A successful founder on how to pitch – including a founder’s biggest challenge

the problem

Henry Ward’s first start, Secondsight, was an abject failure. But Manu Kumar, an investor in venture capital firm K9 Ventures, gave Ward an idea for a second startup that resulted in Carta,  a platform valued at $1.7 billion for buying and selling shares in private companies. (Kumar is a cofounder.) But that’s not the point of Business Insider’s interview with Ward, The founder of billion-dollar startup Carta dissects the pitch decks that helped him raise $448 million.

While there are probably thousands of articles on how to pitch, including several on this blog, what’s rare and valuable is to have a successful founder walk through his pitch decks that succeeded in raising almost half a billion dollars.

I was pleased to see Ward promote the book The Presentation Secrets of Steve Jobs, by Carmine Gallo, my favorite book on how to do a killer presentation. One of Jobs’ and Ward’s key takeaways is to practice. As the old joke goes, a musician asks someone on the street, “What’s the way to Carnegie Hall?”, he replies, “Practice, practice, practice.” Not enough presenters memorize not only their presentations but their every move and expression in delivering their pitch, just like an actor memorizes their part. Ward used to write out his pitch literally word for word. Once he did that he could improvise.

Ward explained the entire business model of Carta in just three slides. As he says, make every word and image count.

Ward has an interesting argument on what an  early stage pitch deck should accomplish. While I, and many others, see it as a “convincing game” Ward sees it as getting the investor excited about the venture and thinking about what the company can become in the future. He sees the pitch process as a filtering process, the founder needs to keep going until he finds an investor “that’s passionate about the problem you’re solving.” Investors who are not excited will ask a bunch of questions about what could go wrong in your business. An investor who gets excited will ask about what could go right! He could tell in 10 minutes whether an investor would invest in his venture or not.

Ward had a great tagline for his business, something all founders need to work on: “Nasdaq for private markets”. Still persistence is what paid off, he had to go through about 70 angel investors to get a few who were truly excited. And those investors would then call other investors and say, “Hey you should check this company out.”

Ward sees The Problem as the key slide in any Series A  deck.  What Ward calls the “domino chart” is a bar chart that illustrates the network effect of Carta’s business model.

An important point that Ward makes is that financial slides are NOT public. His deck had about 10 financial charts including payback period, average contract value, net dollar retention and margin assets. Metrics are vitally important in providing a snapshot of the company. Ward’s comps were all mega successes like Google, Facebook and LinkedIn – all companies that leveraged the network effect to world domination.

Because VCs are looking for grand slam home runs, Ward articulated a vision that went 20 years out! No five year plans for him! Another key point is to fish in the right pond. Carta was a fintech company. Ward took 30 meetings on Sandhill road and didn’t get a single term sheet. He then went to New York City. Result: three firms, three term sheets. As he says, “fintech infrastructure just wasn’t a Silicon Valley thing in 2014.”

Ward recommends that founders have a set of pitches: the 30 second version, the elevator pitch; the two-minute version, the intro pitch; the 10 minute version for recruiting an executive; and a 30 minute pitch for investors. As Ward says, he can do these pitches “in my sleep now and you will too if go out there and do the reps.”

His biggest problem in his first pitches was demonstrating that he had a large enough market – not an uncommon problem. Beyond product-market fit Ward talks about message-market fit. That means finding the message that will resonate the most with investors. He recommends that you practice your pitch with CEOs who have raised money. And by constantly iterating on your pitch you can figure out what is resonating and what is not.

If there is one big takeaway from this interview it’s practice, practice and practice some more. But make sure that you are iterating your pitch, it doesn’t help to keep practicing a pitch that doesn’t resonate with investors. And how do you measure resonance, the level of excitement investors demonstrate. It’s that easy to see and that difficult to achieve.

Strategic elements that rarely appear in a startup’s presentations

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There are hundreds of books, articles, and blog posts on what should go into a startup’s investor presentation and a very large number of what should go into a customer or partner presentation, but Jeroen Kraaijenbrink‘s Forbes article The 10 Ingredients That Every Strategy Should Have has four elements that every founder should include in their company’s strategic plan. Think of this as the founder’s presentation to their company at an all-hands meeting.

The first six of the author’s core elements should be included in your investor presentation and every one of your staff should be familiar with them, though Partners, number 5, can often be overlooked.

