There are many opinions on creating a pitch deck and presenting to potential investors, but there is still a big gap between what entrepreneurs perceive to be important and what investors really value during a pitch presentation.
This post is the first in a series, where we will provide real examples–the good, the OK, and the bad–of early stage pitch decks we’ve seen over the years here at Matrix Partners. We’ll share, slide by slide, what investors are thinking (but not usually saying) when you present. And, we’ll talk about the key questions you should be asking yourself when deciding how to create your pitch. Our hope is to help founders nail their pitches so they can more easily communicate their incredible ideas and find the right VC partners to help them grow their businesses. We’ll be publishing posts for each of the key sections of a pitch deck:
- Company Purpose
- Market Size
- Business Model
- Customer Acquisition Funnel
The deck is the backbone of your pitch, and in this series we’ll be going through slide by slide to help you tune each one. But first we want to talk about your overall presentation, because no individual slide in your deck will make or break you. What’s most important is the overall impression you leave when you pitch. Founders with sales DNA get this intuitively, but some technical founders or those without sales experience tend to underestimate the value of pitching well. Instead they feel that the substance of the business speaks for itself. This is partially true, but being a CEO is selling (recruiting, fundraising, getting your first customers and partners) and showing you can do it well is a reasonable expectation from investors.
This doesn’t mean you should transform into an over-the-top sales promoter. It’s better to be a wonky coder who can’t sell than to be seen as a promoter. But by understanding a few core aspects of how pitch presentations are received by investors, you can increase your chances of inspiring and closing a great investing partner.
There are two aspects of your presentation that matter the most:
- The story you tell – How you weave your slides together into a narrative.
- How you present – How you connect with and read your audience.
Here are my top five pieces of advice to deliver a winning presentation:
1) Tell A Narrative, Don’t Just Present Slides
More important than the specific slides you present is how you weave them together to convince and inspire your audience that you are going to build a successful company. I’m not talking about a made up story or crazy theatrics. I’m talking about how you put the facts and data together to sell a vision. When investors understand and believe in you and your vision, it increases the value of what you’re selling.
You want your audience to feel like they’ve heard the vision and evidence, and have come to their own conclusion that this is a winning idea and team.
Your narrative will vary based on your stage, and primarily whether you are pre- or post- product-market fit. Your milestones in these stages are different and thus your pitch will be different. If you are pre-product-market fit, your story will center on the opportunity ahead, and the potential of your business to achieve it, perhaps through a killer product demonstration. If post-product-market fit, the story tends to focus on the results: “look at our traction, traction, traction. Here’s how we’re getting that and what we’re doing next.”
But, your pitch also needs to be tailored to your strengths as a business. It could be built around your team and how you’re a fit for the opportunity ahead. It could be all about your unique insights and take on a problem. It could be a product demo that wows everyone in the room. Or, as in the last example, it could be all about your product-market fit.
The key to a great narrative is to identify your strengths and build your story around that.
The process that worked for me when I was pitching my company, Betfair (at the time, Flutter.com), was to start with a storyboard and sketch my story out on rough slides. Then, once I had the flow worked out, I built in the information to explain and validate my narrative. It’s important to get the story right before rushing to fill in the details. People tend to get wrapped up in the details and forget to build a compelling storyline.
2) The First Five Minutes Matter, You Need a Hook
Aaref Hilaly of Sequoia wrote an excellent post on presenting to investors. He explains the importance of capturing attention in the first five minutes to earn your chance to go into more detail for the next fifteen minutes. He suggests opening with three slides:
- Show what’s changed – what’s the shift, breakthrough or innovation that creates an opportunity
- Say what you do – one sentence about what you do to capitalize on that change
- Give the fast facts – when you founded the company, your stage, number of employees, what you’re looking to raise. This gives context for the rest of the presentation.
I agree that you need to capture attention right away – no long preambles or you will lose your audience. These three slides are one way to get to the point quickly. But, whether you use these three slides or in this order, will depend on the narrative you are telling (see #1). Think about what is most compelling about your business and team, and build your hook there.
