The Essential Prep Guide to Pitching Investors (Part 2)
This article is the second half of a two part series helping founders research the right investors for their company and maximize their chances of securing the best partner. If you have not read Part 1 yet, please do so first!
OK, so you’ve secured the pitch meeting. Great work! The next step is to prepare your slide deck carefully. Although the tone and appearance of your pitch deck might vary from investor to investor, there are six slides that need to be included in any pitch deck, no matter the situation.
Crafting the Perfect Pitch Deck
This one is pretty simple and obvious: what is the problem that your company is trying to solve? Be sure to paint a clear picture of how many other people are currently experiencing these problems to give investors an idea of the size of your addressable market.
What is your solution? Why is it 10 times better than what is currently offered on the market and why do you believe that people will abandon their old ways to use your solution? Why has no one else done what your team is doing, and why are you and your cofounders uniquely positioned to offer this solution to the world?
It is extremely important to lead with traction because there’s no better way to catch an investor’s attention than with a nice graph showing your company’s rocketship growth. How much progress have you made? What are the key drivers of growth moving your business forward, and how can you explore new channels to continue to accelerate?
4. Business model/KPIs
After you wow the investors with your traction slide, they will likely want to dig deeper into your business. What are your margins like? What are the channels you are using to acquire new customers? What are the costs associated with each channel? What is the lifetime value of the customer? What does retention and engagement currently look like?
Assuming everything looks great so far, the next thing that will make or break your pitch is your team slide. Who are the key players building this company? What does each person bring to the table and what unique experiences make every one of them an invaluable asset?
6. Previous Funding/Ask
How much previous funding have you taken? Do you have any notable investors or advisers? How much are you looking to raise now and at what valuation? Always end your slide presentation with a clear picture of how much money you are looking to raise as it provides a clear transition point from presentation to potential negotiation.
You may also choose to include some appendix slides to help go into more detail on frequently asked questions. Also, to ensure that everything is clear and easily understood we recommend that you practice your pitch in front of a few friends who are unfamiliar with your business for a “dummy check”.
Pro tip: If you don’t have a design background, invest in getting a designer to help out with the slides. Many VCs are sticklers for good design, and you don’t want one thinking in the back of his/her head “ wow, the slide is ugly” while you are presenting.
Pitch Day Etiquette
- Arrive early for your pitch. This can’t be emphasized enough — being punctual is indicative of being responsible and valuing the time of the investors you are going to pitch to. A good rule of thumb is to arrive ten minutes early so that you have time to drink some water, get your slides set up, and gather your thoughts.
- While pitching, do not expect to run through the entire presentation interrupted — in fact that’s usually a bad sign if you are not interrupted, because the investors are not engaging with you and are probably bored/uninterested. Be prepared to answer questions in the middle of slides, but make sure it does not turn into an unnecessarily long tangent that detracts from the overall timing of the presentation. Which brings us to…
- Manage your time wisely. Most meetings will be booked for an hour, and ideally you want to aim to spend 20 minutes pitching and 40 minutes discussing. Always assume that the VCs you are pitching have another meeting right after you, so conclude the meeting on time to be respectful for everyone’s busy schedules.
- Offer to follow up for a later conversation instead of attempting to rush through everything, especially if the discussion is getting very detailed and nitty-gritty. This will give you more time to prepare any relevant materials and also another reason for following up.
After The Pitch
Depending on how the meeting went, there are a multitude of options and strategies on how to get to a clean term sheet quickly, or how to gauge the level of interest of an investor. We at Know Your VC are currently collecting founder experiences to publish a comprehensive post pitch guide early next year, so stay tuned!