  1. Value Proposition: What products and services you offer, how you offer them, and what added value they have for the customer.
  2. Customers & Needs: The organizations and people you serve and which needs of them you fulfill.
  3. Competitors: Others that your customers will compare you to in deciding whether or not to buy your products or services.
  4. Resources & Competences: What you have, what you are good at, and what makes you unique.
  5. Partners: Who you work with and who makes your products or services more valuable.
  6. Revenue Model: What you receive in return for your offer, from whom, how, and when.

But let’s take a more detailed look at the last four elements of Jeroen Kraaijenbrink’s list of ten elements:

Risks & Costs: What financial, social, and other risks and costs you bear and how you manage these. Any with-it founder should have the financial costs of their venture down pat. Operational costs are the easiest costs to predict and to manage. And as such they will appear in your financial statements. However, what about social risks? And what about the “other risks and costs,” such as dealing with government regulations, your startup may face?

Going into depth about social risks is well beyond the scope of this article. But founders need to be aware of such major issues of the day as: diversity in startup’s founders, senior execs and staff; income inequality; and for manufacturing and packaging companies, environmental impact issues; and work-life balance. The day when investors and senior managers only had to worry about profits and losses are long over. Today’s companies need to be active forces in their communities. Founders need to assess the social impact of their companies. My recommendation to founders is get your heads out of social media and tech news and pay attention to local, national, and international affairs. The Washington Post, The New York Times, and the Guardian, PBS News amongst other news sources, can keep you abreast of what issues you and your team need to be aware of and take into account in your tactics and strategy.

Values & Goals: What you want, where you want to go and what you find important. I’ve written previously about values in startups in such posts as Values: the bedrock of startups and Netflix Culture and Values. Values are the foundation of any venture. If you haven’t elucidated your venture’s values to your team, what are you waiting for?

Organizational Climate: What your culture and structure look like and what is special about them. I consider corporate culture so important that I devote an entire category to it on this blog. Corporate culture is the invisible hand of management and can be a key competitive advantage. It’s the layer built above the foundation of corporate values.

Trends & Uncertainties: What happens around you that affects your organization and what uncertainties you face. A VC I worked with was fond of terming this as exogenous risk factors, that is external factors over which you have little or no control, like government policy and regulations. And like social and governmental risks and costs, founders need to carefully monitor their environment and always be on the lookout for issues and trends that could affect their venture, for good or ill, in the near-term, medium-term, and far term.

When I worked for the Thomson Corporation, now Thomson Reuters, I wrote a business plan for a new startup within Thomson. I wish I had kept a copy of their format. But there were two elements in Thomson’s business plan template that I’ve not seen elsewhere: What is the absolute best case scenario for the venture? What is the worst case scenario for the venture? and What risks does the venture face and how will you deal with them?

Take a look at a prospectus for an IPO for a public company in your market. It should contain a detailed section on risks that is worth studying and comparing with your list of financial, social, governmental and other risks that are part of your strategic plan.

Finally, review the Strategy Sketch above, that contains many of the same elements as the business model canvas.  Both are excellent planning tools for founders

Pitch tips from a leading VC


A recent megatrend that has greatly benefited founders has been the willingness of leading venture capitalists to share their knowledge with founders. Brad Feld of Foundry Group, Fred Wilson of Union Square Ventures, and Guy Kawasaki, Garage Ventures have lead the way. (What do they have in common? They’ve all met me!). Now they are joined by Scott Kupor, the managing partner of Andreessen Horowitz (a16z), whose portfolio includes multi-billion unicorns like Lyft, Slack, Pinterest and Airbnb.

I became aware of Scott Kupor’s book via Carmine Gallo’s Inc. article Five Essential Pitch Tips According To A Legendary Investor Behind Lyft, Slack, And Airbnb. Carmine is the best writer on how to do a presentation that I know of. You can search my blog for mentions of his books, which are all highly recommended. Start with The Presentation Secrets of Steve Jobs, a classic. Carmine has been writing for Inc. for some time and I make sure to never miss an article of his.

Despite all the books and articles I’ve read about how to do a VC pitch I learned a lot from Carmine’s interview with Scott Kupor. You can watch the video, which is embedded in Carmine Gallo’s article. Here are the five tips from Scott Kupor with my annotations.

