This is the last part in the series on creating a new technology.Part one answered the question: What are the critical steps needed to create a new technology. Part two was focused on how to approach investors. This last part helps you put together your financial pitch.
Presentations are an important part of many Ventures competition for good reason. Corporate presentation are extremely important if one wants to gain the interest of an Investor or potential partner. The art of presenting with the intent to raise capital is a crucial skill for entrepreneurs to master and will become a regular activity of any CEO in a Startup.
The following is a list of tips to consider when constructing a financial pitch.
Watch the time and be courteous: Rule number 1! The listeners have a schedule just as you do. Ask at the start what time is available and plan to stay within the time limits. Try to cover the company in about 20-30 slides leaving time for questions. Do not waste time or keep the listener there with added slides, UNLESS, the investor drives the discussion to learn more. Also, you may get tough questions. Maintain a business demeanor in all of your answers. More than one investor has been known to comment on a presenter’s behavior being discourteous or wasteful.
Product: Define your product clearly. Listeners are often willing to be helpful, but they do not like having to ask you to define your products or services in mid-presentation. Some listeners tune-out if they do not understand what you are doing. Address products or services of the business up front in order to set the framework for the listener to follow you better.
What is your market and HOW DO YOU KNOW THEY WILL BUY : It is never a good idea for a startup to engage in making a product with the philosophy of “build it and they will come.” Most savvy investors have figured out that this is a bad strategy. Some may have been burned by prior investments. Failure to address market and market interests will hurt your presentation. It shows that you have not done your homework to investigate the landscape and identify your market or how you will sell product in that market. It makes a huge difference to know you are selling to a group of 100 buyers or that a mass market direct to consumer selling campaign is needed. Address your market, potential sales, and any information you can obtain that helps the investor see your plans to sell product. It is also a good idea to show how the product addresses a critical need in the market, if one really exists.
Intellectual Property: How to you intend to develop a moat around your business? Protecting the company from competition is an important consideration. When asked about Intellectual Property, please know what you have as protection. Repeating that you have a patent and not understanding what that means is not really helpful! You may not need or have patents so describe your corporate Know-How or Trade Secrets and how they may protect the company. In essence, what protections does the company have that will make it difficult for another company to compete?
Development Plan, Milestones, Timeline: Investors can only guess your development plans, schedule, and timeline if you do not tell them. Timings, milestones, and highlighting company valuation inflection points are worth a few minutes. Especially, show the time frame that you plan to launch a product and the funds required get there. Proper presentation of these points show you are Results Oriented which helps build confidence that the team will stay focused on a product launch and value accretion.
Management Team: One of the surest ways to make some investors believe you do not have valuable technology or products, is to spend most of the allotted time talking about how great the team is. Devote the bulk of presentation time to the key business points. Have a highlight slide to cover the team toward the end. The listeners can ask questions if they want, but it is not necessary to spend more than a minute or two on the slide.
Know your business: Some entrepreneurs fail to take the time to learn about the business sector they plan to launch into. They show no evidence of understanding the development path, how to manage a business, or lead a team! If the company is worth investing in, failure to demonstrate leadership and knowledge will likely lead to an interested investor to require a new CEO is hired before an investment is made. Show you are a good leader by learning all you can about the business sector and retaining advisors to cover deficiencies.
You can follow Taffy Williams on Twitter by @twilli2861 and you can email him with questions at firstname.lastname@example.org or contact him via company contact info in the website. More Startup information is contained in his personal blog. His photography is also available on line.