SlideMagic Blog

I see many startups pitching for VC or angel money early in their life. The investor presentation is often first piece of collateral that the company produces. The second one is a web presence and people ask me how it should look like.

A fund raising web site of a company that is not operating yet is completely different from one that provides a service and/or processes live transactions: it is a relatively static piece of fund raising content. The only visitors it is likely to get are investors you have met or heard about you checking out the company, or maybe potential users that have found out about you in the rumor mill. The web site should be designed with that audience in mind.

The content of an investor web site can be very minimal, look and feel should be highly professional. Let’s start with the look and feel.

• URL. Make sure that you have the URL to your company name and that your sites uses it (and that you use it for your emails). This is check 0 of an investor to see whether you are actually real or not. Gmail addresses and Google sites do not score you any points here.

• Template. The site needs to look like that of a serious company, not a MySpace social media profile. Just setting up a Wordpress blog in disguise (i.e., a blog template that is used as a static site) with a nice minimalist template should do (go to sites like Theme Forest to find one).

I am just looking at pictures of myself while presenting and realize that I forgot to take of these huge white name tags that you always have to wear in conferences… Well, it happens to the best of us.

Another situation where this produces poor pictures: group photos. A nice scatter of bright white, flash-reflecting squares smiling back at you. When you are posing in a group picture, ask everyone to put the tag in their pocket for a second.

The pillar template goes back to the early days of PowerPoint. A building structure is a useful concept to show that things are dependent on each other, and will already collapse if only one pillar is removed. Still, using a Greek temple will give your PowerPoint presentation that instant 1990s feel. I am not sure that is what you want…

A politician in a television interview can sometimes get away with giving an answer to a different question than the one that was asked her. Or filling time with some meaningless generic statements, after which a smile indicates that she is ready for the next question.

In a VC fundraising pitch (or an interview for a position) this does not work. If you think you need more time to get to an answer, think before speaking. You cannot parallel process coming up with an answer and speak coherently (both will be bad). If you hope that by repeating something what you said before you might manage to skip the difficult question, it will just bore the VC and make her impatient.

Sometimes it might be best to admit that you do not know or do not want to disclose it.

Venture capitalist Mark Suster has a blog with a large following, and is also active in producing video about venture funding and startups. A few days ago he hosted a live startup pitch for funding on his show. As I said before, I am a big fan of making (at least part of) the fund raising process more public. The 53 minute video is embedded below, I watched it and give some of my thoughts.

I have great respect for these entrepreneurs to be vulnerable and go with their pitch on video, and they were probably a lot more nervous than when sitting a conference room without a camera. I have made the comments below a bit sharper on purpose, in the hope that other people pitching for VC money can learn from them. In part I am helped by my Dutch/Israeli cultural environment where people use a slightly more direct style than in the US.

Look how Mark is forming an opinion about the business right in the first seconds. What is it that we talking about? Many investor presentation deck hold off the answer for too long.

The opening sentence full of buzz words gets cut short. Mark starts paraphrasing “Right, so you are a sort of eBay/Etsy widget for blogs”. It is indeed a better way of saying things, but hidden in this comment, Mark is already hinting at his major concern about the business. The presenters could have come out with a snappy/high-energy “OK, that you call it like that for now, but we have something amazing under the hood that makes us stand out in the middle of all these eCommerce giants, advertisers, and affiliate programs.”

I often need a cloud shape in PowerPoint to draw a network diagram. The standard PowerPoint cloud is not very pretty. Here is a way to construct a new cloud shape in the style of the logo of the iCloud service by Apple.

Takamasa Matsumoto originally discovered how the iCloud logo is infused with golden ratios. If you use these proportions to draw some basic shapes in PowerPoint, you can combine them using the shape union command (on the Mac right click the selected shapes, go into grouping and select union). You see that I use 2 extra rectangles to fill up the shape.

Here is the final result compared to the standard PowerPoint cloud shape, with heavier lines around the shape.

Every presentation slide should have a clear organization, and direct the eye. Paintings are a good example. Have a look at this painting by Monet: The garden at Sainte Adresse. It is clearly divided in 3 horizontal bands, has a strong diagonal cutting across, and the flags and steam clouds from the boats  provide energy that leads the eye from left to right.

Back in the old days at McKinsey, your interviewing skills as a consultant on a team would be evaluated roughly on 3 levels: 1) you got the piece of information you needed (the market for [x] is $1bn, 2) you managed to get an insight that was completely new to the team, and 3) you actually made the interviewee realize something she did not know before.

Great journalists know exactly what questions to ask at what time in the interview. The interviewer draws out the story of the interviewee.

When designing a presentation think of your self as the interviewer. If you design something for someone else, then you can take it literally. If you design something for yourself, imagine interviewing yourself in front of a big audience.

Poor interview question: what five pieces of research support the assumption about the target market size? Good interview question: what, I thought only 5 people need this product, give me a feel for why this thing is huge? Poor interview question: “Now that we have spent the past 30 minutes analyzing the market, let me ask you: what do you actually want to achieve?” Good interview question: “before we dive in, tell us quickly what your ambition is”. Poor interview question: “So let me re-phrase what I think your story is”. Great interview question: “But is your story not a bigger one if we draw the parallel with this?”

Then you will have hit level 3, the interviewee walks out of the chair with a different perspective, and the re-designed presentation will be more than a beautification of existing slides. Which interview do you want to follow to the end, and which one will you skip with the mouse or remote control?

Hardly anyone puts a valuation number on a PowerPoint slide in an M&A negotiation or an investor pitch. In publicly quoted companies there are legal constraints, but most of all: a buyer is unlikely to believe a number put up buy the seller. So how do you as a seller get the buyer to move in the right direction using a presentation?

The answer is: teach and spoon-feed the right assumptions. Someone on the buy-side is going to construct an Excel valuation model of your business. Put yourself in her shoes and guide her through the process.

What components of value are there? The business units of today. The future growth of these existing businesses, but remind her to include growth options beyond that as well.

Valuation models are forward looking, financial data looks backward. So it is important to teach the buy side how to model your business going forward without giving the answer. Instead suggest how the sales of your business works (it is all about number of stores and sales per square meter). Suggest some non-financial growth rates, or give an indication of your store opening program. Explain how the cost structure works. We can support 50 more stores without adding cost to our head quarters.

Give the sell-side a quick refresh about the theory of calculating discount rates. What should be taken into account. What ranges of values do you see?

The best way to prepare such a presentation is actually to design a valuation model yourself without inside information. It teaches you the process the other side will go through.

Method 1 - emphasize subject: you can apply all bold, italics and underline effects, increase the font size, and pick a nice bright red character color (make sure you use all effects at the same time)

Method 2 - de-emphasize background: cut out all the visual clutter and distractions so that the point you want to make just appears by itself.

Guess which one I prefer?