1. Market Size

It’s interesting that Scott puts market size first. Of the three main determinants of a VC investment, team is usually put first, followed by either market opportunity or product/secret sauce. But I find that founders have the most trouble with market size. Either they make the beginner’s mistake of taking some arbitrary, and far too large, percentage of a large market (“If we just get 15% of the entire $92 billion shoe market …”), or they muddle through some proxies for their market. Read my post Sizing your market opportunity for a more sophisticated approach.  But Scott has a unique approach:

It’s an entrepreneur’s job to be a “patient and inspiring teacher.” In other words, don’t assume that your audience—even one made of up VCs—understands your market or its potential size.

This goes back to the need to tell a story rather than just recite dry statistics or show complex graphs.

2. Team

As I tell founders, there are two questions a VC has to answer in the positive to fund you: Is this a billion dollar idea? and Is this the right team to execute it? Too often I find entrepreneurs, especially students and recent grads, focus on their academic credentials – their list of degrees from prestigious universities – rather than one thing: what expertise and experience does their team possess that in Kupor’s words “… make this team – hands down – the best team to approach this idea?”

3. Product

Here’s an interesting point from Scott Kupor: “investors love to learn and are fascinated by how something works.” He uses the term “idea maze” for the twisting, turning process that turns an idea into a real world product. But that’s understanding your idea maze is not enough! Investors want to know why your product is 10X better than the existing alternatives along the typical dimensions: faster, better, cheaper, easier to use. Peter Drucker is responsible for this, as he stated that a new product must be 10x better to displace an incumbent product. And note, VCs will tell you they need to make 10X their investment to have a successful fund. Show them enough 10Xs and you may just get funded! 10X would make a great name for a company if it weren’t already taken.

4. Go-to-Market

Like market opportunity this part of the pitch tends to be a weak spot for the founders I mentor, perhaps because virtually all of them are first timers. Those who have previously founded a startup or worked an an early stage company realize how important the customer acquisition part of their pitch is. Kupor says this is often the most underdeveloped section of the pitch, especially for early-stage companies. You need to present a combination of your business model and marketing plan that demonstrates you know how you will acquire customers at a cost that is just a small fraction of their lifetime value. In other words, profitably. You don’t need complex spreadsheet models forecasting 5 years of financials. What you do need are sound assumptions derived from a lot of first hand interaction with customers.

5. Planning

Planning boils down to one thing:  what milestones will you reach with the money you are raising in this round? A corollary of this is, how long with this round last? A range of 12 to 18 months is typical. Fund raising is resource intensive for founders, so you don’t want to have to raise another round too soon. On the other hand, if you are going to grow at the dizzying rate that VCs expect, you are going to need more funding in less than two years.

I teach founders that the job of their product is to make its users successful and satisfied. And when selling to the enterprise find a product champion who will see that by driving adoption of your product for their firm they will be rewarded. If you can make your customers successful, your venture will be successful.

Scott Kupor makes a similar point about VCs. They want to look like heroes to their customers: their limited partners whose money they are investing.  So, consider VCs as your customers and thus it’s your mandate to help them succeed by making your company a success.

Pitch tips from the founder of Canva

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I consider Carmine Gallo as one of the foremost experts on presentations and pitching. He has written several books, including my favorite, The Presentation Secrets of Steve Jobs, and often writes articles for the business press about presentations. Four Remarkably Simple Pitch Tips From An Entrepreneur Who Turned Her Idea Into a $2.5B ‘Unicorn’ is a typical Gallo article in which he elucidates tips from Melanie Perkins, co-founder and CEO of Canva, a provider of online design tools. Here are her four presentation tips:

  1. Share your origin story. This is one of my favorites tips. I advise my mentees to start their presentations with the story of how and more importantly, why, they started their company. Story telling is one of the oldest and best communications techniques. The origin story is a great way to introduce the problems you are solving. While teaching design at university Perkins observed how difficult tools like Adobe Photoshop or InDesign – the students were completely overwhelmed.

 “They were struggling just to learn the very basics. There were so many buttons and it would take months to learn…I wanted to make design ridiculously simple.”

  1. Use feedback to refine your pitch. Melanie Perkins was rejected hundreds of times. But rather than give up, she and her partners used each rejection as an opportunity to improve their pitch or their strategy. Your pitch has to help investors understand the market and the gap you are planning to fill.
  2. Make each slide as simple as possible. Again this is advice I give virtually every founder, as virtually every founder crams two or more messages onto each slide.  I’ve found the reason that they do this is that they are afraid they will leave out an important point. Well, putting two or more important points on one slide insures the audience won’t remember either!

