What Is Effective?
The purpose of an investor presentation is not to close a deal, but to get you to the next step. A two minute elevator pitch results in a request for an executive summary. An executive summary gets you invited to present to potential investors. A 10 slide presentation gets you invited to an in depth session with the funding group.
Don’t try to tell everything about your company and your strategy, which will overwhelm your audience. Tell them enough to arouse their interest.
Format Tip: The 10-Slide Investor Presentation
The 10-slide investor presentation is the best starting point for developing your presentations. It will cover all the important investor issues. You should be able to deliver the presentation in as little as 8 minutes, as this is all some of the funding forums allow. If you have 10 or 12 minutes, you can verbally elaborate more detail; don’t add more words to the slide. If you are given 20 minutes to present, you can add a few additional slides (more detailed financial projections, current customer details, more complete competitive analysis).
You want the audience to listen to you, not read or think. Don’t put everything on the slide, keep it simple. Add the detail verbally. Your audience can read at least 5 times faster than you can speak. Have 4 (optimum) to 6 (max) bullet points underneath a concise, conclusion lead in title on each slide. The lead in is the conclusion you want the audience to remember from the slide, not just a topic; e.g. $5 billion addressable market growing at 20% annually, not Market Size. Each bullet point is a summary; you add the important detail verbally. Have all the bullet points presented at once if you are doing a power point presentation; adding them one at a time distracts the audience from listening. The audience will read each slide in 5 seconds, understand what they are going to be told, and then listen to what you are saying.
Never read or repeat the written words verbatim. The audience has already done that.
Use simple graphics and large fonts (24-32); many of the presentation rooms are quite large, and your most likely investor may be sitting in the back row. No cute animation unless that is your business.
- Cover (usually shown as you walk up to the podium)
- Organization name
- Tagline value proposition: what you do, very simply stated
- Presenter’s name and title
- Contact information (location and email address)
- Describe the need of the marketplace (the pain you’re alleviating)
- Size the potential addressable market
- Focus on current market not research on future size potential
- Describe your product/service and how it solves the problem
- Minimize in-depth technical explanations, focus on core benefits
- Compare to existing solutions
- Business Model
- Explain how you make money, who pays, how much
- Discuss customer retention capabilities
- Indicate future product/market extensions
- Discuss protectable position, core competencies, and competitive advantages
- Marketing and Sales
- Explain target market penetration strategies
- Discuss channels of distribution and partners
- Discuss current customers
- Convince the audience you can get paying customers without huge marketing expenditures
- Discuss current competitors, how they compete
- Discuss emerging competitors or technologies
- Convince audience why you’re good and will succeed, not why competitors are poor, what’s your sustainable advantage
- Management Team
- Describe key players and their relevant experience
- Include outside board of directors/advisors if they have relevant expertise and backgrounds
- Include professional advisors only if they have obvious name recognition
- Discuss holes in the team, how and when you plan to fill them
- Financial Projections
- Provide 3-5 year forecast of revenues, income and cash flow (EBITDA)
- Discuss key assumptions and metrics (number of customers, launch dates, headcount)
- Demonstrate it’s a bottoms up forecast (numbers of customers) not a top down (3% of a $10 billion market)
- Add levels of detail (monthly breakout, gross margins, marketing costs) only if important to understanding profitability), save for in depth sessions
- Funds Required and Use of Funds
- Indicate amount of funds to be raised; use precise amount, not a range
- Indicate amount current investors are willing to provide (if significant)
- Provide detail on how amounts will be used
- Avoid using new funds to pay old debts or payables if at all possible; at least just say it’s for working capital
- Recap and Milestones
- Restate current status and positive traction
- Indicate milestones new financing will support
- Recap cash flow breakeven and profitability timetables
- Indicate timing of exit event (avoid naming possible acquirers and don’t estimate investors returns unless they are very unsophisticated)
- Close with expected timing of fund raising (not too optimistic) and a call to action step
The executive summary is a 1-3 page text version of the 10 slide presentation. It includes many of the points you make verbally during your presentation. Again though, don’t try to get to much detail: it’s better to make the summary more readable by using bullet points, tables or graphs. Stick to facts, no platitudes.
Use headings and easily readable fonts.
The elevator pitch is a 1-2 slide summary which you can easily verbalize in 2 minutes. It is a recap of the concise conclusion statements on each of the 10- slide presentation slides.
You should practice the verbal presentation until it flow easily and automatically.
On all of these presentations, you should include a contact information line. Always store the presentation files using a complete description (e.g. ABC Inc Investor Presentation), as these are often submitted or transmitted electronically.