SlideMagic Blog

Big market disruption, check. Experienced team, check. Company traction, check. Trimmed down the investor pitch deck to 10 minutes, check.

But you forgot one thing: the sales pitch. Yes, this is an investor presentation and not a sales presentation, but still, every pitch to an investor should include an example pitch to a potential customer. The investor needs to get a feel that a customer will actually buy your product. The sales story on the slides is important, but even more important than that: they way you present the slides as a salesman.

The traditional business plan used to be a 200 page Microsoft Word document. A large part of it was filled with fluffy market background information and more fluffy industry buzzwords, frameworks and mission statements. It was always out of date. Its primary purpose was to rest your hand on it and say: “We have a business plan”. Nobody would really read it.

In most startups, the business plan is replaced with a large PowerPoint slide deck that evolves rapidly over time. A selection of the slides in this document are upgraded to be used in standup presentations. The vast majority of them are dense appendix material.

Daniel Tenner wrote a good blog post about what it means when an investors asks whether you can email her a business plan. In short, after the initial pitch, the investor wants a document that can be emailed (forwarded to partners) that answers some fundamental questions about your venture. The content should be good, the content can be short, and you can afford to invest less in the design of the slides.

Whenever you present a piece of analysis (a table, a chart), round up the numbers so you are left with a digestible amount of numbers; so $1.3m instead of $1,354,673. And when you add up numbers, make sure the calculations are correct. And I do not mean just calculation mistakes, it is obvious that you lose credibility if you get the basic math wrong.

Adding rounded numbers can slightly alter the total of your sum. I usually make sure that the total is exactly what it should be, and make a short adjustment to the largest number in the addition.

For example: 3.49 + 2.55 + 1.25 = 7.27. But when you round up you get: 3.5 + 2.6 + 1.3 = 7.4. So I adjusted the 3.5 and will put in my chart 3.4 + 2.6 1.3 = 7.3.

Why? If you have to explain why numbers do not add up, it will cost you credibility. Secondly, most people actually will not ask, they will just go and check every number in your document. And an audience that is running mathematical calculations does not have time to listen to your story.

Watch out the quarterly results presentations to investors though. If you bump into rounding issues, you might have to add in those extra digits to make sure you are not misrepresenting the financial situation of your company,

Going systematically through the branches of your organization diagram is not the best way to get visitors from abroad excited about your company.

When you make a biographical movie, it is recommended to spend a bit more time on the period in the life of the artist where she delivered those stunning pieces of sculpture.

Following the sections of that business plan template you found online literally will not encourage investors to write you the check you want.

An interesting post by investor relations consultant Dominic Jones: very few bother to read a company’s annual reports.

It is easy to understand why. Annual accounts consist of 2 parts. One, the financial data. This is read by those who need them (analysts). Two, an attempt by the company to sell its strategy to investors. Here is why this section does not work:

• The pages are written in a verbose PR style, full of buzzwords and cliches.
• The pages contain verbal description of financial data that is much better displayed in graph or table form. “Europe grew by 5%, Asia grew by 10%”
• Long-hand text does not work very well to communicate business strategy, and the annual report is no exception
• The slick, polished, permanent look of the annual report instantly reduces its credibility. The audience likes real, genuine, authentic stories.

A lot of money is invested in the layout, design, and printing of these annual report. Is this money not better spend by improving the quality of that earnings announcement presentation PDF that everyone IS reading?

Recently, I designed an investor presentation for a real estate developer. Most PowerPoint presentations designed by people in this sector look like a real estate catalogue: page after page of small images of buildings with square meter indicators.

I did something different. One property per page, one page-filling photo of a close-up of the building, with a short story about the property in a subtitle at the bottom. You get the feel of the quality of the building without seeing the entire structure. Similar to a fashion catalogue where it is actually hard to see a full photo of a suit.

Remember your audience. This presentation was for institutional investors, not for architects or property buyers.

You do not win over VCs by trying to prove your point by entering a debating contest (even if you are right). The two of you have to sit on a Board together. The VC needs to pick Board seats, the entrepreneur needs to pick battles.

Last week I was presenting at a startup pitch competition at the Technion University in Haifa, Israel. After my talk, the contestants had 3 minute each to pitch their business idea. Some observations inspired by the evening, and not necessarily related to any of the contestants.

• Do not speak too fast. It is better to make sure the audience gets all you say, than cram in a 10 minute pitch in 3 minutes. OK, do not go the other extreme and speak so slowly that it becomes boring to listen to.
• Say what you are doing early on. Starting with a nice story and revealing your venture at 2:10 gives the audience 50 seconds to assess your business. While I always advocate to sell the problem, not the solution, sometimes you might have to cut the problem section short if you have just 3 minutes. “Gasoline prices are high”, that is it, time to move on to what you want to do about it.
• Decide what is really important in a first pitch. Some details such as extensive elaborations on revenue models or team backgrounds can probably wait for your second 30 minute pitch.
• Do not bring up concerns that take a lot of time to explain, you want to keep the excitement and momentum going. Examples: complicated comparisons against the competition, or a defense why you picked a small market segment to start. Three minutes is not enough to present the results of a strategy consulting project.

I have now written a few pitch presentations in the healthcare sector. Medicine is complicated because professionals use incredibly difficult terminology (often derived from Latin) And the worst for a presentation designer: long words that are impossible to fit in boxes and shapes. A second factor adding to the complexity is the sheer breadth of knowledge required to understand things (doctors study for a long time before being allowed to practice).

The result of this: incomprehensible pitch decks that can only be understood by medical professionals or investors with some sort of medical degree.

In my designs, I try to get the best of both worlds: a presentation that is completely understandable to an outsider, and still credible to a medical professional.

• Start the presentation with a very short 101 on the disease area that can be skipped by professionals. Medicine is complicated, but when you zoom in to one micro therapy area it is actually surprisingly simple. Especially for medical devices (biotech is harder).
• Aim to write the presentation with zero professional terms. Usually I can get there with a few exceptions.

Medicine seems similar to the legal practice, where over the years, practitioners developed their own “secret language”. It is time to open this up, especially when doctors need to face the outside world to get their startup ideas funded.

The more I think about it, the more I come to the conclusion that video pitches have a great future. Especially as an alternative to startup fund raising decks that now get emailed “cold” to potential investors. Why?

• The world is moving to a minimalist presentation design style that makes it harder to understand decks without verbal explanation.
• Somehow, I find audio tracks not very interesting to listen to. They take too long for a situation where you do not have direct interaction with the speaker. They just go on and on
• Startup pitch competitions have shown me that it is possible to get across a lot in just a few minutes of presentation time. You just need to prepare. Videos are high profile, people will invest a lot of time in getting it right. The result will be a higher quality pitch than someone “winging it” in front of a live audience
• A very important part of an investor pitch is the team. A video of the presenter gives already some clue about the CEO of the business.
• You can make sure people will listen to your entire story. When you set expectations (watch this 5 minute video) and investors see the counter counting down I think it is highly likely that they will go through to the end. Much more likely than a slide deck: click, click, click, “bleep” from the Blackberry and they get distracted.

Other big applications could be job interviews, or university applications.