Perkins recommends that each slide contain just one point—one key message. Trying to include more than one message per slide results in confusion, and confusing messages are easy to ignore.

4. Show it in pictures. Steve Jobs was a master of pitches and he followed this rule religiously.  I’ve been on a one-man crusade against bullet point presentations. But let’s face it, creating graphics in PowerPoint is hard; it’s so much easier to create a slide full of bullet points – violating principle three. This was one problem the founders of Canva set out to solve by creating a drag-and-drop tool to make it easy to add and edit photos while staying in Canva.

When Perkins and her co-founders learned that former Apple Macintosh Evangelist Guy Kawasaki was using Canva they arranged to meet with him. Within a few weeks, he had signed on Canva’s Chief Evangelist. I knew Guy slightly as he was a consultant to the Silicon Valley Bank when SVB was an investor and strategic partner of Throughline. And I’m a big fan of his book Startup 2.0.

Canva’s presentations must be pretty good as the company just announced a new round of funding, valuing the company at $2.5 billion!


Some refreshingly different tips on presentations


presentationI’ve read several books on presentations and innumerable articles. I even have an entire category on this blog about pitching. But the article on Business Insider by Troy Wolverton, This Silicon Valley founder is an expert in designing presentations, has some excellent advice I’ve not seen before from Mitch Grasso, founder and CEO of Beautiful.AI.

Grasso is a former software designer and serial entrepreneur who has raised millions of dollars in venture funding. Two of his startups, including Beautiful.AI, have focused on presentation software.

Here’s his list of what to include in a pitch deck:

Founder-market fit. Outlining how your team is the team that is best suited to solve this problem or pursue this opportunity is paramount. Aside from the West Coast bias in favor of Stanford, most investors could care less about your academic degrees. What they want to know about the team is what experience and skills they bring to bear on the problem they are solving. I almost never seen pitch decks do this; founders tend to list all their academic degrees and maybe jobs they have held at hot startups.

Product differentiation. Ok, you’ve heard this one before. But Grasso lists it number two for a good reason. There is a sea of products and services out there. What makes your product not only different but why it is better than anything else on the market?

Why now? Founders tend to totally overlook the issue of timing. But timing is critical: too early and you won’t have the necessary infrastructure to support your product; too late and the competition will have staked out the market. Founders need to explain why their product couldn’t have been successful previously.

Grasso sums up with this advice:

All this stuff about traction and go-to-market and business plans, that becomes important as you move further along, but in the earlier stage, it’s more about that vision. Its about convincing rather than showing the data.

But here’s what separates Grasso’s pitch advice from everyone else’s: he outlines what to leave out:

Potential acquirers. Doing this signals to investors that the entrepreneur isn’t committed to the company long term.

Top down market analyses. Painting a picture of a very large market then promoting the idea that the startup just needs a tiny fraction of that market is one of my pet peeves! If you want to demonstrate to investors you are a rank amateur take this route. Otherwise you need to present a bottoms-up analysis: how will your sales and marketing efforts acquire the early adopters? Then later adopters? etc. You should be able to defend your customer acquisition cost projections, as well as your lifetime customer revenue projections.

The five-year business plan. This is a holdover from the last century – I did my share of them. I call this Excel fiction – and it won’t make the best seller list. Even three years is a stretch, but stretch you must.

Here’s Mr. Grasso’s bottomline: “At the end of the day, the pitch is about you, and if you can’t convince somebody of your idea without a pitch deck, then you probably don’t know your idea well enough.”

Bigger fonts, less words, greater impact!


The most common and most serious problem I’ve seen in the hundreds of presentations I’ve reviewed over the past few decades is presenters cramming far too many words into a single slide. Just to recap, here are the problems with this practice:

  • Try as they might, people actually cannot multi-task. Thus they cannot read your many words while at the same time listening to you talk. If they try they will just get frustrated. e.
  • Too many words on a slide necessitates type that is too small: it is hard to read, especially for middle aged people, many of whom have developed age-related vision deficiencies. Smaller text has less impact than large type.
  • Less room for graphics, which have a higher impact and recall rate than text.

So I was pleased to read the Inc. article by presentation guru Carmine Gallo, Guy Kawasaki Explains Why Steve Jobs Used 190-Point Text on Presentation Slides. The sub-title presents the benefit: Make your presentations stand out with fewer words and bigger text.

