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. In late July, I got to experience it from the side of the eager entrepreneurs waiting downstairs at the Tech Church in Dallas, where the first Quick Pitch day for the brand new start-up accelerator, 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 ad his team as a mentor and investor for about a year. 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.
I am certainly biased, but I thought 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 my advice on what to do if you find yourself in the position of making a case to potential investors in a start-up business. The first bit of advice is 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, Finish, Follow-Up
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, finish on time, and shut up until and unless someone asks a question. 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. In a first pitch, 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. When Philippe Kahn demonstrated the camera phone for the first time, he said his competition was Nikon, Kodak, and inertia. And he was right!)
- 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?
You can cover the 5W’s in 90 seconds, leaving you half of the 3-minutes allowed for your presentation for other information and details. If you cover these five essentials, you have a good chance of being remembered.
Make sure that you have hand-outs (digital) that are immediately available to anyone who asks, and that you understand the group’s rules on following up with those who see your pitch. Don’t wait: the follow-up period starts the instant you finish your pitch. It always surprises me how few of the companies who pitch at events I attend bother following up afterwards, even if I hand them my business card and ask them to follow-up with me. That’s a huge mistake. If someone gives you a business card, you owe them at least an email if not a phone call.
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.
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 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, Revise, Repeat
One of the benefits of being part of a top business accelerator like Tech 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. Backstage, 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 as he chatted with others, and identified several potential strategic partners.
I can’t stress this enough. If you want me to invest in your company, show up 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. I don’t care who from your team presents, so long as they speak clearly and convey the information I need to decide whether to ask for more details.
Don’t assume that the CEO has to be the person pitching if the sales and marketing person is a better speaker, and don’t discount the earnest geek who may not have the most polished appearance but conveys excitement and enthusiasm with every word.
Everytime you practice, practice against the clock. Don’t make excuses for going over — and don’t assume that the host will let you finish your sentence or slide deck if you don’t finish on time. Most angel groups and investor pitches 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 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 even naming names during a 3 minute presentation. (Exception: If one of your co-founders really is world famous, say so, quickly. But unless the person has a Nobel prize, don’t give their name unless it really is going to stand out.)
- 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.
So if it takes less than 20 seconds for those four slides to flash by, how many slides 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.
A 1-minute video is a great alternative to a lot of slides, so don’t overlook that option when you’re planning your pitch.
Divide, Woo, Persuade
No matter how good your team is, don’t put too many people onstage. One person is more than enough for a 3 minute presentation.
Bring the maximum number of team members that you’re allowed. (Usually three or four.) Why bring people who won’t be presenting? First, because the unthinkable can happen. I’ve been at events where a presenter lost her voice just before the pitch, another where the CEO broke his leg while jogging the morning of the pitch, and yet another where a breakfast buffet at the hotel put four entrepreneurs in the hospital with food poisioning. So 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. And some are potential investors or customers.
Woo them all, and persuade them all of the importance of your product. Obviously, you don’t want to waste your time at an event, so some prioritization has to go on. But don’t make the mistake of branding anyone you meet as unimportant.
My friend Janie Morris often works the registration desk at Lone Star Angels events here in North Texas. It’s a truly clueless entrepreneur who dismisses Janie as “just the front desk girl”. She works the registration desk as a volunteer because she enjoys it. She’s unfailingly quiet and friendly to everyone….and her word carries real weight with investors because (a) she’s smart and has been doing this for awhile and (b) people often make the mistake of saying things in front of her, or to her, that reveal a side of themselves they hide from men they assume are more important.
Don’t be that clueless person who assumes that a young, pretty woman isn’t important, an older, quiet man in the corner is somebody’s father, or the pudgy person with the funny accent is less important than someone in flasher, more fashionable clothes.
In the world of angel and venture capital investors, you really can’t judge a person’s ability to invest by their appearance. If someone is at a pitch event, they’re important – or they have the ear of someone who is.
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.
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.