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The
executive walks into the conference room of a top-tier venture capitalist
firm in Silicon Valley. Four polite but skeptical people welcome
him as he enters the room. He's solely focused on securing the B
round of funding for his young company. The past three years have
been especially brutal for his business - from its exhilarating
beginnings in 1999, to its failed market penetration, and now several
rounds of debilitating layoffs, including the original CEO. This
new CEO was recently hired to be the change agent - the pinch hitter
- with the directive to regroup the company and establish stability.
He knows the technology and is confident. He trusts that his instincts
in being able to communicate the value of his product will be enough
to win favor. He stands at the podium, shows his first slide containing
75 words in small type and no pictures, and spends 45 minutes telling
his audience who he is and why his company's technology, four years
in the making, is worthy of their investment. The meeting ends with
no clear next steps. The executive never receives a call back.
What went wrong? Plenty.
A good technology, even coupled with a good CEO bio, is not sufficient
for winning the financial support that your company deserves. The
fact of the matter is that the CEO's presentation and skills as
an orator are equally as important as the product or service he
is selling. The presentation must be direct and to the point, be
compelling by clearly and succinctly illustrating a pain point that
requires immediate attention and resolution, and maintain control
of the agenda for the next 45 minutes. The words used and how they're
said, as well as the visuals used, will have a direct impact on
the speaker's ability to hold the audience's attention and secure
the ever-so-more-important second meeting.
Knowing how to avoid the five most common critical mistakes that
CEOs make in their presentations will greatly improve your ability
to control the agenda and begin meaningful discussions with your
target VCs.
Lesson 1: Forget the "I" word
Most CEOs and founders start their presentation with their own
biography and center their entire presentation on the history of
their company and the relevancy of the management staff. In one
presentation, the CEO spent 20 minutes describing his background
before he told the audience what his company did. This was 20 minutes
of wasted time where the VCs were not sure why they were in the
room listening to this gentlemen.
Your first presentation to VCs is not about you. Nor is it directly
about your technology. It's about the customer problem and pain
that your solution can solve, and why it is relevant to today's
market. Distribute your biography and company history on a single
leave-behind sheet. If the audience wants more information about
your background, they will ask.
Lesson 2: Lead with the customer problem, not the technology
Most startups make the mistake of telling a technology story with
a lot of hype and three-letter acronyms. A good technology will
not sell itself. Instead, the presentation must focus on telling
the story of the business or consumer problem. VCs need to understand
your value proposition within the first 3 slides. Paint a picture
of a "day in the life of the customer" to highlight the
pain your target audience goes through each day. Explain why current
solutions are unsatisfactory for meeting this critical business
need. Then, tell the audience why and how your solution will meet
this need and capture market-share growth faster than any other
competitive solution. This is a compelling story.
Lesson 3: Control the agenda with a strict presentation format
If your presentation is unstructured, it will immediately invite
a myriad of questions that will take you off track. Good presentations
are tightly structured to address the business basics - but not
in too much detail (that will come in the due diligence phase) -
and should never take longer than 45 minutes. This will ensure you
have 15 minutes to drive to specific action items at the end of
the meeting. Forty-five minutes is not a lot of time, so every slide
must count. Top-class VC presentations use no more than 20 slides
and tend to follow this outline:
o The Problem your prospects face, with a keen focus on a target
market
o The Evolution of solutions addressing the problem
o The Criteria for Competitive Advantage relevant to your target
market
o Introduction of Your Company (only now do you introduce your company)
- Corporate Summary
- Market Size & Opportunity
- Product Suite & Roadmap
- Benefits & Competitive Advantages
- Sales Strategy
- Financial Results and Forecasts
- Investment Strategy
o Summary specifying action items you'd like to undertake with the
VC
By controlling the agenda, you are acknowledging the value of the
VCs' time and are ensuring they receive the most important information
you need to communicate.
Lesson 4: End with a call to action
Unfortunately, it is common for presentations to end with a whimper
instead of a bang. Most presenters are hesitant to end with a specific
call to action, erroneously believing that next steps are "obvious."
The best presentations end with a strong, confident close.
Be specific about the next steps. Yes, it's clear you came looking
for funding. Do specify how much you need in this round and how
it will be used. Highlight your goals and expectations. Ask the
VCs what additional information they require to make a decision
to invest in your business. Invite them to talk with a few beta
customers or advisors or see a short demo. By offering these and
other specific next steps, you are showing your interest, drive,
and confidence, and taking a leadership role in driving the agenda
for the second meeting.
Lesson 5: Putting it all together
Remember: the single goal of the first meeting with VCs is to get
to the second meeting. Deliver a presentation that
· is direct and to the point,
· illustrates a pain point that requires immediate attention
and resolution,
· maintains control of the agenda by following a tight structure
and format, and
· ends with specific action items.
Following this winning format will help you communicate clearly
and with confidence, hold the audience's attention, and greatly
improve your chances of securing that vital second meeting.
Good luck!
Mike Gospe (mikeg@kickstartall.com)
is one of the founding members of the KickStart Alliance. The KickStart
Alliance (www.kickstartall.com)
is a team of senior marketing and sales leaders who assist startups
and emerging companies develop and execute a variety of marketing
and sales goals and objectives.
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