Using larger text forces the presenter to user fewer words, which need to be more carefully chosen.

… most presenters try to put as many words as possible on a slide–Jobs did the opposite. He removed and removed and removed through every iteration. The result was strikingly simple, often just one word on a slide.

Jobs would go so far as to have a slide with just a single word, in 190 point type! And he would show slides with no text at all!

According to cognitive biologists, the human brain is far more capable of recalling information when it’s presented as pictures with few words–one or two words to accompany the photo. If you take a look at some of Jobs’s presentations, you’ll see he followed the guideline.

There is one other tip from Mr. Gallo’s interview with Guy Kawasaki: “He [Jobs] really practiced,” Kawasaki says. “He made it look easy because he practiced for weeks.” When was the last time you practiced your presentation for weeks?

How to take advantage of the serial-position effect


I came across the what are called the primacy and recency effects in an article on fake reviews.

Consumer psychologist Cathrine Jansson says some sellers might be aware of what is known as the primacy and recency effects. These theories state that people tend to remember the first and last items in a series better than those in the middle.

A little web searching turns up the article Serial-position effect on Wikipedia. “Serial-position effect is the tendency of a person to recall the first and last items in a series best, and the middle items worst.”

Clearly from the serial-position effect your first and last slides are by far the most important in your entire pitch deck.

What if you only had two slides to convey your entire message to investors? What would be the message on each slide? The graphic? Should these two slides be the first and last slides in your deck? What I’ve noticed is that most entrepreneurs do not pay enough attention to the very first slide in their deck, which typically just lists the name of the company and often the contact information for the founder (which belongs on the last slide, not the first!)

Clearly you need to spend a lot of time on that first slide. That should include coming up with a tagline that summarizes your product in a short and punchy line of text. Secondly you need an impactful graphic that supports your tagline. Try several variations on this slide until your mentors or advisors feel you have nailed it.

Your last slide needs to neatly summarize your pitch supported by a graphic. You may want to repeat your tagline as well.

When presenting give both your first and last slides more time on screen. Speak to those slides! Work on exactly how to open your presentation, perhaps with a venture origin story and how to close it, with why your product will be hugely successful. Keep in mind when doing a pitch at a contest or demo day when you may be one of many presenters that your last slide may stay up on screen until the next presenter gets to the stage. Take advantage of those few seconds with a killer closing slide.

One final point. As I tell my mentees, most people can only remember three things from a presentation. Due to the serial-position effect; the primacy effect will bias them to remember the message from the first slide, the recency effect will bias them to remember the message from the last slide. What other message will all those intervening slides convey that will be memorable?


Are business plans back?


Screen Shot 2019-04-12 at 10.24.13 AM.pngI was very pleased to see business plans die out, replaced by pitch decks. IMHO no one reads, and even fewer people actually read business plans! By the time these plans were completed they were obsolete. They tended to be more fact than fiction and were usually accompanied by voluminous Excel spreadsheets showing the classical hockey curve of revenue growth.  A giant waste of time for all involved!

But the Business Insider article by This serial founder thinks pitch decks are passé. Here’s what his startup used instead to raise $45 million in new funding argues that pitch decks are so over, replaced by a “pitch memo.” The pitch memo sounds exactly the wordy business plan of yore. But Parker Conrad, who founded three venture-backed startups — SigFigZenefits, and, most recently, Rippling, argues that a pitch memo is far more effective than the typical pitch deck. He clearly understands that pitch decks are meant to be presented, not read and thus must leave out a lot of detail that is provided on the fly by the presenter. So yes, pitch decks rarely standalone, in fact they shouldn’t. As I’ve written previously, founders need two versions of their decks: one to enhance their standup presentation, they other meant for sit down reading by an investor. I encourage founders to start with the highly detailed version, then edit it down for presentation usage.

There are two advantages to the written narrative, one is obvious, it can contain a lot more detail; the second is much less obvious and relies on a deep understanding of how VC firms work, which obviously Parker Conrad possesses. Investment decisions are made at weekly partners meetings – usually on Mondays – where the partners who are seeking an investment by the firm need to convince their colleagues it’s a good investment for the fund. By providing a “pitch memo” the founder can make it very easy for the partner championing their cause to write the memo to their partners for the firm’s investment decision meeting.

