As a member of the local angel group selection committee, I’ve seen a lot of startup presentations to investors, and I’ve never seen one that was too short–maybe short on content, but never short on pages! A perfect round number is ten slides, with the right content that can be covered in ten minutes. Even if you have an hour booked, the advice is the same.
I’ve published these points before, but based on interest, it’s time for an update. Remember the goal is an overview presentation that will pique investor interest enough to ask for the business plan and a follow-up meeting, not closing the deal on the spot. If you can’t get the message across in ten minutes, more time and more charts won’t help.
Every startup needs both a business plan and an investor presentation completed before you formally approach any investors. The approach I recommend is to build the investor presentation first by iterating on the bullets with your team and then fleshing out the points into a full-blown text-based business plan document. Here are the ten slides you need:
- Problem and market need. Give the “elevator pitch” for your startup. Explain in analogies your mother could understand and quantify the cost-of-pain in dollars or time. Fuzzy terms like “not user-oriented” or “too expensive” are not helpful.
- Solution product and[LS1] technology. Here is how and why it works, including a customer-centric quantification of the benefits. Make sure to communicate the relevance of your product/services to market needs. Describe your technology patents and “secret sauce.”
- Opportunity sizing. Define the characteristics of the overall industry, market forces, market dynamics and customer landscape. Investors like $1B markets with double-digit growth rates. You need data from industry experts like Forrester or Gartner for credibility.
- Business model. Explain how you will make money and who pays you (real customer). In this section, you need to be passionate about recurring revenue, profit margin and volume growth. Implicit in this is the go-to-market strategy.
- Competition and sustainable advantage. List and position your competition or alternatives available to the customer. Highlight your sustainable competitive advantages and barriers to entry.
- Marketing, sales, and partners. Describe marketing strategy, sales plan, licensing and partnership plans. Here is also a good place for a rollout timeline with key milestones. Make sure your marketing budget matches the scope of your plan.
- Executive team. List the qualifications and roles of the top three executives and the top three on your Board of Advisors. They need domain knowledge and startup experience. Highlight their level of involvement and quantify their skin in the game.
- Financial projections. Project both revenues and expense totals for next five years and past three years. What is the current valuation of the company? Show breakeven point, burn rate and growth assumptions.
- Funding requirements and use of funds. What is the level of capital funding sought during this stage? What equity is the company willing to give in return for the investment? Show a breakdown of the intended uses of these funds.
- Exit strategy. What is the timeframe of return on investment? What is the planned exit strategy (IPO, merger, sale, including likely candidates)? What is the timeframe for the exit? What is the rate of return expected for the investor?
Hand out copies of the slides before the presentation for note taking with proper cover sheet, brochures, product samples or other marketing materials you may have. Offer to do a demo later, but don’t try to squeeze it in the presentation.
My last recommendation is practice, practice, practice. The CEO should give the pitch and prepare by playing “presidential debates”–ask your team to be the opponents and check you on timing. Investors hate long rambling presentations. Show some energy and enthusiasm and remember, if you lose their attention, you have lost the deal. Have fun!