We were about an hour into a board meeting the other day when the management team laid an extremely impressive year over year growth figure on the table for the first two quarters of 2008. One of the investors present in the meeting reacted by saying:"That's incredible. You guys should have put that on slide one!"
He's absolutely right. What you put in the starting and ending slides of a presentation - the initial impact and the lasting impression - is important when you're presenting your deck to investors.
What you put in the middle is there merely to explain and validate your business idea and approach to market, and cement your claim to eventual market dominance. If you want to read the best advice ever, check out Guy Kawasaki's classic 10/20/30 post about presenting to VCs - after you finish this, of course.
My personal view is that you need to lead with credibility, and close with opportunity. Because the investors need to believe not only in your idea, they need to believe in you. And the earlier you are able to establish evidence as to why you will take their money and create a success, the more interest they will have in your idea.
I've seen a number of presentations, in investor meetings and at conferences, where the presentation had clearly been discussed too many times (or too few) prior to the pitch. The entrepreneur didn't grab me (or anyone else) at slide one, and then waded through a long presentation to an indecipherable appendix of tables filled with 8pt data.
When presenting to a VC, your first slide needs to good enough to force the investor to put down their BlackBerry/iPhone. Which means it needs to have these three things going for it:
1. An opportunity so good you're ready to mortgage your grandmother's house
2. Glowing reviews from several large alpha/beta reference customers
3. A team comprised of at least one person that has scaled a large business
I'm not kidding re the first point. Back in 1985, I was pitching a media company in LA on a joint venture, when, about fifteen minutes in, the guy held up his hand and said "how much money are you prepared to invest in this yourself?"
My hesitation was all he needed. He smiled and put out his hand and said, "Come back and see me when you're ready to stick your neck on the line."The bottom line is, if you're not ready to risk your own money or time, you are not ready for venture investment.
Point two is something that engineer-types struggle with - and often the reason they get lousy initial pre-money valuations. But you're not going to get funding without some evidence that the market is ready for your idea, or better still, gagging for it.
Note: If you don't like going out and finding customers, you'd better find someone that enjoys this - I once hired a sales person who couldn't bear not to be on the phone selling. Find a person like that and bring them in as your co-founder.
The final point is important. When you're trying to get a return on an investment, execution is everything - and having someone on the team that has delivered an idea to market before and turned it into accounts receivable is critical. I know what you're thinking: my idea isn't jaw-dropping yet, I don't have any customers trying it yet, and I have never executed a venture-backed business plan before.
None of that matters - all of those issues are solvable. The point of this blog is to simply say, please solve them first - before you pitch for investment. Act on these tips - polish your idea, sell some customers, recruit some co-founders - and make sure your slide one is everything it can be when you go for the gold. We want to see you succeed!
John is a Partner at Hatcher Plus, the leading data-driven venture capital investment firm. John has extensive commercial experience at the senior management level, having been the Chief Executive Officer of Authentium, Inc. the Managing Director, Asia, of WorldSpace, and CEO of Hatcher, the precursor company to Hatcher+. A tenacious and driven executive with longstanding board-level and C-suite level management experience within high-growth companies, John also brings a strong history of capital raising from an extensive network of investors globally. As Chairman and CEO of cybersecurity pioneer Authentium (acquired by CYREN in 2010), John co-authored three US patents and developed and sold cybersecurity solutions to some the largest organizations in the world, including the US Department of Commerce, NASA, AOL, British Telecom, Comcast, Cox Communications, Google, McAfee, Microsoft, Symantec, and Telstra. As CTO at Hatcher+, DocDoc, Heardable, and ThoughtRiver, John has designed and developed several highly-innovative technology platforms using cutting-edge approaches to data processing, user interface design, and workflow optimization. John is a frequent blogger and an in-demand speaker at venture events globally, and has extensive experience implementing ESG solutions as Chairman and/or board member of numerous start-ups, including director roles at trade finance provider ASYX and payment aggregator Mozido, and roles as Chairman of MENA-based financial services pioneer Telr, and the leading Cambridge-based legal services technology company, ThoughtRiver.
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