Perfecting Your Pitch

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 answer.

To win over the hearts and minds of investors, your pitch has to accomplish three
things:

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. The latter two issues are
beyond the scope of this 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.

Cover Slide:

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
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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. Show that you
really understand where your prospective customers are from the ground up.
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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 yours.

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.
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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
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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 meaningful milestone.

Summary Slide.

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 table.

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
 5

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.

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.

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.

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
 6

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.

Here’s wishing you a great investor pitch ! Good Luck !