Tip #21: Format your tables

Tip 21: Format tables and charts. Following from last time, almost always decks look pretty good until we reach a data table. Near the beginning, a market growth chart copy/pasted from a Navigant or IBIS research report; or near the end when you are trying to present financial projections.

Tables and charts in slides invariably look terrible – both in themselves and because they don’t match the formatting of the rest of the slides.

You can see the obvious reason these look bad, with the usual problems about distractions: does anything look more year 2000 than a black-and-white Times New Roman excel table, complete with gridlines, dropped onto a slide?

But there are more subtle and powerful complaints than esthetics and distractions.

First, this presenter is comfortable pulling a table direct from a research report. Have they really understood it, analyzed it, compared it to other data – or just plonked in a chart they think we want to see? Even if you have worked on it and really understand your market, by dumping a chart you found in someone else’s pdf into your deck loses your credibility.

And second, if you dump in a poorly done excel table, you are proving that numbers are not core to you. Financials are an afterthought in your business, housed in a different set of programs that a to-be-hired-one-day-CFO will deal with later. For us, numbers are critical: if your most important number (cash in the bank) reaches zero, we lose our investment. We need to know this is as critical to you as it is to us, and that you are well equipped to work on it.

This is a pothole that is easy to avoid. Why? Well, firstly there is almost never a need to include a table! Avoid them wherever you possibly can. And secondly, formatting tables in excel to look good – and to look the same as in powerpoint – is not difficult. It takes just a few minutes of effort to recolor fonts, use your house font, make the font size correct, remove gridlines, etc. These are minutes well spent.

Tip #20: Format consistency

Tip 20: Format consistency. Next we have a series of tips on what slides should look like. Starting with formatting.

Your slides should be a consistent whole – your color scheme throughout, common font, precise and uniform alignment between slides, unvarying capitalization (or not), altogether a coherent “feel” to the slides.

This may sound minor, and it is. But audiences cannot help but be distracted by a randomly colored font or a word that’s bigger than the surrounding words. Even small things like slide titles being uniquely indented on slide 8 hit the brain when it should be focused on the information you’re providing. People don’t decide to invest because of perfect formatting, but they don't get distracted by nice formatting so are more likely to be engaging with the content.

It also demonstrates professionalism and respect to deliver high quality product to us. If you can’t do that now, when you are asking us for $500,000 of risky investment capital, why would we think you will do in future – when you are trying to make a $2,000 / year Saas subscription sale, or, even less likely, next year when we are chasing you for your overdue quarterly financial information?

Slides don’t need to be works of art. But they do need to be high quality, professional, and consistent.

Tip #19: Easy file format

Tip 19: File format. In general, standalone desktop files, ideally pdfs, are the way to go on the pitch and on all diligence-related documents. Over 50% of operating systems are still Windows-based. Why send me a file there is a good chance I can’t open easily?

Online-only decks are also not really welcome. They’re not easily downloaded, shared internally within our team and screening angels, annotated, printed etc - and hopeless when the internet connection is lost (tip 16).

Prezi (the execuable version not the online) is borderline OK – if you’ve ironed out all the potential snafus ahead of time and you’re confident the 2010 laptop running window 7 can handle the 80MB file. Again why take that risk?

And lastly again remember the context from tip 3. Clicking my way through countless animations or moving slides in a presentation I’m reading alone is annoying and distracting.

Tip #18: Use animations carefully

Tip 18: Use animations carefully. Use animations judiciously and practice them.

Used effectively, animations are a useful tool for helping your audience stay in the current of your narrative flow, keeping them focused on the key point you are making.

But they are hard to use effectively. First again is tech (tip #2 about sending in pdfs – animations don’t work in pdfs) – and then “clickers” never work as smoothly as people like.

Assuming the tech is OK, you have to know exactly when to click the next animation. You really don’t want to be talking about a key message and then realize the relevant bullet isn’t on the screen yet. If you’ve practiced enough, it can be very slick – but it’s higher risk.

And it probably goes without saying that any “quirky” animation is a distraction and hurts credibility, but just in case: DON’T USE “FUNNY” ANIMATIONS.

Tip #17: Avoid embedded videos

Tip 17: Avoid embedded videos. Thinking you can avoid internet connectivity problems (last tip) by embedding the video in the presentation file? Good luck with that. Almost definitely, the video won’t play, the sound won’t be audible, and the 100MB file won’t open.