3) Listen and Respond To Your Audience & Use Both Audio and Visual Clues
The best pitch is a conversation rather than a sales pitch. And, the best presenters have the ability to listen while they’re talking, watch the audience for clues that what they are saying is resonating, and then adjusting if needed. If you are seeing raised eyebrows and questioning looks, take note and clarify what you’re saying. You may need to push or pull back on the points you’re making.
As you talk, watch and listen to your audience and then adjust your pitch based on the clues you’re receiving.
Sometimes VCs won’t ask their questions – they know you’re trying to cover a lot in a short amount of time – but there will still be visual clues. You need to recognize these and address unvoiced questions or concerns because it is something they will bring up with their partners during the discussion after you leave the room.
There are a few tactics you can use to listen to your audience and adjust:
- Blunt force. Address questioning looks head on and say, “it looks like you may have some concerns. Let’s dig into those.”
- Use your EQ to determine if you’ve convinced them.If you’re seeing confusion or concern on your audiences’ faces, explain your point in a different way.
- Leverage your team. In general, the founder/CEO should do most of the talking unless others have key insights to add. But, team members can play the role of watching to see if everyone is getting their questions answered. If not, they can say to you, “Bill, I think Nancy may have a question about that last point.”
It’s also important to keep the conversation moving. If you find the discussion has gone off on several tangents, uplevel it by repeating the higher level purpose of what your company is trying to do and then move on to your next section by saying something like, “I thought we’d talk next about our customer adoption, unless you have more questions about the product.”
4) Relate Your Story To Your Audience
The best way to convince your audience is to frame the problem or solution in a way that relates to the issues they experience directly. This isn’t always possible, but for most consumer or B2B products, it is.
Sketchdeck, who pitched (and got funded) by Matrix, is a good example. They offer outsourcing services for presentation design. Their pitchdeck is strong with a compelling intro and narrative, but possibly a more convincing way to frame the value they provide would be to build a story around a VC getting their own presentations completed: How long does it take you to build a presentation? Do you struggle with the design aspects? What if you could draft the story, provide bullet points, and have someone else (at a lower rate than your time is worth) come back with a beautiful presentation.
5) Be Confident But Honest
You obviously want to present a very positive story and appear highly confident about your business. But, over confidence can be a big red flag. Investors are not just evaluating your business, but also what kind of person you are going to be to work with. Building a business is extraordinarily hard. For it to work, you need to be able to recognize potential problem areas and be open to getting help when you don’t have all the answers.
We understand hard challenges are part of building a business and we want to understand how you will lead your team through them.
If you are facing some tough issues, don’t avoid these, bring them up in the discussion. And, when asked tough questions, don’t hand wave or try to deflect. Tackle them head on. This is your chance, perhaps your only chance to address these questions. Hand waving doesn’t make them go away, it just makes your audience lose confidence in you and feel that you are trying to hide something.
I recommend brainstorming all the potential questions investors might have and ensure your presentation addresses them. And, when asked questions, answer them openly and honestly. It’s okay to say you don’t know or that it’s not an area you’ve tackled yet, but you intend to figure it out and this is how we’ll do that.
How you present matters, and in all cases it leaves investors with an impression – positive, negative or neutral. You don’t have to be a master of sales and public speaking, but you do need to be genuine, inspiring and convincing and you can do that by telling a compelling story and listening and responding to your audience.
A couple fun examples. These are pitches in a demo/competition like setting, so different than pitching to an investment team in an office, but they still demonstrate the lessons I’ve talked about in this post:
Pitches published by Entrepreneur.com from an AlleyNYC / Techstars event.
- Springleap –
- While it’s a confident pitch and he starts with a good hook talking about the size of the market, he does not watch his audience and adapt.
- He’s presenting a lot of data, very fast, and people look overwhelmed and confused.
- The Q&A is where he shines. He does a nice job of tackling the hard issues head on, including explaining why they aren’t further along after several years, and talks about how investors are using his product to put it into their terms.
- TripExpert –
- Great hook – they tell a story we can all relate to.
- They address a tough issue directly in the presentation – how to compete with TripAdvisor, the $11B market leader.
- But, in the Q&A they struggle with a tough question that they should have anticipated and they get tripped up when their partner examples don’t align with their overall narrative.
Next up, we’ll tackle the first slide in our slide-by-slide analysis.