I’m an Investor, Now Talk to Me (part 1) by Bob Rosenberg

A View from the Fridge

I’m an Investor, Now Talk to Me (post 1 of 2)

Just back from (an online) demo day, where I was a judge.  The usual mixture of promising and ‘I wish it was better’.  Presenting isa now a rite, with its own formula and strick rules.  And, as I’ve noted before, it feels evermore creaky and artificial.  Especially on a Zoom.

Here’s your typical deck:

  1. Title slide
  2. Here’s the product (instead of the business)
  3. Here’s who benefits (not always the customer)
  4. Here’s the TAM/SAM/SOM
  5. Here’s a 4×4 showing us in the upper right corner
  6. Here’s our fantastic team (photos, logos)
  7. Here’s our CAC/LTV (as if an early stage company had any concept of either)
  8. Here’s our financials (promised profit in 2-3 years)
  9. Here’s a summary slide 
  10. Here’s a thank you and link to web

When I put on my investment hat, very little of this is useful or compelling.  You’ve lost me at the jump. And because the presentations are so ritualized, the companies all begin to look like green apples in a bag when, what I really want, is a juicy red one.

What follows are some suggestions that I hope will be helpful as you assemble your next deck.

This post will focus on the details, the post to follow will deal with the ‘game’ of presentation.

As an investor, this is what I want to hear, so it’s an idiosyncratic list.  I’m not here to repeat what you can read a thousand places on social media, I’m here to promote more red apples.

 

  1. Red apples are must-have products and services.  Nice to have products and services are, well, nice.  But usually a pass from investors.
  2.  Tell me your elevator pitch over the first slide.  Two, at most three sentences – why you are a must-have product or service.  Tell me about the pain it addresses.  Tell me where you’re at, what you’re raising, and how far the money will get you.  Note:  If the founder can’t communicate the essence of the business in a couple of sentences, she’s not ready for funding.  If the elevator pitch is compelling, I want to listen more closely, which is what you want in the end.  The rest of the deck becomes an amplification of the elevator pitch, which becomes your chorus, your ear worm, your best foot forward.
  3. Show the passion, as well as the humanity that you’ve invested in the business.  Why are you doing this, how will it matter to you/your family/your community/the target audience/the world?  That’s the passion that investors know is essential to get you and the team through the challenges ahead.  In addition, I’d like to see the humanity that makes you an outstanding employer, leader, partner, salesperson.  And humanity means maturity, especially when it comes to decision-making.
  4. Establish the apple’s provenance.  Why does this business win in the marketplace – and why does it have lasting value???  Provenance comes in many flavors – special access to expertise, materials, customers; patents; trade secrets; influencers and thought leaders; partnerships; even novel web addresses or special stickiness.  Once I was on the fence about a business, then found out that the president of the medical association dedicated to the disease in question was on the board.  Now that’s provenance!!!! (it didn’t go well; the secret sauce died a few months after the initial investment.)
  5. Remember, it’s a business.  Most seed-round (and many A-round) decks focus on product, not on getting the product sold.  Tell me how you get to market, how you sell, how you scale.  And what’s your relationship with customers (high customer service, high touch, annual contracts, website, phone/message access), including why they’ll stay loyal.
  6. And tell me about your competition – and substitutes.  Give me a slide that characterizes the market today (including other businesses with product in development).  Because I want to see that you understand the waters in which you want to swim.
  7. The big finish Show me 100-digit financials and ask for the money.  Again, I want to see you understand the finances of the business you are proposing.  But I also want to see that you know that numbers, at this stage of development, are soft at best, so keep it simple.  A professor friend suggests that the slide show three years and contain no more than 100 digits (for example, the number 1,000 is four digits).  So if sales are projected to be €10 million, have the chart in 000’s, which means that €10 million is €10,000.  Then ask for the money and tell me what you’ll spend it on and where you’ll be when next you seek funding.

The ideal presentation takes 5 minutes, contains 8-10 slides (with a minimum of writing on them).  I want to focus on your spoken words, on you as a salesperson (and a person), not on the deck.  If you can swing it, ask the organizers if you can have the additional time (most demo day pitches are ca. 10-12 minutes) for Q&A.  Smart investors suss out much more information from Q&A than from presentations.  It’s where investors suss out the red apples.  Your audience will tell you what you’ve left out, or things they fail to understand.

 

Okay?  Okay!!!!

As always, let me know what you think!!!

 


Bob Rosenberg
Educator (Associate Professor) / Entrepreneur / Leader of angel
communities /Entrepreneur in residence at PorterShed
and BioExcel / Rarosenberg@gmail.com

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