We should amend the previous tip: not being able to open the slide deck is worse than watching a demo video buffering.

Tip #16: Avoid reliance on internet connectivity

Tip 16: Avoid reliance on internet connectivity. Going along with tips 14 and 15, don’t make your pitch reliant on having internet connectivity – by using a live demo or a youtube video.

Very often “public” pitch locations (our groups meet anywhere from business offices to chambers of commerce to bars), don’t have infallible internet connectivity.

This is usually not a problem. But when the internet goes down one minute into your demo video, nothing is worse than sitting watching a demo video buffering. You’ll be thrown and the audience will see your credibility slipping away. Why leave your "one shot" at raising money from these individuals in the hands of an IT person who has already left, Comcast, or fate?

Tip #15: No demo videos

Tip 15: No demo videos. Almost always, doing a "demo video" is a mistake.

First, potential investors have come to hear you and ask questions, not watch a youtube video, listen to the voice-over guy, or sequence of testimonials.

Second, almost every time a 3-minute demo video is used it’s the generic sales video. Helpful for potential customers so they can sign up online, but this is a different audience with a different goal - and a generic demo is not necessarily an effective way to reach the goal.

Thirdly, videos present problems of logistics. If they work, which they often don't as synching videos with audio that people can hear in a conference room is no easy task, demo videos lose momentum and use up time switching between presenters. Then another 15 seconds are wasted moving slides back in and getting re-calibrated.

And then finally, to compound a sub-optimal start, the entrepreneur will then almost always launch into their “Intro to Us and Our Product” slide – duplicating the info we already have.

So now we are ~5 minutes into the pitch, and still on slide 1. This is not going to end on time.

Tip #14: Demos must work

Tip 14: Demos. If you can, provide a demo of the product or service. However, only demo if you are completely certain it will work. A failed demo means no investment – even if it’s not your fault.

If you are showing off your product, it mustn't fall apart as it's passed around the audience. If it's a SaaS tool, you mustn't get an error message (or an interminable loading screen) when presenting it.

Don't make all the pitch dependent on the demo. Bearing in mind tip 13, there will be technical difficulties somewhere. Make sure that if the demo does go wrong the rest of the pitch makes sense "standalone."

Screen shots of the key activities are often an effective trade-off between functionality and reliability. Another approach is to give people the simple website link for a demo so they can see the product ahead of time, or follow along on their phones while you’re talking – though be careful they don’t get distracted.

Perfecting Your Pitch - The Tips

So far we’ve outlined what we won’t fund and probably won’t fund, given you in-person “how to pitch” sessions, and outlined our five key philosophies for angel investment pitching – “Pitching is a Process”, “Do your Homework”, “Maintain Credibility”, “Keep it Simple”, and “Practice, Practice, Practice”.

So far, so obvious, right? Maybe, but strangely so rarely seen in companies seeking funding. Nonetheless, some companies do deliver on at least some of these principles – and almost all of the 3% of companies that we fund deliver on most of them.

So over 2017 we’ll be sharing some shorter tips on how to beat your competition by pitching more effectively.

Of course, there is no single “right way” to pitch. Some of our tips disagree with others (including some other early-stage investors) and very likely disagree with how you think you should present it. That’s fine: take what you find useful, ignore the rest, and give us your best shot. Proof comes when you get funded. Or not.

We’ve tried to arrange these tips thematically, starting with the format, high-level content, and delivery, and ending in specific tips on detailed content for each subject area and slide. Still, we jump around a bit: if you want a logical and coherent list, better come to a workshop or better still get the guide.

Philosophy #5: Practice, Practice, Practice

You would think this is obvious and everyone embarking on a fundraising process would be well prepared and practiced. But you would be wrong.

If the first time you’re delivering your slides to a live audience is at our funding cycle meeting, we guarantee you won’t get funded by us. If you confess “I’ve never had that question before” (particularly if it’s an elementary question), you’re toast. If you can’t deliver your pitch without your slide deck as a crutch, you won’t beat the next presenter – who can.

Practice, practice, practice!

Philosophy #4: Keep it Simple

There is a lot to learn about a business in a 30 minute pitch session. Hundreds of potential subjects to address, areas to consider, thoughts to encourage (or avoid), questions to answer. How can you hope to cover everything a potential investor “needs” to know?

You can’t. But fortunately you don't need to. All you have to do at each stage in the investment process is get to the next stage of the process. Provide just enough to make that happen.

