Usually, when I watch start-up companies give a pitch to potential investors, I’ve got the easy job: sitting in the audience of angel investors or mentors with a scoring sheet in my hand and trying to figure out if the presenting company should become part of an accelerator, join the ranks of companies selected to present at an event, or secure some kind of funding from a group I’m part of. I’ve been doing that since the mid-1990’s.
I’ve helped dozens of companies get ready for investor presentations, but it’s been awhile since I personally participated in a pitch. Last week, I got to experience it from the site of the eager entrepreneurs waiting downstairs at the Tech Church in Dallas, where the first Quick Pitch day for a brand new start-up accelerator called Health Wildcatters was taking place.
I was there with Lamarque Polvado, founder of CareStarter, and his team. CareStarter was among 25 companies selected from many more applicants to present to investors and mentors picking the first Health Wildcatters class. I’ve been working with Lamarque off and on for about a year, and although I knew his pitch was solid and well rehearsed, I admit to being nervous as we waited our turn. We’d drawn #22, which put us near the end of a long afternoon of presentations.
Lamarque did a great job. It isn’t easy to give a great pitch in just 3 minutes — and it’s even harder to give a 3-minute pitch that’s memorable and makes you stand out from the crowd when you are near the end of a long line of “competitors” who are also trying to stand out from the crowd.
Here’s what to do if you find yourself in the position of making a case to potential investors in a start-up business. First, don’t panic when someone says, “Sure, fly across the country and make a 3 minute presentation to our group.” Before you decide it’s not possible to tell your story in three minutes, or it’s not worth the investment to participate in a competitive pitch, remember that if you don’t do it someone else will. If you don’t present, you can be sure you won’t get funded.
Focus on Essentials
In a short presentation, there is no time for anything that isn’t absolutely essential. Don’t worry about setting the stage, providing details, or offering proof of your claims — save all of that for the follow-up documents you can offer after the pitch.
Focus on the journalism school rule of including the 5W’s, and then shut up. The 5W’s are:
- Who – Who is the audience for this product? If you tell a potential investor nothing else, tell him who will buy, and how many potential customers there are.
- What – What are you selling? Be specific, and leave the marketing and technical jargon at home. If you have to define your terminology, you risk confusing your audience. Investors don’t need to know how your technology works. At the pitch stage, you are selling the sizzle — not the steak. So keep it simple, with words everyone knows and understands.
- Where – Where are your potential customers spending their dollars now? In other words, who’s the competition? EVERYBODY has competition, because no matter how revolutionary your product is, people are somehow surviving without it. Never, ever fall prey to the temptation to say, “We have no competition.” You will lose all credibility instantly. When Philippe Kahn showcased the first camera phone back in 1998, he didn’t say that there was no competition — he mentioned the fledgling digital camera business, film cameras, and the “public’s lack of demand” for his innovation. He said it would change things — but it would take time to catch on. (I don’t think any of us who worked at Starfish Software back then thought it would transform the world in the way it has, though. I, for one, never could have predicted the selfie craze!)
- When – When will your product be ready to market? In other words, what have you accomplished? If you’re just starting development, don’t be afraid to say so. If you need three years of R&D, saying you can be ready in a year is dangerous to your financial future.
- Why – Why is your product different? Why does the market need it? Why should someone invest? This is the critical part. If you can’t explain why someone should invest with you, chances are they won’t.
It’s possible to cover the 5W’s in 90 seconds, leaving you half of the presentation for other information and details. If you cover these five essentials, you have a good chance of being remembered.
Pictures Persuade People
A good graphic, or a great photograph, will do more to persuade a potential investor than stacks of paper or thousands of words. One of the things that Lamarque Polvado did very well when explaining CareStarter to the crowd at Health Wildcatters was to tell the story from a viewpoint nearly everyone in the room could understand.
Lamarque used photos of a lovely little girl with autism, and showed how her need for therapy, education, and medical services changed as she grew, and how the virtual social worker application that CareStarter has been testing can help her family find resources so they can make their own choices about her care instead of relying on a single referral. The child was his own daughter Ashlyn, and in telling her story (and his own) he instantly touched the heart of every parent in the room.
If he’d had more time, he could have shown the same cycle of care for a working adult diagnosed with cancer, or a senior citizen diagnosed with Alzheimer’s. He had those examples ready — and probably sent them to anyone who asked after the presentation. But in his 3-minute pitch, he said only, “It’s a similar model for Alzheimer’s, heart disease, cancer, and any other chronic disease diagnosis.” Then he moved on.
Don’t underestimate the power of images to make a memorable impression on your audience. If you have just 3 minutes to make the case for funding your company, do it with pictures.
