Raising funds is something that most startup hates doing – being very difficult (and sometimes next to impossible) as the primary reason. While not easy, getting investors on board is not as hard as you might expect. That is of course if you have taken the time to build the right business plan and have taken the time to sell your story. There are three basic rules that will make a round of funding happen. To begin is there a market (and a problem) that is big enough to invest into? Second question is do you have the right solution to that specific problem? Finally, to you have what it takes to succeed? Investors want to put their money into things that have a shot of succeeding. For any business plan they read or presentation they see, this is basically what they are trying to answer. If you succeed, you will get the funding you need. Missing anything and the road to money will be long and painful… Here is my top 15 slides that I believe need to be in any investor presentations:
Company Overview: make it short; explain where you come from and how you got to this point. What kind of experience do you have? Who are the key people in your team?
Distinctive Competences: Take a few moments to explain what makes you unique. What do you have or do that other companies would not or cannot do? This is extremely important. If you are just a “me too”, what confidence can I have that you are the right horse to bet on.
Market Problems: What are the problems that the industries you are serving have? How painful is that pain for them? Make sure to show that you are addressing a real pain, not just a nice to have.
Market Sizing: How big is that market opportunity? How many customers are there? How much would they be willing to spend? Try to have 3rd party references such as industry research and market analysis to support your hypothesis.
Solution to the problem: What kind of solution is needed to fix this problem? How complex this is? Will it take a few years or a decade in order to get there? This is as much as product agnostic as it needs to be. Focus on the solution rather than what you product does as of today.
Target Customers: The market is large and that is very good but you still need to focus. What will be the types of customers you will be targeting first? Types of customers can define this but having samples of customer names is always good.
Your product line: Ok now it’s time to put things into perspective. What is the solution you have (or plan to have) that matches best the market problems and the needs of the customers?
Product roadmap: You need to show that you know what to do for years to come. How can you demonstrate that what you have in your plans will align with the evolution of your target market?
Go to market strategy: How will you get your customers to notice you? What is your plan to get the meetings you need and the volume of business required to be financially viable? And please be specific. Just saying that you will use SEO, Adwords, Social Media and mailing list does not cut it …
Competitive landscape: Whom are you competing with? This can be a direct competitor to your products and solutions but this can also be the customers themselves (in-house development, status quo). How will you position yourself in order to have a competitive advantage?
Revenue Model: What is the pricing for your solution? Do you have plans for recurring revenues? Will you have a reseller channel? How will you monetize your web service? Sometimes a simple illustration can help visualize the flow of money and how it gets to you…
Financial Projections: How much money will you make in the coming years? How much will it cost you to get to profitability? What is the breakdown of spending per category (R&D, S&M, G&A)? Keep it simple but show numbers that fit within metrics found in your industry. For example, if you nearest competitor is running at 15% profit margins, don’t show margins at 40% (unless you have a major compelling reason that shows why you will be so different).
Exit strategy: This is not as much about selling the business as what will be the triggers that will allow the investors to get a return on their investment in the next foreseeable future.
Funds needed: How much do you need and what will you do with it? There is no problem is asking for more, just make sure that you can demonstrate how the proceeds will be spent. Money invested needs to be used to create value, not to sit in a bank account for 3 years.
Summary: Time to wrap up; this is your last chance to make a lasting first impression. What are the key take away points you want to investor to remember; no matter if they will be investing or not. People talk and you want to make sure you leave them with the right message.
I hope this will give startups looking for funding some insights into the key points that investors are looking for. Of course, I might have made it sound easier than it really is. If you need some help or just want to get some feedback, drop me a line and I would be more than happy to assist you in making a killer presentation that will help you get the funding you need.
Good read Michel. I would add one more point here and that of ‘government regulations’ & ‘industry compliance’ information that may impact your business. This could be a mandatory compliance certification requirement or can a change in government policy impact any of your key value proposition.
good suggestion !