How? Always keep things as simple as possible.

Generalist investors can’t “learn” your industry and its problems in two minutes, understand all 15 of your innovative product design features in one minute, or digest your five previous management positions in thirty seconds.

The best we can do is learn you have found a big and genuine problem, you have a solution, and you can build a company worth $25 million in five years by providing that solution. That's enough for us to move you into due diligence.

Investors can’t be expected to evaluate these key foundations while we are trying to understand your jargon, read 10,000 words of text on your slides, and ask you questions all at the same time. You have to make what you are doing easy enough for anyone to understand – immediately.

Philosophy #4: in everything you present to investors, keep it simple.

Philosophy #3: Maintain Credibility

There are lots of discussions about why people invest in early stage companies. Fear of missing out? Emotional gut reaction? Sensible diversified portfolio? For fun?

All of those discussions are interesting, but perhaps more important is why people don’t invest: because they don’t believe you can do what you’re proposing. Somewhere along the pitching process you have lost credibility.

People evaluating your early-stage business have very little material to evaluate. We don't have five years of historical financials, years of customer behavior data, or often much scientific data proving that your product even works. Minor things can therefore take on disproportionate importance.

Has this individual been 100% truthful and clear? Did they charge a $6 Starbucks to the startup or did they have a $2 filter coffee on their personal card? Are they shady, eccentric, scatterbrained, organized, thoughtful, considered?

Some of these first impressions might be entirely unfair, but they happen. Your defense is to present a credible picture in everything you do when fundraising – and, in fact, any time, because we will learn what you are like when you are not just in “pitching” mode.

Underlying philosophy #3: maintain credibility throughout your fundraising process.

Philosophy #2: Do Your Homework

No authors write well without knowing their audience; no salespeople sell well without knowing their customers; no companies pitch well without knowing their potential funders. You can only know your funders by doing your homework.

What is the right kind of investor for my business? Where are those investors? Do I fit VentureSouth’s investment criteria, or Wells Fargo’s funding criteria, or SCORE’s advising criteria?

What kind of return are they seeking, and when, and who am I competing against for their attention? How can I differentiate myself from the other companies raising money?

What kind of deal should I offer? How do I prove my traction effectively? How painful is this process going to be? What can go wrong?

You need to have good answers to these questions before you even approach a funding source. Connecting then learning is not the way to go. “Hi, I’m not sure if I’m a good fit but I was wondering if you would fund my company” is a certain way to get to "you're not a good fit."

But that’s why you’re reading these posts, right? And why you’ve already read this page.

Philosophy #1: Pitching is a Process

We start out with five “philosophies” of angel investment pitching – meta-guidance that underlies many of the future tips.

1)      Pitching is a process.

The “pitch” is one part of raising capital. It isn’t the first or last step. The entire “pitching process” is deliberately a series of hurdles and challenges to test different business characteristics and presenter qualities – understandability, sell-ability, fundability, credibility, resilience. You need to understand the whole process in order to be successful in any given part.

This diagram summarizes the steps of our investment process. Pitching is important, but note how few companies actually make it to the pitch: the chances are the pitch has failed even before you reach the "Pitch Deck" (stage 5). You need to be a high quality candidate at every stage of the process in order to get funded - starting with the opening email!

 
 

Perfecting Your Pitch - Introduction

Every few weeks, we run an educational workshop to share the insights we have gained from seeing many hundreds of companies pitch to angel investors. The most recent, in Greenville last month, was a packed house of entrepreneurs looking for advice.

These events are popular. We’re going to try to bring this workshop to all the locations with a VentureSouth angel membership group, but it is hard to do that while running angel groups. We also pack a lot of material into 90 minutes – as you will see if you attend. (Subscribe to our newsletter to hear details of future events.)

So we have decided to add this repository of tips and suggestions. This post kicks off a regular feature where we share a quick idea on how to improve your pitch, or how to avoid a pothole along the way.

Some of these suggestions are specific to angel groups, but most apply to any form of capital raising. Our goal is at least one a week until all our candidate companies have the "perfect pitch."

Why are we qualified to do this? We're not really. We are not a general “pitch practice” company, sales training consultancy, or public speaking trainer. But over the course of the nearly 2,000 business plans we have reviewed and nearly 200 companies we have seen pitch to our groups, we have learned what works in our groups – and what doesn't.

We hope you find them useful, and welcome your feedback, debate, criticism, and suggestions for improvement.