Getting from Seed to Series A - Part II

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This is Part II of a four part series.

I field a lot of inquiries from founders wanting advice and assistance with their pitch. An awful amount of preparation and perspiration goes in to creating a presentation that most of the time no one ever gets completely through. Strategy development through PowerPoint iteration is a terrible way to attempt to build a business. Your time would be better spent on developing and testing the business model.

Preparation

  1. Put aside the PowerPoint for now - Although the presentation is somewhat obligatory, you should be able to tell your story without props. Just start with a piece of paper and consider what investors want to know rather than what you want to tell them. If you boil it down to a few key items here is what investors want to know at a minimum:

    1. Target Market Size and Growth - Who is your target market? How big is it and how fast is it growing? What is the problem or opportunity that you are addressing? What are the consequences for the target of not getting it solved? You can’t know enough about your market, so dig in.

    2. Team - Is it a team of outstanding players with the ability to recruit and retain other great team members? What are the roles and responsibilities of key team members? What is the domain knowledge level?

    3. Idea and Novel IP - How good is the problem/solution fit? What is it? Who is it for? How does it solve the problem? Do you have something that is difficult to copy or purchase? Can you protect it? Is it feasible, desirable, and viable? Does the differentiation create competitive advantage?

    4. Capital Intensity - What will it take to build a successful business? How can the capital be staged?

    Answer these questions and weave in a few solid examples and you have the beginnings of the “teaser document” or executive summary. This can be used to generate interest in a meeting.

  2. Still no PowerPoint - It’s time to build the pitch. You have the core elements from item one above, but try to resist the PowerPoint and once again use a pencil and paper. You’ll need to tell your story in 10 - 15 slides and it is important to address the problem/solution fit, the solution/market fit, the solution/competitive and industry fit, and the solution/financial fit. Let’s start with 12 pieces of paper. On each piece write down two key points that help address the topics mentioned above. Don’t show up and throw up. Think carefully about what needs to be conveyed about your business model in order to get a second meeting. Take each piece of paper with the one or two key points on it and on the back jot down some ideas on how to make those points.

    Now you are ready to create the first version. You’ll have to iterate several times until your team and advisors believe that you are telling a concise and compelling story. Keep the slides simple and not too wordy. If you want to spend a little money have someone with design skills dress it up for you.

  3. Bring the Pro Forma - You probably won’t go through it, but have your pro forma financials with you anyway. I like to put them in a binder with four tabs - 1. Assumptions, 2. Likely Case, 3. Best Case, 4. Worst Case. If you get asked a question about your financial needs you’ll have it handy. If not, you’ll still make a good impression when it hits the table with a thump.

  4. Plan for success - If you get past the first meeting, you’ll likely be asked back to either do the same pitch again to a larger group, or to do a more detailed product pitch. So plan ahead and have your product pitch ready to go. Remember that most investors will not sign NDAs. There is always some trepidation about sharing too much about the product. My general rule is to share enough to make it compelling, but so much that you are nervous about the information that you are sharing.

Next post will delve into approach and timing of the Series A.