Tip #46: No long resumes

Tip 46: Long resumes. The team slide is not the place to provide your resume in a long prose paragraph in small text. Delete that and start again.

Instead include only 2-3 key bullets summarizing your roles and experience, and emphasize their relevance to your ability to execute this plan.

This may seem obvious in the light of “Keep it Simple” and “delete unnecessary words”. Yet a substantial minority of team slides are pictures above blocks of prose. We can’t digest two dense paragraphs of biography, and so narratives lose their steam entirely.

Another chunk of team slides go too far the other way, with just pictures, names, and titles. This can work if you then provide compelling oral testimony about the team, but it’s higher risk. Why not just have some brief bullets to help us remember your team’s qualifications?

Tip #45: Team Slide Content

Tip 45: Team slide content. If you agree with the last tip, next consider the content for your team slide that best helps you move your narrative forward and clinch your argument. Only include what is relevant to achieving that.

We aren't swayed by your mid-level management role, your board position at the zoo, your GPA, or your kids. We do care whether you have the capability to deliver on your plan. Present what you need for proving that.

(For “full disclosure,” you may want to consider adding your other roles, but in smaller font at the bottom and don’t speak to them.)

Overall, team slides are hard – difficult to fit into your narrative without providing pointless or distracting information. The good (?) news is that we learn more about your ability to execute by listening to your pitch than by reading your team slide.

Tip #44: Team Slide

Tip 44: Team slide location. We stress that the quality of the management team is the primary factor determining whether or not we invest, integral to our due diligence process. However, we recommend your “team slide” does not come first in your pitch.

If you put it up front, it’s an “introductory facts” slide – a hello and potted bios. This can be interesting enough, but if it is not integral into your argument of why we should invest it’s a missed opportunity.

Put it in the middle of your deck, to use to “clinch your argument” – “we are the team that can deliver the plan we have presented because we’ve built three similar companies in the last ten years and sold them for $100 million…”



Perfecting Your Pitch - Tip Update

Our first 43 tips have been focused on the how and who of perfect pitches. This might seem excessive, but remember two things.

First, 86% of our incoming deal flow never even gets to pitch - making homework and preparation the most important tips we have.

Second, a large amount of the information you impart comes through non-verbal communication. It doesn’t really matter if it’s 50% or 90+%; it is a lot. That's why delivery and "presentation" came next.

That leaves "content" at 10-40% of 14%, which is why it's taken a while to get here. But of course the what (what should be included in the pitch and how you might think about tackling particular questions) is important. So here is the next cohort of tips. Put these in the context of our recommended allotted 10 slides.

Tip #43: The Appendix

Tip 43: The Appendix. 10-12 slides is enough to cover everything we need to know. One popular fudge around tip 1 is “stick that in an appendix”.

You can do this if you want, and indeed for the written version it might be a good approach. For the oral delivery, though, be warned that this scenario is all too common.

Questioner: “Can you give me more detail on your distribution channels?”

Presenter: flicking through five slides, then back one, um where is this slide, ah here we are.

Audience: trying to ignore a whole bunch of images flying by, then trying to read a new slide – which is probably weaker because it’s in the appendix…

Presenter: “As you can see on this slide, we have [a long but poorly fleshed out list of distribution channels that didn’t really fit my narrative and open up lots more questions around a subject that I didn’t really think was important enough to include in my 10 key slides].

Audience: trying to process the new data ignores the answer and now needs dragging back to the core message.

This is likely counterproductive. Better would simply be to answer the question orally and simply. Our two key distribution channels are [x] and [y].

Tip #42: "That's a great question"

Tip 42: “That’s a great question.”

The single most common response to a question asked by an angel investor in a group meeting is “That’s a great question.”

It isn’t a terrible way to start: a bit of flattery is nice and it gives you a second or two to marshal your thoughts to reply. Nonetheless, tip 42 is not saying it, for a couple of reasons.

First, it takes time, and every second counts. Second, why lie? (Chances are, it really wasn’t a great question.) Third, why was her question great and mine wasn’t?

But most importantly remember that most companies don’t get funded. Why say exactly the same thing as the last person that pitched?

If it really really is a great question, then say it and briefly explain why it’s such a great question. But most questions you will get aren’t going to be great, so you’re better off just answering the question and moving onto the next one.

For a similar take on avoiding "negative space" in Q&A, have a read of David Cohen.

Tip #41: Handle critical questions smoothly

Tip 41: Handling critical questions. VentureSouth isn’t shark tank, but you should expect skepticism and critical questions. Sometimes these questions are asked deliberately provocatively to see if you have a thin skin or diplomatic aplomb. If you are confident you are correct, say so (respectfully) – ideally with proving evidence.

Questioner: Email marketing is just not going to work on this. Whoever is advising you spend more on email marketing needs to be fired.

Presenter: Well, email marketing is not the only sales strategy, and we are planning to experiment with other methods that might be effective too. We’d welcome your input on those. However, our data so far from our initial customers suggests our email marketing is already working to build initial users – our last campaign showed a 10% open rate, a 2% conversion rate, and a 4x ROI. [Then selects next questioner.]

Good save.

Tip #40: Don't dodge

Tip 40: The dodge. Hopefully because of tip 36 this won’t happen, but if you get a question you really don’t know how to answer then SAY SO.

Waffling or dodging is the worst approach – credibility is eliminated immediately if you do that.

Saying just “I don’t know that” is better, though still not perhaps the best response.

Saying “I don’t know but I will find out by [this method]” is the best “save” you can hope for here. (And if you obviously write yourself a note to do it you can reinforce how well organized and diligent you are!)

Tip #39: Avoid the re-ask

Tip 39: Avoid the re-ask. You gave a concise and convincing answer to a question in Q&A. But then you asked the interrogator, “Does that answer your question?” Tip: don’t do that.

If your answer did address the question, asking and getting a “yes” simply wastes a couple more seconds (best case).

More likely (middle case), your question came to try to rescue an enjoyable ramble along a tangent that had eventually petered out – and asking merely forces the questioner to highlight to everyone that your answer was ineffective.

Worst case of all is that asking prompts the questioner to say something long-winded and irrelevant and burn up another minute of your pitching time. In my opinion, it’s better just to answer then move on. If the questioner really isn’t satisfied, they can ask a follow-up.

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.