the job of
your executive summary or your business plan.
A good pitch is very rare. It is so hard executing on everything else that has to be
done to build a successful company, pitching often suffers. But the ability to pitch
is a key indicator for investors—if the entrepreneur doesn’t know how to sell, how
can he or she build a great company?