Making a better presentation to investors

Every so often I have the opportunity to something special, and while there was no monetary compensation, having been chosen as a coach for this year’s Central Coast Venture Forum in Santa Barbara was very rewarding. In case you aren’t familiar with the Central Coast Venture Forum, this is an event that takes place every year in Santa Barbara where entrepreneurs are invited to present their business plans to an audience of potential investors. Each presenting company is given ten minutes and a maximum of 14 PowerPoint slides to make a pitch, and with any luck their presentation may lead to a financing.

As a coach, I had the honor of working with the presenting companies to help them refine their pitch for maximum effectiveness. I was part of a great team of coaches, and we really helped the entrepreneurs a great deal. The experience also reminded me of many of the typical entrepreneurial mistakes that are made when preparing a business plan or making initial presentations to investors:

Always open by making it clear exactly what your business is.
Avoid long flowery introductions. Avoid talking about the market. Avoid talking about the value proposition until after you’ve established the essence of your business. If you don’t do this, then you don’t create a context in which the rest of your presentation can be understood and you will lose your audience. Your opening should always be something on the order of “Our company is General Motors, and we manufacture cars and trucks.” If you can’t make it that simple, then you probably don’t have viable business model.

Always put your best foot forward.
Whatever your strength is, whether it be experienced management, a dynamite technology, a proven track record for meeting milestones or great solution to a serious problem, whatever that primary strength is should be the first thing you talk about after you’ve established the nature of your business.

Focus on the pain and the painkiller.
Talk about what problem your company solves and how much it reduces costs or increases revenues for your customers. No investor is going to believe what you say about the size of your market or your revenue forecasts, but if they can understand the problem, the solution and the benefit to your customer, then there is a great chance you’ll get their attention.

Don’t leave your credibility on the table.
Be realistic with your projections and what you can accomplish. It makes no sense to forecast revenues growing from zero to $300 million in 3 years. Even if you can justify the market, and even if you believe that you can grow that fast, don’t put it in your business plan or PowerPoint presentation. No one will believe you, and you’ll only appear naive. No one ever built a successful vehicle without a set of brakes, and the same applies to a business. It takes time and patience and common sense to build a business and to put in place the infrastructure to support its growth. You can’t add bodies at a breakneck pace and expect them to come together as an effective organization. If you try to go too fast, you risk early crash and burn, and your investors understand that.

Never say, “We have no competition.”
This is the kiss of death. Every business has competition, and if you are worth investing in, then you will know where that competition is, and you will plan to have an appropriate response to it.

Make your presentation concise, only highlighting the key compelling ingredients of your business.
Remember, the purpose of the presentation or business plan is to get a face-to-face meeting with the investor where you will have an opportunity to go into much greater detail.

Talk to your slides.
Make your PowerPoint slides brief, concise and bulleted AND read them verbatim before filling in the holes with your own narrative. Your audience will be both watching and listening at the same time. If you are saying something that is different than what they are seeing, or if you are not going in the order of the slide, then you will lose them as they try to figure out where on the slide you are. You want them listening to you, not searching the slide aimlessly for consistency with your words.

© Copyright 2001 by Eli Eisenberg d/b/a Straight Line Management

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