Investor Presentation
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Yohan Albo - CEO DataToCapital Consulting LTD.

By Yohan Albo

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In this article DataToCapital will provide tips and advice to startup founders as to how they should present their projects to investors…Welcome to our investor presentation 101 !

 

In order to maximise your chances of receiving an investment for you startup, It is highly recommended, if not required, that presentations be done with slides and not merely by reading off cue cards.

 

Business

Firstly, although not essential, a useful rule of thumb is to apply the 10/20/30 rule to your investor presentation. That is, have 10 slides, present for no longer than 20 minutes, and have a 30-point font. Why ?

Ten Slides.

The average person is not able to properly digest more than ten concepts in a meeting. Generally speaking, startup investors are pretty normal (they just have the money). If you need more than ten slides in your investor presentation to convey your business, then you probably do not understand it properly yourself.

Twenty Minutes.

2 minutes per slide. Indeed these sorts of investor presentation meetings are scheduled for an hour. However, don’t use that time on presenting slides. Think of yourself as if you are the third and final speaker on a debating team. You need as much time as possible to rebut any concerns that your potential investors have with your startup. Give yourself the requisite time to properly answer all the concerns of those present at the presentation.

Thirty-point font.

All too often startup presenters try to cram as much text on a slide as possible, using ten-point font and in the end reading his presentation straight from the slides. The slides are meant to highlight key concepts and provide guidance to you and your audience. If they were to read from, then you may as well just let the audience read them without your voice disrupting them. Rather, use dot points, a large font size and plenty of infographics to appropriately and succinctly convey your message.

What content should a startup founder actually include in each presentation slide?

Slide 1 – Team Bio

Before getting into what your startup actually does, it is important to provide investors with a brief of your team’s background and experience. Investors want to know who they’re talking to. They will be a lot more interested in investing in your technology if you’re an 8200-alumni Technion graduate software engineer with 5 years experience at Google with 2 exits under your belt than if you are a young dreamer with no degree nor track records, who has taken an online startup 101 course on Coursera. And even if you are the latter, no need to appologize, knowing something about you at the beginning of your investor presentation, is better than knowing nothing.

Slide 2 – 30,000 foot view of your startup

This should be the favorite part of your investor presentation where you provide the dream vision of your startup. Demonstrate passionately to your audience why your startup is the next big. This is the sort of stuff you have been dreaming about it. How this is going to make you the next Elon Musk and your startup a potential unicorn. How you’re going to change the world.  You get the point.

Slide 3 – Problem Definition

Define the problem your startup is attempting to solve. This is not self-evident. If it were, then your startup would be redundant and the problem would’ve been solved by now. The whole point of a startup is that it seeks to meet a marketplace need that has not been adequately addressed. If you cannot clearly formulate the problem, then there is something fundamentally flawed with your startup.

Slide 4 – How do you solve the problem?

Once you have clearly defined the problem, your audience wants to know how and what you’re going to do to solve it. Make sure that you (not the slide) explain in detail, but simply, the way in which your startup is going to solve the problem. Be methodical, succinct and concise. Make sure by the end of the two minutes you have spent on this slide, your audience has a good understanding as to how you plan on tackling the problem.

Slide 5 – Market Sizing

To begin with, you need to consider your Total Addressable Market (TAM). Define which industry you’re in. And no, high tech is not a valid answer – you must be more specific. Provide a dollar value as to the market size of the industry that you are targeting and be sure to source your claims with a footnote at the bottom of the slide (or offer a pointer to your source as part of the investor presentation appendix).

Slide 6 – Competition

State your competition. Be honest about your competitors but be sure to demonstrate to your audience what makes your startup unique and different. The best way to promote your startup is not by putting your competitors down but rather by talking up your own startup. In fact if you start bad-mouthing your competitors, potential investors might be turned off by the industry you seek to penetrate all-together.

Slide 7 – Traction

Not only do you need to illustrate to your audience that you have an unbelievable idea, but also that it’s gaining traction. Now, what does that exactly mean? There’s no exact definition but that’s your idea is gaining popularity or progress in some sort of way (some key KPIs need to be defined based on the nature of your solution). Whether that could be through revenue but it could also be through gaining likes on your Facebook page or even a breakthrough in the performance of the technology you are developing.