Riplings’ pitch memo is included in the article. It’s only 11 pages long and basically covers the same topics as a pitch deck, just in much more depth. In other words it looks just like the “business plans” that were de rigeur in the VC game back when I was raising money in the last century.

But while Parker Conrad has had great success raising money with his pitch memos, I’m not convinced pitch memos will replace pitch decks for two reasons: one, it’s so much easier to get feedback from friends and mentors on a pitch deck than on an 11 page memo, and two, people don’t read! The safer play is just to send a more detailed pitch deck that can be read by your target investor instead of taking the risk that 11 pages of dense text will not only get read, but not get passed around the firm either.

So I’m not convinced by the Business Insider article that founders should take the time to do both a pitch deck and pitch memo. These things change often and trying to keep both of them in sync is not easy – simpler to keep two different version of a deck in sync.

But that doesn’t means founders can skimp on detail – they need to foresee all the questions an investor may ask in the detailed version of the deck they email to them.

To recap my recommendations made previously here’s what you need in your search for capital:

  • A short executive summary of your business plan – one page or less with one eye popping graphic
  • A great subject line for the email you send to prospective investors
  • A body of text for the email that is so compelling that the recipient will open the attached file – which is your one page business plan
  • A pitch deck designed to be used as part of a presentation
  • A very detailed version of the deck to be emailed to prospective investors

With these documents in hand you can contact are large number of investors. But keep in mind the goal is not to give a presentation but to engage an investor in a conversation. Pitch decks and pitch memos are a means to an end, not an end in of themselves.




It’s pitch scrub season!


Every year MIT’s  Venture Mentoring Services selects a number of its ventures to present at Demo Day. A number of us mentors help the presenters by doing a two part pitch scrub for them in preparation for Demo Day. On day one of the pitch scrub they present their decks and we give them feedback, on every slide. They then take a day to revise their decks and present to the same group of mentors again. The changes are always amazing, as they far exceed our expectations. If you can say one thing about MIT affiliated entrepreneurs they learn and learn fast. And they can apply that learning superbly.

But it never hurts to get some tips, especially from Carmine Gallo, who is an expert on presentations and the author of several books on presentations that I highly recommend, including The Presentation Secrets of Steve Jobs.

Lyft’s anticipated IPO roadshow kicked off this week. Carmine extracts five communication strategies from Lyft’s 24 minute presentation.

1. Start with the inspiration behind the product.

Origin stories as they are known, are powerful  ways to open a presentation. They quickly answer the “Why should I be interested in this presentation” question. “Why does this product exist?” Co-founder John Zimmer studied hotel management where he learned about occupancy rates, a key metric in the hotel business.

“Cars are occupied only 5 percent of the time. The other 95 percent of the time they’re just sitting there. If you have a hotel with a 5 percent occupancy rate, you have a failing business.”

It you don’t have a good origin story that’s ok, but you will still need to quickly answer the “why” question. One good way to do this is to present a surprising statistic about your target market or customers. Such as, “Do you know that X% of bicyclists fall at least Y times in their first year of competitive cycling?” While personal stories forge the strongest connections with your audience, stories about your customers can also work well.

2. Frame the opportunity.

While  journalists call Lyft a “ride-hailing company,” the company does not position itself that way. I prefer the term “positioning” to “framing” as it tells the audience what you are and what you are not.  The two co-founders position Lyft as “On demand peer-to-peer ride sharing.”  Your positioning or framing basically answers the question, “What is it that your product does?”

This is also a good time to answer questions about your market opportunity: what’s its size? How fast is it growing? What are its dynamics?

Lyft does a great job of this:

“We have an opportunity ahead of us to deliver the largest shift to society since the invention of the car” and “Lyft addresses one of the largest market opportunities of our lifetime; a shift from car ownership to transportation as a service.”

3. Create simple lists.

People do love lists, as evidenced by the thousands of listicles begging us to click on them. Carmine Gallo notes how Lyft makes use of lists, by creating a list of why Lyft is a good investment. As I advise my mentors, Mr.Gallo advises you to keep your lists short, no longer than three to five points.

4. Focus on key metrics.

Investors need to see the numbers, and that’s never more true than at an IPO Roadshow. Lyft’s Chief Marketing Officer compares Lyft’s market, transportation to three other markets: healthcare, entertainment, and housing. Comparisons between the known and the unknown – your venture – are a powerful way to help the audience visualize the opportunity before them.

