Monday, January 13, 2014

VC Presentation Tips

VC Presentation Tips

I have been spending quite a bit of time the last few days working with a young, strong engineering team thinking about launching a new business. One of the things I have had to help them with is how to communicate with prospective investors. After the conversations we have had the last few days, I thought it might be useful for others if I shared what is an effective way to present to me and the other venture capitalists.

3/6/10/20/30 Rule of Powerpoint

Your presentation should have ten slides that covers ten different topics at most, last no more than twenty minutes, and contain no font smaller than thirty point. Each slide should have no more than 3 bullet points and each bullet point should be no more than 6 words.

Note: These are rules of thumb, so do not worry about slight deviations from them.

Ten Topics to Cover in Presentation

1. What is the Problem? How big is the market and how fast is it growing?

2. What is your Solution? Why will people buy your solution?

3. What is your business model? What are the revenue streams, revenue drivers, and cost drivers? What is your pricing? What are your margins/CAPEX/OPEX/CAC (customer acquisition cost)?

4. What is your underlying magic or secret sauce? Do you have any technology advantage (IP)? Are those things sustainable?

5. Marketing and Sales. How will people buy your product (direct, indirect)?

6. Who is your competition? How do you compare/contrast against them? Who are potential competitiors? What is your sustainable competitive advantage?

7. Team and their ability to deliver. Why is your team better than the next company I meet pursuing the same opportunity? Who is missing from the team? How do you plan to build a world-class team? How can you attract world-class talent?

8. Projections and Milestones

9. How much money do you need, how are you going to spend that money, and how can I/ the VC control that? When will I get paid back, how much will I get back? Other pertinent financials for a first meeting (other critical financial metrics you believe I/the VC should be aware of)?

10. Risks and Risk Mitigation. Make sure you cover what you are going to do if you get less money than you anticipate, things take longer than you anticipate, and the markets turn dramatically down sometime in the next 3 years for a period of at least 1 year.

Success Factors

If you can do the following things, your chance of success increases greatly

1. Wow and Surprise us. Show us that you are going to do something bold or crazy but at the same time demonstrate that you have execution skills and smarts to actually pull it off.

2. Do not tell us your idea is unique. 99% of the time we have heard that someone is already doing it. In my opinion, being unique actually does not matter much because success comes down to execution and agility not ideas.

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