In the past two years in the Rebel Venture Fund, I’ve been fortunate enough to to see a lot of great pitches. These presentations all had a few things in common. When you’re talking to investors you can make your pitch go a lot smoother by making sure you hit some of these themes in your pitch.
Tell us Your Story
Every entrepreneur has a story about why they started their company and we want to know yours. Was there a problem in your life or was there a loved one had that made you see a solution? What led you to this opportunity that no one else has seen before?
We’re looking for you to paint us the picture of your vision and make us really see it the way you do. Sure, we care about your product, your business plan and the other details of your business; but we’re not just looking to invest in a business. We are looking to invest in YOU. Telling us your story and how you got to where you are today gives us insight into who you are and helps us see why we should do business with you.
While we love to get to know you as a person, we also want to know what makes your company special.
Intellectual Property is great and we love good ideas, but we’re really looking for all the other things you do to stand out among your competitors. It’s not enough to simply say you’re “disruptive”. Show us how you’re disruptive. How do you use the resources you have and the talents on your team to make your company the clear choice for consumers? What unique activities are you doing to acquire and retain customers. Talk about the reactions your customers have had to your product and how you’ve used that information. Tell us how and why consumers are going to choose you over another company in the space.
Your Management Team
Very few entrepreneurs can achieve their vision without gathering a great team around them. We want to learn all about the people that you have surrounded yourself with.
Tell us how you chose these people to be part of this venture. Skills are important when building a team, but we also want to know what intangible qualities each team member brings to the table and how those qualities interact to make your business successful. We’re interested in how your team builds strategic partnerships with other businesses that can help you achieve your goals. We also want to know about the advisors and mentors you’ve brought in to help you and why you’ve selected them. When it comes to looking at your management team, we’re looking to understand what makes you able to pull off your idea better than your competition can.
A lot of entrepreneurs worry about having perfect pro forma financial statements and this sometimes keeps them from focusing on the other aspects of their business while they are putting together their projections. As investors, we do understand that projections will never be perfect. We’re more interested in the assumptions that you used to create your projections and why you believe that you will be able to meet them.
It’s important to make sure that the numbers in your financials make sense and there are no inconsistencies, but we’re really looking at the story that the financials tell about how you manage your company, not at the actual numbers themselves. What do you spend your money on and why? Are you on pace to meet your projected revenue this year? If not, why? Do your variable costs appear to go down with time as you achieve economies of scale or are your costs inconsistent? Having a good handle on your financials gives us confidence that you know where your money comes from and that you are spending it in a way that is going to create growth for your business.
One of the questions any investor will have for you is “How do I make money on this?” We’re all looking for return on our investment. The best way you can help us see that ROI is to talk about your exit strategy.
You don’t need to have one clear answer, but taking a thorough look at those exit options will give us confidence that you have our interests in mind. Don’t assume that an IPO is the only option for your company. Talk about who might acquire your company and when that might happen based on other exits in your industry. If there are any other possibilities for how you might get a successful exit, tell us all about them. Your exit strategy will be a key component in how we consider the valuation of your company and the investment terms. Show us how your exit strategy will get us that big ROI we are looking for.
The most important thing to remember when you’re pitching to investors is that we’re looking for you to show us why we should be confident that you are going to use our investment wisely. We wouldn’t be talking with you if we weren’t interested your idea, but there is much more to your business. We want to know that you’re going to use the money that we and other investors provide to give us a return on our investment. Your product is important but we care just as much, if not more, about your competitive advantage, your team and your decision-making processes. If you approach investors from the perspective that we invest in entrepreneurs and people instead of ideas and products, you will have no trouble doing a great pitch!
About the Author
Jason LeDuc is an MBA student at University of Nevada Las Vegas and a Senior Associate at Rebel Venture Fund. Jason served proudly for two decades as an officer in the United States Air Force and retired at the rank of Lieutenant Colonel in August 2015. In his most recent assignment as an instructor at the Air War College Distance Learning Program he served as an academic instructor to 7000+ students from all services to provide them the education needed to accept strategic leadership positions as senior officers.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.