This is a guest post by Justin Wohlstadter. As a New York-based Venture Capitalist, Justin built the venture arm of Penny Black and launched BOLDstart Ventures, a seed fund focused on investing in New York’s booming tech environment. Justin has led and facilitated over a hundred investments in a wide range of companies including Klout, Hashable, Rapportive and Enterproid. Late last year Justin joined the Enterproid team full-time to help run product, though he still stays active in the venture world. You can read more of Justin’s writing on his personal blog.
Venture capitalists are not rational: you have to be at least partly insane to believe you can pick the next Google, Fedex, Netflix etc. There are a lot of great resources out there to help startups create pitch decks for investors, but almost all miss the bigger picture: you have to emotionally connect with investors and appeal to that irrational part of their brain, while at the same time appeasing their rational fear.
Three key principles for your pitch deck:
Tell a visual story. Human beings are visual creatures that like patterns and structure. A graph/picture will always tell a story much more effectively than a page full of text. Try not to put more than a line of text on most slides, team page aside. You also need to hold your investor’s hand through a continuous narrative that is clear and backed up by data. Your basic story should look something like this:
- Intro (one line/graphic on what your startup is and nothing else)
- This is who we are (with enough info on each of the core team members such that I sit up in my chair and understand why I should pay attention)
- This is what we’ve accomplished so far (# users/growth rates/engagement metrics)
- This is the problem we see (in a bit more detail, maybe even an example)
- This is our solution (preferably with a screenshot/demo of the actual product)
- This is how serious/big/immediate the problem is (market-size)
- This is how we’re going to solve it (go-to-market strategy)
- This is who else is doing it (competitive landscape), and why we have an ‘unfair advantage’ over everyone else
- This is how we plan to make this a real, big business (monetization plan)
- This is what we want from you and what we plan to do with it.
Keep it short. We have short attention spans. If it’s longer than 10 slides, it’s probably too long. The more slides you have, the longer it takes to get through it and into the conversation with your investor (we like to hear ourselves speak). If you want to include more information, no problem: create an appendix and send it as a separate PDF along with the deck (or better yet, after sending the deck as a follow up).
Pull at their heartstrings. A few key thoughts around team, product and market: First, we’re investing in YOU above all else. Show us why you’re the one who can tackle this problem, and, equally important, that you would be a fun person to work with for the next few years. Be passionate, and let your hunger and enthusiasm show. Second, show us why the pain point that your product/service addresses is so painful – and immediately in need of resolving – that people won’t understand how they lived without your solution. Third, engage our imaginations, and show us a big vision while at the same time being realistic as to how you plan to get there. Finally, be sure to show us the product! We want to see it, touch it, play with it, and understand it. Eventually you’re going to have to get someone to use this product/service – show us why they’re going to love it.
The ideal pitch:
The ideal pitch is comprised of just three items:
- One sentence describing what your business does in simple language. The less adjectives you have in there, the better.
- One sentence giving a (real world) example of the pain point you’re solving (why the status quo really, really sucks). People should have an ‘ah-hah’ moment once you say it.
It should be so quick, simple, and easy to understand that you can tell everyone: your local barista, the cleaning lady, and that hot girl/guy you want to pickup at a bar. (Really, you should always be pitching). The beauty of 2 sentences is that you can then pause and let people ask you about it, both (a) quickly revealing what’s unclear about your value proposition, and (b) turning it into a conversation rather than a one-sided attack.