Authors: Matthew Wahlrab and Craig Rochester
Let’s face it, for a start-up the VC pitch is both an art and a science. It can also be critical in determining whether you can continue to operate as a start-up business. The content you need to provide is well known. But what does it take to really stand out and convincingly persuade an angel or VC to invest? Here are our top 5 tips to juice your pitch:
1. Keep it short but meaningful
Don’t make a pitch deck more than 15-20 slides long and ensure you do not make your slides too wordy. Use appendixes to be ready to give lengthy, detailed information upon request. In-depth financials and granular statistics can be provided upon request, or in a follow up presentation that is tailored to a specific topic.
Whilst you should keep it short, you do want to give meaningful information. Think about what is relevant from the investor’s point of view. Ask yourself what information empowers them to make an investment decision in your favor. This may well be that you can develop your unique idea, that you can recruit the talent needed to build a marketable product or service, and that you can win over partners and customers in a substantial market.
Meaning can also be conveyed through design, look, and feel. Invest time into making the deck look professional, and into conveying your business value through visual brand touch-points.
2. Tell a compelling, memorable story
People generally don’t remember stats and pie charts. What they do remember is how you made them feel whilst you were presenting. People remember emotive content. Emotion is evoked best through storytelling – the how, the why, the personal motivations, the struggles and aspirations.
“The best decks provide a narrative,” says Karin Klein, a founding partner at Bloomberg Beta, Bloomberg LP’s venture arm. Every startup has a product, and a business and financial plan, but what makes a start-up stand out is a compelling reason for being. In other words, your presentation needs to use the power of storytelling to spell out the pain point and problem your business is aiming to solve. This story is going to demonstrate for the investor the benefit your product/service offers to customers with a need. Storytelling makes the value of your product or service easy to comprehend.
Furthermore, to make the presentation memorable, it can be a good idea to conclude the presentation with a ‘take-home’ phrase or one-liner that succinctly conveys the benefits and impact of your product/service.
3. The power of a live demo
A live demonstration is the scariest thing you can do in a pitch, and of course, there is always a chance something goes wrong. Nevertheless, this is a high risk/high reward addition to any successful pitch.
Remember, your potential investor probably sees tens or even hundreds of pitches every month. It is likely that they all include high-level and technical descriptions of a product, but how many are able to actually demonstrate it? A demo is a powerful way to convey details about your product/service, and it is a time-saver because it often takes longer to describe something than it does to actually show it.
A demo is also a hugely impressive confidence-booster. Your potential investor is going to recognize the guts it takes to do a live demo, and they are going to recognize that the demo is tangible evidence that you can ‘walk the talk.’ It grounds your pitch in reality. A live demo conveys the point that you have robust technical capability, without having to say this.
4. Highlight your IP - demonstrate your worth
Your IP is your underlying magic, or ‘secret sauce,’ behind your product/service and business operations. Investors are going to ask about your IP because they know that IP is the single most important factor in maintaining a competitive advantage and mitigating risk in a growing business. A National Bureau of Economic Research paper found that a large cross-section of companies are more likely to go on to raise VC funding in the three years following a patent decision (7.0% vs. 1.8%; p<0.001) and to eventually go public (0.9% vs. 0.3%; p<0.001).
It is likely that an investor will also know that startups that file for patents are 35 times more likely to be successful than those which don’t. Moreover, a VC is going to be aware that a patent has 51% percentage-point increase effect on sales growth for start-ups, so including an overview of your patents in your pitch deck is a very effective and persuasive way to show that your business is currently valuable and that it will likely become more valuable over time.
5. Link your IP plan to investment
An IP plan is a tool that brings together all the evolving know-how, skills, and decisions that make up your innovative potential. Investors need to know where your invention fits into the market relative to your competitors, and how you will prevent being copied. A strong IP portfolio with a plan for how you will grow and develop your IP over time provides an investor with peace of mind and confidence that your business will succeed, and thus bring returns on their investment.
