(Free E-book) How should your startup pitch to investors?

I have written a 100-page e-book on how an early stage startup should go about preparing a compelling investor pitch. This e-book will answer questions like:

• What are the hurdles in your way of securing funding?
• How do investors evaluate your pitch?
• How to create content for your pitch?
• How to design professional slides?
• How to deliver your pitch with confidence?

This e-book is a step by step guide to create, design and deliver a compelling investor pitch. It is the outcome of my 2 years of working with numerous startups, mentoring them, evaluating and fine tuning their pitches, attending demo days and interviewing investors. This e-book is also based on what I have learnt from awesome articles by other startup mentors, entrepreneurs and investors.

To receive your free copy, send me an email: vivek @ jazz factory dot in or leave your email ID in the comment below. I will email the e-book to you. If you know a friend who is running a startup, share this post with them too.

3 Questions to Ask before you Present on Demo Day?

In October, 8 agri-business startups had their Demo Day in Mumbai. I was invited by my alma mater (which had incubated these startups) to help these startups with their pitches. In this post I share what I learned from first, helping these startups and second, by seeing them pitch live on Demo Day.

Before you begin preparing for your demo day, you need to ask the following questions:

1. What are my constraints?
2. What does the investor expect from me?
3. What do I expect from this pitch?

What were the constraints?

Time was the only constraint. Each startup was given only 8 minutes. The organizer stopped the presenter when the time was up. This was followed by a Q&A of 5 minutes in which 4 or 5 investors asked questions.

Actually this was a good constraint to have. The more you speak, the lesser the audience will remember. Even with 8 minutes, the investors had to listen for 64 minutes (8 x 8). That's a lot of new information about 8 new startups. They can hardly be expected to remember much.

How do you stand out here? Share what business you are in with complete clarity. Make sure you say 2 or 3 remarkable things, which make you stand out. If you are lucky the investor will remember atleast one of these and this will be the conversation starter during lunch / dinner.

What did the investor expect from these startups?

Clarity about their business. No investor will decide to invest in a company after listening to an eight minute pitch. The pitch is only to get them excited enough. It is like the movie trailer which shows you glimpses of the story, introduces the characters and makes you wanting for more. It intrigues the audience and draws them in.

The investors wanted to know what business you were in, how large is the market, how are you going to make money, who are the team members and how is your offering different from your competition.

This was evident from the questions the investors asked the startups. Actually I am going to share the investor questions in my next post. The questions asked by investors provides us a window into their minds and how they think.

So as a startup, all you need to do is to explain the basics of your business. Clarity is what you must aim at. You do not want the investor to meet you after the pitch and ask, "What does your company actually do?"

What can you expect from this pitch?

You should aim to pique the interest of as many investors as possible. Typically at the end of all the pitches, the investors and startups mingle over food and drinks. This is where you want most investors to come towards you and ask you relevant questions about your business. All you should want is that they come to you and talk to you

6 Mistakes to Avoid in Your Investor Pitch Presentation

iamwire is a very popular website which writes about Indian startups. Today they have published my article about startup business plan presentation. You must check it out, if you too are looking to get your startup funded. In this post I talk about the following 6 mistakes:

1. Team slide is just a bio
2. Failing to understand why you are making the pitch
3. Not preparing for the tough questions
4. Top down approach to market sizing
5. Undermining competition
6. Not telling a story, not appealing to emotions

Click here to read the article. If you have any question, leave a comment below.

How to pitch to investors? Pitch the way Venture Capitalists think

Vinod Khosla, the founder of Khosla Ventures is a seasoned investor and entrepreneur. He has seen hundreds of startup pitches and in this 25 minute video he has shared his wisdom. What mistakes startups make while pitching for seed funding (or early stage funding) and what is the best way to present to investors. I have put together some key takeaways from his valuable talk.

Pitch the way Venture Capitalists think

What is your goal?

The most important goal of your presentation is to engineer an email. Let me explain. Once the presentation is over, the investor will shoot across an email to his partners. The investor (your audience) will write a few sentences to his peers (colleagues at the investment firm). What will the investor write? Your aim is to write the email for him. Plant some key messages during your presentation. What is the company about? Why it is an exciting business? The words and tone of his email determine your fate.