5. Make it simple.

This tip may be last but it is not least! At a pitch scrub yesterday with group of research scientists the words “you need to simplify your slides” were said to every presenter! I advise you to limit yourself to one point or message per slide. That can be conveyed in two parts, a text header and an illustrative graphic or even very short (15 – 30 second) video. Even more importantly, your product must be simple to use. If possible you should be able to demonstrate that ease of use and simplicity as part of your presentation.

It’s highly unlikely any readers of this blog will be presenting at an IPO road show any time soon. It usually takes years for a venture to go public. But these tips from Carmine Gallo will benefit any presenter. And do follow the links to watch the video of Lyft’s road show presentation. After all, if a picture is worth a thousand words, a video is worth a thousand pictures!

Sometimes advice columns don’t dish out the best advice!


businessMost of the ventures I mentor plan to raise capital at some point in their venture’s life, if they haven’t already. So being as I have been out of the capital raising game for the better part of a decade, I try to read as much as I can to keep up with current trends in startup investing. Thus I just had to read the article 4 Reasons Why Investors Won’t Invest In Your Business Model, sub-titled Approaching the private equity firms or investors and persuading them in [sic] the most daunting task for businessmen. A typo in the sub-title is not a good leading indicator, but I read on. And it’s repeated in the first paragraph! But this is from Entrepreneur.com, usually a reliable source … So let’s look at their “four reasons.” But first, always look at the author. In this case it’s not a person, it’s “BusinessEx Staff” not a named individual. So credibility goes down a few notches.

1.    Fail To Foresee The Future

I have the feeling this was written by a non-native English speaker, as the title would typically be “Failure to…” or “Failing to…”  First of all private equity firms rarely “scrutinize new entrepreneurs” because they rarely invest in new entrepreneurs. Private equity firms invest in on-going businesses or even buy them outright, with the goal of re-engineering the business and thus being able to sell it or even take it public at a significantly higher value than they paid for it.  Yes, “buy low, sell high.” Remember that! The only way one can know for sure if an entrepreneur can successfully foresee the future is to wait for the future to arrive … which can take years. But I do have to agree with the statement that “… it is vital as to how a business owner executes the plan and mould [sic] an emerging, nascent company out of it.” As Bill Gates has said, “Ideas are cheap, success is 99% execution.”

And I also agree with the statement: “The entrepreneurs, who lose this vision or get diverged by the money factor, fail to build concrete foundations of the business.” While again the English is tortured, the point is that entrepreneurs do need a lodestone to focus their attention. Having no vision or losing site of the vision results in companies thrashing – constantly pivoting. So no one can foresee the future, but you can execute your plan well, or not. And you need to build a plan to achieve your vision.

2.    Improper Cash Flows

Yes, the saying “cash is king in startups” is true. The worse thing an entrepreneur can do is to run out of cash. So being able to present a cash flow statement based on strong assumptions and early performance is indeed important.

3.    The Enormous Size Of C-Suite Executives

I’ve written before about the incredible growth in the size of the C-Suite. We now have Chief Design Officers, Chief Security Officers, Chief People Officers. You name it, there’s a Chief for it. Too many cooks do indeed spoil the dish. I am in violent agree with the message that startups should not have too many C-Suite executives. CEO and CTO should be enough for a raw startup. Having more CXXs is a red flag. Cliches prove true yet again: “Too many chiefs, not enough Indians.”

4.    Inability To Understand The Competitors

Back in the last century investors used to say in all my pitch meetings, “But what if Microsoft decides to copy what you are doing?” That got superseded by “What if Google decides to copy what you are doing?” I used to tell my mentees to ignore the “What if GiantCo enters your market?” question until I saw Instagram rip off the Stories feature from SnapChat, which fueled the growth of Instagram and hobbled SnapChat. So you better be sure that you aren’t hanging the entire fate of your company on one feature that isn’t difficult to clone – because success breeds many cloners, failures none.

Despite the inelegant English like “The business owners should further avoid these mistakes by planning strategized moves to entice funders and investors.” the advice is correct, but the idea the startups are going to be pitching private equity companies is just wrong. Where private equity does come in these days is in later rounds of companies growing rapidly that need a lot of capital, like Uber. The risk is much lower for these late round investors.  Let’s hope you are so successful that private equity comes knocking at your door! Until then execute, manage your cash tightly, keep the number of executives down to the bare minimum, and keep your eye out for competitors. Better yet build your company on a sound, sustainable competitive advantage.

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