Rehearse, Practice, Revise
One of the benefits of being part of a top business accelerator like Tech Wildcatters or Health Wildcatters is that you can’t complete the intensive program without making repeated presentations about your business. Weekly pitch practices give you the chance to get critiques, ideas, suggestions, and experience.
It pays off. Last week, it was easy to spot the people who’d practiced ahead of time. While some people were nervously pacing and repeating their pitch as they struggled to memorize their lines, and one team was actually writing their pitch on the fly about 30 minutes before they presented, Lamarque was relaxed and eager. He’d mastered his presentation long before, and that quiet confidence showed backstage before the event.
I can’t stress this enough. If you want me to invest in your company, you’d better be prepared for your presentation. Set your iPad up to record, practice in front of your friends, your former co-workers, anyone who will be honest and critique your presentation.
Set a timer, and don’t make excuses for going over. Most angel groups and investor pitch organizers are ruthless about turning off your mike and your power if you go over your allotted time. Scrambling to get it all in makes you look unprepared — because you are.
One of the questions I heard one of the entrepreneurs asking people “backstage” last week was “How many slides do you have?” That’s a bit of a trick questions, because at least four of the slides in a good pitch deck will be on-screen for only a few seconds. They include:
- The title slide. It’s a placeholder while you walk up on stage and wait for your time to start.
- The team bios slide. Yes, you need photos of your smiling team with a couple of sentences that say how wonderful they are. But don’t even think about reading it or naming names during a 3 minute presentation. (Exception: If one of your co-founders really is famous, mention them quickly. But only if the person actually does have a name that everyone in the audience will recognize. If he’s the leading researcher on some obscure branch of science but has a Nobel prize, say only, “Our chief scientist is a Nobel laureate.”)
- The “ask” slide. Most accelerators, Angel groups, and VC’s require you to include a slide that tells the audience how much money you want to raise, and how you plan to spend it. So put it in, but don’t spend more than a few seconds on it. You’ll want to discuss this one-on-one when an investor is truly interested, and so will they.
- The contact slide. The last slide of nearly every deck is the “Thanks for listening, call/email me with questions” slide. You don’t need to say anything — it’s right there, and people will be getting a copy of your deck at the end anyway. Just say “Thank you very much” as you reach the end of your time.
It takes less than 20 seconds for those four slides to flash by. So how many slides will take up the remaining 2:40 seconds of your presentation? That depends on how complex your product is, but if you have more than a dozen slides for a 3 minute presentation, I doubt that you’ll finish on time.
Follow Up Promptly
No matter how good your team is, don’t make the mistake of having too many people on stage. One person is more than enough for a 3 minute presentation.
But bring the maximum number of team members that you’re allowed. (That’s usually three or four.) Why bring people who won’t be presenting? In case the unthinkable happens and your main presenter loses her voice just before the pitch, you need a well-rehearsed back-up presenter who can step up on short notice.
More importantly, the more people you bring, the more people you’ll meet and talk to at the event. Before, during, and after your on-stage presentation there are people to meet and get to know. Some of them might look like competitors — some are potential partners. Some are potential investors or customers. Some may be “low-level” staffers, interns, spouses or even volunteers for the event. Treat everyone with respect and courtesy. You’d be surprised how persuasive a negative comment from one of these “unimportant” people can be. There are no unimportant people — there are just people with unimpressive titles. That’s a lesson your mother probably tried to teach you long ago. But if you didn’t learn it then, learn it now.
Typically, there’s a social event after the pitches. Come prepared with multiple team members who can work the room, and have your hand-outs and materials ready to hand out or send immediately to anyone who is interested.
USB drives are cheap; order some with your logo on them, and pre-load your presentation, background material, and all the detailed information that wouldn’t fit into your pitch onto them, so you can hand them out on the spot if the opportunity arises. Add a small sticker to the back of your business card that says, “Download my pitch from (event name) at <link>”. The goal is to make it easy for them to find your information, after all. It’s ok to make people register to download a watermarked, numbered copy of your pitch — but it’s not ok to make it hard for them to get information in the name of “protecting intellectual property”.
Even if there’s no formal time for Q&A or socializing after the pitch, don’t forget a thank-you note to the people who invited you to present. And, of course, don’t forget to say thank you to the team that helped you practice, rehearse, and get ready for your pitch, either. Once upon a time, I worked with a tech conference called Demo, and got assigned to help a couple of wet-behind-the-ears college students practice for their first public demo. To be honest, they were eager, but not all that good, and we had several practice sessions before their big day.
Trust me when I say that I am glad I got the chance to meet Larry Page and Sergey Brin, and watch that first demonstration of their product — a little thing called Google. They sent hand-written thank-you notes and flowers afterwards. It’s good business to do the same for anyone who volunteers to help you with your first pitch, too — or at least drop them a text or email that says thanks.