I spent about six hours over two days this week reviewing three ventures’ pitches for MIT VMS Demo Day. It was deeply gratifying to see how much the founders improved their pitches after getting feedback from the mentors.
In the process I picked up a few tips from other mentors on how to improve investor pitches as well as recalled a few tips of my own I hadn’t shared in some time.
- Use logos instead of or in addition to company or university names. Most pitches had not only team members with lots of work and academic credentials but also an advisory team with deep credentials. This resulted in way too much text under the photo of each person on the team and advisors slides. Typical information overload problem. One of my co-mentors suggested using the logos of the companies instead of spelling out their names. Lots of logos are recognizable and graphic images are more quickly scanned and processed than lots of text.
- If your team has worked together before, emphasize it. Experts like Jessica Livingston and Sam Altman of Y-combinator have stated in video interviews that the vast majority of successful startups have founder teams that have worked with or at least known each other for years. This is more important than where they worked or went to school. So emphasize this if it’s true of your team.
- Your last slide needs a call to action. Too may final slides imply reiterate the opening slide and include the company’s contact info. You are presenting for a reason, so if your app is in the App Store and/or Google Play, say “Download our app and try it out.” If you are going to have an exhibit table, say “Come see us learn more how we can build XYZ together.”
- Understand the meaning “market size.” Market size is NOT the total market cap of all the companies in the space. Market size is the amount spent yearly by consumers or companies on your type of product or service. It is not the total number of users of apps or platforms in your markets, though if you can’t find revenue numbers you can use total users as a proxy for revenue. Investors want to know your “total addressable market” – which is smaller than the total market; it means the portion of the market you can reach with your marketing and sales efforts. You need to build this number from the ground up, not just take an arbitrary percentage of the total market.
- Tout your achievements. If you have already received an investment investors want to know what you have achieved with that capital. Note achievements are results, NOT activities. If you haven’t yet received funding, what have you achieved since founding the company?
- Make clear what you will do with a new investment and how long it will last. It’s important that new money into the company go towards growth, not paying off debt or other expenses. And equally important is how long that money will last the company. Typical ranges are 12 to 18 months.
- If you have a customer testimonial, use it. If you have customers they should be willing to act as references. Better yet if they can give you a good quote to use in your presentation. Investors like to know what your customers think.
- Have a meaningful tagline. Too many company taglines are vague and abstract, like “Make the world a better place.” Your tagline should not be generic, it should be specific to your company, like “We help students become financially literate.”
- Make your presentation shorter than the allotted time. Things often go wrong at demo days. Projectors malfunction, events start late, etc. So if you are allotted five minutes makes sure you can deliver a great pitch in 4.5 minutes, leaving yourself some buffer time. Plus you should always leave your audience wanting to learn more about your company.
Finally, once you have your pitch down the penultimate step is to practice, practice, practice. Having a friend video your presentation and critique it with you will also help.