The Lowdown On The Final VC Panel Pitch
The information age and our growing desire to share our experiences have democratised the investor/entrepreneur interaction.
A simple google search will bring an abundance of advice, insights, and tips from seasoned VCs and founders on when to fundraise, how to find the right investor, how to negotiate mutually agreeable terms, and of course how to pitch.
Despite all this information, what is still not talked about, is the final VC panel presentation — the final moment before a VC firm decides whether or not they will put a term sheet on the table.
While investment panel structure varies between different Venture Capital firms, at Nauta Capital, once our investment teams have done months of meetings with the founder and the team, conducted an industry, market and technology deep dives as well as financial due diligence, the time comes when the company is invited to present in front of the team.
For us, these presentations are not only attended by the firm’s Partners, but also by our whole team. What’s more, it’s a company-wide meeting whereby anyone attending can ask questions.
Needless to say, presenting for 2-hours in front of a panel — let alone an audience that can shape the future direction of your company — can be nerve-wracking for any entrepreneur.
With that in mind, we wanted to share some of the key factors that differentiate an initial pitch from the one needed for the final investment panel and share some common pitfalls founders should avoid for that final ride.
The Pitch Deck
As a founder, once you know you’re about to fundraise you prepare a pitch deck. It’s generally agreed within the investor/founder community that a fundraising deck would include the following sections:
- Executive Summary
- Problem
- Solution
- Market Opportunity
- Competitive landscape
- Business Model
- Revenue model
- Traction / Customers
- Financials
- Team
- The ask
Assuming the initial deck caught the attention of the VC, after months of meetings and fleshing out ideas, and perhaps achieving new milestones, your original pitch deck will likely to have also evolved along the way.
And in most cases at Nauta, the founder and the lead VC will work intensely to streamline the deck’s key content whilst introducing crucial new sub-sections for that final investment panel.
While the overall structure of the deck will not change, there are sections within the deck that will go through a significant transformation.
These often are the problem, solution, financials, customers and competitive landscape. The sections, which in the initial deck may have only contained summaries, will now be expected to be more detailed and compelling during the final presentation.
Indeed, these sections will now be expected to answer or cover the following:
Problem
Clearly quantifiable and qualifiable nature of the problem and its significance across different markets.
Pitfall tip: Try to link the origin story of your business to grab attention.
Solution
Explain the value proposition for customers — not just what the product is — but how it helps them achieve their objectives and answers their pain points.
Pitfall tip: Don’t forget to create a natural link in your presentation between the problem and solution as seen from Mixpanel’s deck below.
Competitive landscape
Specify why your company’s technology, process, approach or model is better than those you have highlighted as the competition.
Pitfall tip: Don’t just do add logos to your competitive matrix if you’re not able to clearly articulate how they compete with your company (past, present and future) on all the above areas.
Customers
Include 1–2 real-life case studies of a core customer and value of your service/product to them.
Pitfall tip: Don’t forget to include the revenue, cost of acquisition and lifetime value as well as up-sell opportunities.
Financials
This section not only needs to be more detailed but also more transparent. Some of the new sections expected seen here include: historical. present and future (projections) financials, a cap table, funding sought and the planned use of proceeds, and your plans for the next 18 months and /or your exit strategy.
Pitfall tip: Whether you think you’ll be the next unicorn or dragon, be ready to articulate your vision with conviction.
The Aesthetics & Delivery
At this point, it’s also important to remember the impact of a well put together, nicely designed and easy-to-follow presentation.
If you’re a founder who is not big on aesthetics, colour harmony or formatting, it’s worth involving a designer or someone within your team who has an eye for design.
Some may think that a fundraising presentation should not be about design, but a well-designed presentation, which is clear to follow and tells a compelling story can really shift the odds in your favour.
Not only does it show that you’ve put time and effort into the presentation, but also that you are thinking about your brand’s visual identity and how you want your future shareholders to engage with your brand.
On the other hand, the clarity and flow of the presentation will help you deliver an engaging presentation that is easy to follow.
Which leads me to the second part of the presentation: the delivery.
By this, I mean the entrepreneur’s ability to convey what is so unique about what he/she is doing in one simple sentence to get that ‘the wow factor’.
Even the most complex technological propositions need to be explained in plain words. If not, you risk your audience thinking that the solution is not unique or is too complex for anyone to understand — including your potential customers.
What’s more, building a company is a team effort. If the founder/CEO covers some sections within the presentation, it’s also perfectly reasonable to have your CTO do the product demo slide, or your CFO cover the financials. After all, it’s a chance to show how well you work together as a team and showcase each senior management team’s core expertise to your potential investors.
The Acronym-Powered Metrics
Every industry has its fair share of lingo and acronyms and the VC industry is no different.
Beyond the investor industry-specific terminology most founders probably don’t have a real need for, there are certain metrics we look for and which entrepreneurs need to have on top of mind during their presentations.
Without diving into details in this section (let’s face it, the metrics deserve a full blog post), below is a summary of some of the numbers we pay very close attention to:
- MRR — monthly recurring revenue
- ARR — annual recurring revenue (MRR*12)
- CAC — customer acquisition cost
- LTV — lifetime value (of a customer)
- SAM — serviceable available market
- ARPA — average revenue per account
- Churn Rate
When it comes to these metrics, a founder should not only know these numbers, but he should be comfortable communicating their past, present. and future positions.
These figures, not only showcase your current traction, growth, potential, and business strategy, but they are also the unit economics that can show how capital-efficient or capital intensive the company is — something that plays a big part in Nauta’s desire to invest in a company.
Lastly, it’s worth mentioning that while the final investment panel can be intense for a founder, most of the heavy lifting takes place over a period of weeks if not months and the expected content heavily depends on the stage (late Seed vs Series A) of the company.
Ps: We have a soft spot for capital-efficient founders so if you are fundraising or know a B2B European startup we should talk to give us a shout or just keep in touch by signing up to our newsletter 👇🏼 or connect with us on Twitter.
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