Slide 8 – Financial Projections

Business Financial Projection

At the end of the day, the primary reason VCs, Angel investors and Family Offices will invest in your startup is because they think they’ll end up making money, a lot of money. If your startup is not profitable enough, then these investors are not going to invest a dime in your vision.

 

You might view your startup through the lens of technology and innovation but investors speak the language of finance. No matter how sophisticated your technology may be, if it cannot be monetized and generate revenue, investors will not be interested.  Therefore, you must provide financial projections. If you could perhaps get away with overselling the technology and/or the product you are developing, it is highly unlikely you’ll be able to do so with your financial projections. Be honest and at the end of the slide, give a rough current and exit valuation of your startup.

Slide 9 – Next Steps

Demonstrate that you have a gameplan. Provide step-by-step solutions going forward. Some questions potential investors want you to answer during your presentation:

How much money do you want? What do you want it for?  What’s your exit strategy? What stage of R&D are you in? When do plan on starting to monetise your product/service (if you haven’t already started)? What is your Go-To- Market? Who will be your key hires? A list of the main technological and commercial challenges?

 

It is an absolute must to have cogent answers to these questions. Prepare appropriately, show your audience you know what you’re talking about and most importantly, people can trust you with their money.

Slide 10 – Appendix (Backup slides)

It may be that you find it hard to express yourself in the presentation and need to rely upon more content on your slides to pitch your idea. If that is the case, it is a good idea to have backup slides that can more easily relay your content without you having to memorise exactly what you wanted to say. Be sure however that this is a fallback strategy and ideally you won’t need to use these slides.

Additionally, you could also have backup slides to preempt potential questions your audience may ask you. Unless you’re on a show like Shark Tank, most investors won’t be seeking to ask you ‘gotchya’ questions. All they want to know is that they can trust you with their money and that you provide them with an opportunity to earn a healthy return on their investment based on the assessed risk level.

 

Having already helped numerous startups gain significant investments to fuel their dreams, DataToCapital can assist you in presenting your pitch to our vast network of investors. Get in touch with us and we’ll help you every step of the way.

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To contact DataToCapital

DataToCapital is a boutique management consulting firm that supports global tier-1 firms and start-up companies operating in Israel in their route to excellence and market dominance. Our core services, designed for CEOs, Executives (VP-level and above) and Entrepreneurs, can be divided into three areas: Market Intelligence, Corporate and Product Strategy, and Execution Support on top-down strategic initiatives.

The quality of the work we deliver in the three areas mentioned above is equivalent to what your company may already get from the top-3 consulting firms that operate in the Israeli market, BUT here’s the twist and why our tier-1 clients think we are superior.

We don’t only provide smart recommendations, we work closely with the management team and can also support driving the execution of their strategic initiatives behind the scenes or as a proxy.

We are at the strategic intersection of Business and Technology. Thanks to our rich background, we know how to connect the dots between the two worlds, and how to be very creative when it comes to disrupting business models or addressing sub-optimized processes with the help of advanced technological solutions (Machine Learning, Big Data, Data Visualization, Enterprise Software Solutions, and many other tools present in our toolbox).

This is a built-in feature. No account manager, no complex communication chain, etc... This is why our firm aims to dominate the management consulting market in Israel with no more than eight talents (...on steroids).

Our long-term vision is to become the trusted advisor to the most influential businesses and institutions operating in Israel, and help them become global leaders in their markets.

DataToCapital Consulting Is An Active Member Of The Israel Advanced Technology Industries (IATI) Association And Of The Israel's Directors Union

Sources used:

https://medium.com/@msuster/raising-venture-capital-c0e011c448b9
The Only 10 Slides You Need in Your Pitch
http://planthybusiness.com/2016/04/12/checklist-for-creating-a-killer-startup-pitch-deck/ https://seraf-investor.com/compass/article/scavenger-hunt-what-look-pitch-deck https://www.forbes.com/sites/davidteten/2015/02/11/dont-pitch-a-venture-capitalist-without-this-checklist/#297cb4a25d53 https://piktochart.com/blog/startup-pitch-decks-what-you-can-learn/ http://mashable.com/2011/06/24/startup-pitch-presentation/#csqgLvN_ikqf http://vc-list.com/startup-investment-due-diligence-checklist/
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