Less is more

The investor presentation is not a place to share everything. You do not need to share 10 reasons why they should invest in you. You do not need to take them through everything. Choose overview over details. If they need details, they will ask and then you can share the same. Take them through the overall story first. Share the most important story which fascinates the investor. 

Reason to invest and NOT invest

There are two major emotions at play in the minds of the investor; fear and greed. Fear that this might be a risky investment and greed that it could be a jackpot for the investor. Address both of them. Give 3-5 reasons to invest and also share the risks facing the business. Then address these risks. Show that you have thought through and know how to minimize the risks of running this business.

Tell me a story

Investor presentation cannot be a boring experience. You have to take care of the emotions of the investor. You have to tell a story with words, pictures and numbers. Do not bore them. They too are human.

How to develop your story? What will you talk about?

Step - 1 Write down all the reasons why the investor should invest in you. Make a really long list. Then choose 3 to 5 key ones. That's it. The investor cannot remember more than 3-5 reasons.

Step - 2 Write down all the reasons why the investor should not invest in you. This is what is going on in his mind at the time of your presentation. Now pick up the top 3 reasons and address them in your presentation. This will show that you have thought through and you have a strategy to minimize the risk facing your business.

Step - 3 Talk about the team, financials (revenue, cash flow, capex, etc.) Do not go beyond 25 slides.

Step - 4 Write down all the questions you think will arise during your presentation. Prepare an answer for each of these and keep them as your backup slides. Show it to them when they ask the question. This will again prove you are a person who is prepared and well organized.

State the problem clearly

Khosla says 80% of the presentations do not make the problem clear till they are about 15 minutes into the presentation. Say this right at the start. Do not make a statement. Tell me the problem you are really solving.

How does a VC decide?

Do you solve a real problem?

What are the reasons to invest?

What are the risks and how will they mitigate the risk?

How good is the team?

How dangerous are the cash flows?

Other tips

• Credibility is important. After the presentation, the investor and his team will discuss "whether they can trust you?". Ensure you do not hide anything from them.
• Use a bottoms up approach to market sizing. That is more credible. Saying that as per Gartner the XYZ market is $2 billion is not good enough.
• The investor does not care about your names. What matters is what makes this team qualify for this job? How will this team mitigate the risks of business.

Watch his talk by clicking here. Take care  of these points when you prepare your pitch presentation. In my next post, I will share the slide design tips which Vinod Khosla has shared in this talk.

9 Presentation Tips for Startups: What investors really want from your presentation?

Recently I interacted with a few investors who work at large venture capital firms in India. I talked to them at length about what they really want in a startup presentation and what is usually missing from most. If you are preparing your funding pitch, here are 9 killer tips for you.

1. Every investor sees many presentations every week. He really has no time to go through every slide properly. You need to get the investor excited about something within the first 5-10 minutes of your presentation. Figure out what is the one thing about your business that will excite the investor. Put it up right at the start.

2. You should have a summary slide at the start. Share basic information like the industry you are in, your uniqueness, traction, funding you need, etc. It helps them put you into a mental box quickly. They want an overall picture before your movie starts.

3. You must show that your key metric will double-triple in a few years. All that the investor needs to see is that his money will grow exponentially. They do not want to invest in companies which will clock 20% growth year on year. Sorry.

4. Team slide is the most crucial. Investors are asking themselves: Will this team deliver? Most presentations have names of the founders, their designation, qualification and work experience. That says nothing about the ability of the team to work together and deliver the numbers you are promising.

5. Never claim your startup does not have competition. Show them who is your competition at a macro level and a micro level. At the micro level you might be alone but never at the macro level. "If a company has no competition, I would rather not invest in it" said one investor.

6. Highlight the real difference (USP) between you and your competition. Spend time here and crack this part. Do not write the obvious differences, instead focus on the real and significant difference.

7. Give utilization of funds. Interestingly all presentations ask for funds but many of them do not show the utilization of the same. Your business plan does assume you will get the funding. So you already have this information. All you need to do is to present it properly.

8. All investors want to looking at a huge market opportunity. Show them the market opportunity and follow a bottom up approach to arrive at your billion dollar figure. Your market opportunity is $1 billion as per Gartner. Well this number makes less sense for an investor. How about doing it the hard way and with a bit more detailing? Makes it more credible.

9. What if competition copies your USP (unique selling proposition)? Show them that you have thought about it and how do you plan to stay ahead of the competition.