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7-Point Pitch to Investors

by Lexi Reese

I’ve had a chance to listen to many pitches by founders asking for investment over the last year. I have also seen some incredible investors and founders in action whom I respect a ton. I am no Investment expert, but below is what I’ve learned about how to structure a great 30 minute zoom pitch if you’re a creator / founder trying to get funding.

First, it’s usually 20 minutes when everyone arrives, takes themselves off mute, does the “whoops - give me a sec to let the dog out” thing. Second, come off mute and ask others to do the same. Third, the time goes fast and if you’re not super intentional about how to use it, it will be a nothing burger (i.e. - nothing happens as a result of the connection). You want to plan it like a great actor/actress. You practice and prepare so much, it feels totally natural to the listener/viewer, as if you have not rehearsed at all. A “run of show” can look something like this and, as always in great show biz, leave them wanting more:

Killer Intro <No more than 5 mins>: Do your research and know who you’re talking to so intro section is short and sweet and captivates attention.

“Hi X & Y person - excited to talk. Have read a lot about you and the firm and learned 1, 2, 3 things that are relevant to our work/me. I’m ___, X background (30 seconds). In next X minutes, I’d love to [state your goal ... share about ourselves and get your pulse on whether you might be interested in partnering or ___?]. I was thinking the structure of the convo could be brief intros, I can walk through our company (who we sell to, what we sell them, how we sell and service them, why we think we’ll win and what winning looks like, a bit about me and our team, and what we are looking for in a partner) so you have a feel for what we do, how we do it, and why we believe we’ll win in our market. I should be able to do that in about 10 minutes. Then we’ll have 5 mins for questions and next steps, but of course pls stop me and ask for clarification on anything as we go. Sound good? ”

7 Point Pitch with 5 mins of question time baked in <15 mins> - practice your answers to below so you can really get through these in 10 mins (not by talking fast, but by getting to the essence quickly). Pause to to take 1 - 2 questions between point 6 and point 7 and then close.

WHO are are you, what’s your vision (picture of the future), mission (how your company makes that future come about) and who you selling to?

You, your brief background that led you to this idea.

Your vision of the future by creating / growing this product or service.

The mission of the company which states how specifically your product/service will bring about that vision.

Your customer - the specific segment you will dominate. Target segments must be (thanks @

Tolithia Kornweibel

⁠

, CRO of Gusto, for teaching me what good segmentation really means)

i) gettable, winnable, keepable, and profitable, meaning viable to achieve company goals.

ii) actionable, meaning comprised of a population with actionable skews or consistent characteristics.

iii) sizable, different from competitors target segments, and durable for ~5 years, to maximize growth potential.

WHAT are you selling to them?

What product/service will you sell them? Explain in a way your 5 year old could understand it and keep it brief. Demo helps. If you have a real competitive edge in your tech - make sure you’re calling that out. Punch this up with a reference story that shows how people use and love your product. Speak to product horizons you see for the service to realize your full vision, but explain that you’re largely talking about <this particular horizon> which you believe, well executed with funding from the proper partner, can help you reach $XM in Y years.

HOW are you selling to and & servicing them?

What routes to market are you taking to find your customers (keeping in mind, in SaaS, you want the cost of acquiring a customer to be < 12 months of whatever revenue you earn from them and the lifetime value of the customer to be at least 3x that of the cost)) What is your approach to provide on-going, timely, customer-loyalty generating service (where costs are low and quality is high; or quality is high and costs are high but you have a revenue model that enables you to pay for the costs) Stories of traction with segments (versus one off blips) and evidence that you know the buying and servicing journey (i.e. HR Tech is sometimes bought by HR leader, but often recommended by HR leader and approved by CEO or CFO depending on the cost .... if you’re pitching that you need money to sell or service something, know deeply the process and players for selling and servicing)

WHY you will win and WHAT are the target metrics of winning?

How will you win against and defend against competitors?

→ Ways to gaining competitive advantage early: (1) Speed. Going faster. (2) Capital. Hire faster, buy market share, and move to set up real defensibilities. (3) Unique Team. Either technical talent or having unique insight into a customer/market. (4) Content. Unique content (e.g., Netflix) (5) Buzz. Makes it easier to fundraise, hire talent, get press and get noticed by customers. (6) Relationships. Personal advantage with a customer can be an advantage for a time against competition (7) Patents. Apply less over time in software and the digital world

→ Ways to defend your advantage over time: (1) Scale (Amazon) So big that it’s hard for anyone else to compete (2) Brand (Apple) Shorthand for the things the customer can expect from your product (3) Embedding (Salesforce) Integrate so tightly with into customers operations that they can’t rip you out (4) Network Effects (Facebook) When another user makes the service more valuable for every other user]

What metrics will you track to know you’re winning. Good ones to highlight:

Revenue

Gross Margin

EBITDA

Cash Burn

Team Size and allocation by function

Market Share over time (with specificity of who you think you’ll be taking share from)

WHO is on on your team / why are they the magic group to take this hill?

Highlight other people’s specific experience or skills related to the big challenges you’re going after.

WHAT are you looking for in a funding partner and what will they get in return for funding you?

State what capital you want, what you will do with it (hire, build product, make an acquisition, other?), what you think the investor will get in return (i.e., a multiple, but also highlight how you fit into their vision and mission as a fund).

Explain what you’re looking for in a partner ($, connections, domain expertise ... all of the above?)

Share where you want this to go (is your ambition to stay independent and go public, do you see that as one option but other options as well?).

PAUSE FOR QUESTIONS.

CLOSE - ask for what you want and clarify next steps

Ask for the business if you’re sure they’re the partner that you want. And leave with clear next steps.

“We’d love to partner with you. We’re looking for $X at a value range of _ to _. We have a plan to deliver __X to you in Y years. Of course predicting the future is hard, but we want to be honest from the get go about what we’re aiming for in hopes that starts us off on the right foot. Do you have any initial reactions / feedback? Can we schedule a time for follow-up”

There are no rows in this table

⁠

Things that don’t help the pitch:

when you don’t have answers to the above or you try to make them up on the fly. if you don’t have a clear answer to any of the above and that’s what you’re using the potential funding to find, just say that.

when you say “I don’t have competitors” ... there are people in the world doing something in the space you’re entering and you’re not there yet or not there yet as much as you’d like to be; so you’re at the very minimum competing for their time and dollars which they’ll give you instead of something / someone else. know that something/someone and be real about what it will take to break into the conversation and get people to pay you a lot and more over time.

filler phrases and metaphors - 1) “we’re the tik tok, the uber ,the stripe” <just be you and if you’re answers above are clear ... let the investor make the right comparison in their head>, 2) “it’s a single pane” <i cannot tell you how many times I have heard we’re a single pane ... it’s one of those expressions that seems to have trended and now does not hold too much meaning>, 3) “we’re just being first principles” <who, i always want to ask, claims to be second principles? ... and isn’t being first principles the same as being a good problem solver?”, 4) “we’re not really looking for investment” (investors invest money, time, talent ... so if you are indeed not looking for money now, but wanting to build a longer term relationship because investing is like marriage and you want to have many first dates ... say that), 5) “let’s open the kimono” (hmmmm .... let’s not. ever.)

Last and most important: go you and your team! For creating something. For putting it out in the world. I hope you are solving some big problems that make life better for others and our planet. We need that kind of innovation. Don’t be discouraged by NOs. If you’re motivated and have great conviction on answers above, use the NOs to sharpen your story, but not get deflated.

If this template helps you, I’m happy to have helped a bit. If you have thoughts on how to make this better, shoot me a note.

GOOD LUCK!

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