There is plenty of guidance on the internet about how to put together a seed round pitch, mostly focusing on the slide titles and broad descriptions of the content. In this blog we try to give a bit more insight into the actual content of the pitch and how you can increase the impact it has on the investor.
The guest author of this post, Ian Robertson, is a qualified chartered accountant with over two decades of experience investing in, advising and analysing technology companies. Having qualified, he worked for a while in corporate finance with one of the Big Four accountancy firms before moving across into investment management and then into investment banking / broking. Upon leaving the City, Ian set up his own start-up software business and now works as a consulting financial advisor / director with early stage technology companies, helping companies with strategy, financial planning, processes and fund raising.
The common guidance is for the presentation to be no longer than 15 slides. Just managing to keep to 15 slides demonstrates to the investor that you know the first rules of the game – make it as easy as possible for the investor, stick to facts/reality, do what they expect, and don’t waste their time.
Font size should not be below 25. This is not just about making it clear, it also serves to limit the amount of information and preventing the text turning into a script. It should go without saying that font colours should be conservative, should not clash and should be visible against whatever background they may be placed against. Finally, never forget the page numbers. Keeping investors under control in a pitch meeting is difficult enough as it is without having a way to direct them back to where they are supposed to be.
The slides and titles set out below are relatively generic and flow in a sensible way, and in a way that investors will expect. Titles and order can, and perhaps should, be changed, but the core subject matter cannot be changed.
Cover slide – this should be customised to make it relevant to the recipient, include any copyright or legal text at the bottom, and if there is a succinct summary of the business in a few words then put it here.
It is common for presentations from enthused early stage companies to start with Missions and visions. Whilst these slides may suggest that you are passionate and driven, they destroy valuable early momentum both when the investor reads the pitch for the first time, and when it is presented.
The problem – one slide, and possibly more if providing a demonstration or a narrative example. But if there is not a grave problem don’t make out that there is.
The solution – one slide and possibly more if providing a demonstration or a narrative example of the product / service use.
Somewhere in the problem and solution you should indicate how the pain translates into the customers’ pounds costs
The technology / clever bit behind the solution – what sets you apart or makes your timing/positioning special – don’t go overboard.
Business model – how pain turns into your pounds revenue.
Team / Management – keep it simple, clear and honest and adjectives must be well considered. Put in photos – to help investors remember who you are and ensure that management team photos are at least consistent in style.
Competition – be honest and realistic and demonstrate/provide an understanding of competitor strategies and direction in your actual presentation.
Route to market – the task of actually getting the product to end users is all too often forgotten in start-ups. It is rarely just a question of social media or hiring crudely incentivised salespeople. It is important that you can talk about a route to market and to discuss what impact that has on the business/financial model and how that route to market may itself change over time.
Financial forecasts – forecasts are only indications. Make sure you can talk about where the numbers come from and avoid spurious precision. The most important thing is to have some basis in fact and to provide the building blocks, e.g. price per unit, capacity, market size, that can be pieced together to reach any headline forecasts that you might present.
Current status, traction, roadmap, funding - Often split over several slides and centred on the roadmap, these slides set out where you have been, where you are now, where you are going, and how much you need to keep going in that direction.
Growing recurring revenues are the best third-party validation of any investment proposition, but anything that suggests traction should be in a start-up initial presentation, provided it is from a credible and unconflicted source. Willing suppliers or curious channel partners do not constitute validation.
Roadmaps and milestones are excellent ways to demonstrate, or create the illusion of, management competence and progress. Furthermore, they are easier to discuss than financial metrics and, as images, linger longer in the mind.
Deal structure – Investors understand that such matters will be unclear at first, but you should indicate how much is required, how it will be applied, how long it will last and what milestones could be reached on the road to the next raise.
Do not tell investors what the business is worth or why they should invest. Talk in broad terms of what you think it might be worth, but never do this in the early stages with any hint of precision or certainty.
Exit strategy – investors need to know they can exit, but they can work that out from your description of the business, the competitors etc, what the likely exit route will be. When the only answer to the potential question is ‘trade sale’ or occasionally ’trade sale or IPO’, there seems little point in putting it in, but many people still do.
Appendices – only to be used for information that the investor is unlikely to know and never more than 3 slides.
Presentations should flow, but when it comes to actually presenting, they should also have a rise and fall. A twenty-five-minute blast of information and enthusiasm is not going to provide the investor with many openings to ask questions. Q&A time can be set aside at the end, but the questions should really be during if there is to be real engagement.
Most of all the presentation should be ‘flick-throughable’ with the key points on each slide, e.g. market size, state of traction or route to market, evident at first glance. If you choose to highlight, underline or embolden text remember the impact it has on the legibility of the rest of the text. Sometimes it is only the text that you have emboldened that is worth retaining.
Investors are naturally curious creatures. One of the best ways to make your presentation memorable is to provide them with new insight into the world around them – although of course this should be inextricably linked to your business and positive.
Do not put in anything that can be easily disagreed with or that makes the reader think too hard. You may continue to ‘turn the slides’ but the investor may well be firmly anchored back on slide 4 mulling over your error or arrogance. The most common causes of such hiatuses are comparisons to tech giants or current industry darlings, the use of ‘disruptive’, ‘paradigm’, and ‘world beating’, and absolutely any superlatives applied to the management team.
People find it easier to remember things told to them as a story than as a series of facts. This is even more effective if you can position the story in a way that allows the pitchee to envision themselves within the narrative, although of course this is not always possible and you shouldn’t challenge the imagination of the investor too much.
Numbers are generally easier to recall than qualitative facts, but don’t overdo it. Pick a handful of key figures at most, preferably big and positive, that you would like investors to take away from the meeting and repeat them across the deck and conversations.
Pictures are worth a thousand words but be careful to ensure that the connection is evident and that you actually talk about the pictures in your pitch. Videos and product demonstrations raise the rewards and the risks further still. If the product can be demonstrated clearly in a few minutes in a way that yields results, then you should always be able to do this when you meet investors. But, that said, sometimes a video demo might be better for your nerves and the success of the pitch.
Presentations should be amended according to their audiences. Even at the seed stage investors can have very different perspectives and motivations. Some Angel investors want to be involved, some to be kept informed and others just to have an investment that will help them avoid taxes over the period. Likewise, not all funds share the same perspective on helping and supporting their investee companies, and some are considerably better placed to help companies at different stages of their life cycle.
There is no reason not to practise your presentation. Record it, get people to sit in as mock investors. This should be done on separate occasions and you should not be learning any kind of script.
The investor meeting is not a time for management discussions except in fairy tale exceptional dragons’ den type circumstances. Know the lines, financial, technical, and personal, where you discuss no further.
If there is more than one person, then more than one person should present. Listening to the same voice for more than ten minutes can be quite challenging. Sharing the task helps avoid this and helps to show that the team is made up of competent and compatible people, and that the enthusiasm of the main presenter is genuinely shared by his or her colleagues.
Thank you - view investors as a resource of experience, advice, connections and not just money. Make it clear that you value their time and insight. Say thank you, follow up with emails and keep them updated.
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