According to Frank Erschen, angel investor, pitch coach and director of the Network of Angel Organizations, pitching to investors is an artful science. At last week’s Entrepreneurship 101 lecture, he and his frequent collaborator Melissa Durrell, president of Durrell Communications, gave a very detailed talk breaking down what a perfect pitch looks like.
Two of their over-arching themes were storytelling and timing. You want to be able to hook your audience from the beginning and you also want to be able to shorten or lengthen your presentation in case your time allotment changes. The “art” of pitching is being able to successfully tell your story to investors when you don’t actually know all of the details of the story yourself. This complements the objective of a pitch, which is to arrange follow-up meetings with potential investors, not to gain investments on the spot.
For the perfect pitch, Frank recommends creating a pitch deck with 13 slides. The components of the pitch deck should be as follows.
- Slide 1 – Introduction: First impressions are important. If your company has a complex name, be sure to explain how it is pronounced. Also be sure to include contact information for you and your team members.
- Slide 2 –The elevator pitch: An elevator pitch should be no more than 15 seconds long and should roughly describe the space your company or product is in.
- Slide 3 – The problem: Outline what problem(s) your business is solving and where you hope to scale.
- Slide 4 – Total addressable market: Discuss how much money people are spending to fix the problem(s) you just discussed. Combine secondary source data, such as details from the national census, with primary customer research.
- Slide 5 – Your solution: Describe your product and how it solves the problem in question. This is a good opportunity to bring up intellectual property. Your product is a feature of your company, which is what you’re actually selling.
- Slide 6 – Why now? This slide is an opportunity to combine primary and secondary source research to describe why now is the right time for your product to succeed. Slides 1 to 6 consist of background information. They set the context for the “selling” portion of the presentation, which begins with Slide 7. Slides 8 to 13 deal with closing the pitch and making the ask.
- Slide 7 – Go to market: Frank urges pitchers to follow the VEGaS model.
- V: How you validated your product (where, who and when)
- E: Where, when and how you plan to enter the market
- G: Where, when and how you plan to grow; and
- S: The conditions under which you’ll be able to scale the venture.
- Slide 8 – Competition: Give an honest assessment of the competitive landscape around you. Declaring that you have no competition will only lead to a loss of credibility.
- Slide 9 – Revenue model: Explain how your business will make money.
- Slide 10 – Projections: Your projections must make sense. Be prepared for a potential investor to pick two data points on your revenue curve and ask how you plan to get from Point A to Point B. Exaggerating these numbers will only lead to a loss of reputation during the due diligence follow-up meeting.
- Slide 11 – Your team: Provide bios of your team members, and also outline who you still need to hire.
- Slide 12 – Financing to date/your ask/use of proceeds: Explain how your business has survived to date. Outline how much financing you’re looking for and how you will use your proceeds. Most of this content should be obvious to investors based on your go-to-market plan from Slide 7.
- Slide 13 – Summary: Your final slide will stay up for the duration of the Q-and-A session. This means that it is valuable real estate and you should use it to list three to four key points.
It’s important to note that these 13 slides follow a storyline. This deck framework is best used when presenting to a crowd of investors. In a boardroom setting, where you’re more likely to be interrupted, you need to be prepared to shift from a 10-minute pitch to an elevator pitch.
To hear more of Frank and Michelle’s advice on pitching, check out the lecture video below.