Key takeaways from a LOVC webinar where we offered our perspective on what makes a killer pitch.
Investors are trying to answer three key questions:
Can we envision a >10x outcome for our investment during the life of our fund?
Will working together for the next five to ten years (or longer) be a mutually enjoyable experience?
Are our resources, experiences, and abilities a good fit for your business?
In order to answer these questions, you will want to introduce your team, problem, solution, traction, market and financials succinctly.
Why does your business exist?
Develop a single, declarative statement of purpose Mission statement format is good as well.
If it’s noteworthy, include a personal connection to the purpose that answers the question: “What motivated you to start the business?”
Introduce your team:
Discuss your team early in the presentation.
Include all founders and the people leading sales, operations, technology and finance; leave advisors off this slide (put them in the appendix). How did you come together? How do you work together?
Why are you the right people to do this?
Where are you located? Is the team remote, on site, or some hybrid model?
We like to meet and hear from multiple people, if possible.
The Problem
Describe the pain of your customer? How is the pain addressed today? What are the shortcomings in existing solutions?
You may have heard that from an investor’s perspective, “pain-killers are better than vitamins.”
An interesting approach is to introduce a real-world use case which you can carry through the pitch (to the Solution, GTM, and pricing) discussions.
Your Solution
Discuss how you discovered the solution.
Why was this non-obvious? How is it novel? Describe the value proposition.
Be clear about your advantage aka, underlying magic, aka secret sauce.
Traction: Now and in the Future
Discuss why you believe the market is receptive now. Illustrate trends in your key indicators (KPIs) and Unit Economics.
Discuss the current state of market dynamics (e.g., do you enjoy first- mover advantage?), segue to a discussion of durability and defensibility…
Market Dimensions and Competition
Since TAM is a zero-sum concept, it’s useful to see it on the same slide as your competitive analysis.
Assuming you know what your customers will pay for your product, it is far better to do a bottom-up TAM calculation than to use gross industry spending statistics.
The 2x2 competitive matrix is useful when the axes are meaningful from the customer viewpoint and do not appear overly contrived.
Specifically, discuss your plan to win market share.
Business Model
How will you make money? How much will customers pay (ACV)? How do you know this?
This is a good time to discuss your go-to-market (GTM) thesis, strategy and experiences to date.
Financials
High-level is fine here (Revenue, COGS, Gross Margin, Opex, EBITDA (cash burn) We are looking for signs of product-market fit, revenue traction and acceleration
We are interested in your assumptions that drive growth and in learning how you think about it.
We also note capital efficiency. Even at an early stage, gross margin is important to understand.
You’ll want to demonstrate an understanding of how to invest in rapid growth while managing Opex. Show at least the previous six months and forecast the next twelve.
General Guideposts
Always use your deck.
The bad pitches we’ve seen share the common mistake or rambling with the structure of a deck.
Express your passion and excitement in ten slides, or fewer.
A comprehensive appendix is useful, but keep the main section of the deck succinct.
Make it simple, informative, uncluttered, and free of jargon.
Avoid in depth technical discussion in your pitch deck. Focus on the pain point you’re solving, how you’ll solve it, how you’ll reach customers.
Do not embellish, especially with regard to revenue traction and addressable market.
An authentic and factual tone is a key to building trust; it’s best when presenters respond to questions in a direct manner.