It is much easier to talk with an investor if he understands what your company is doing. As the founder of the company, you will have to talk about it thousands of times. To be effective, your presentation must be clear and concise.

In this article, I have reduced the process of creating a presentation to the answers to seven questions. If you can answer briefly all seven, then do a good job of presenting the company.

Seven questions

1. What are you doing?

Start with your company name and what it does. For example: "Socialcam is a mobile application that makes it easy to make a video and share it with friends and family." No need to pose a problem, just go to the point.

Many people spend enormous efforts trying to make an idea seem impressive. Normally, when it looks simple. In fact, it is even preferable. You are required to explain what you are doing in as simple a language as possible. The material must be adapted accordingly. Your brief idea for the investor should be the same as the contents of the baby food packaging for the child.
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If it is difficult for you to describe your product in simple terms, then a description of user actions can be effective. For example: “Hello, we represent Google. We want to make a website with a window in it. The user will be able to print any question in this window, and we will show sites that answer this question. ”

A description of communication with the user and his actions will help eliminate this kind of explanation: “Hello, we are introducing Google. We organize global information by indexing the network. ” After such an explanation, I, as an investor, are lost to you.

When answering this question, your goal should not be that I understand your entire business, but, rather, to interest me and encourage me to ask further questions.

2. How big is the market?

There are two ways to estimate the size of the market. If you are entering an already existing area (such as small business loans), then you can explore it. If you are creating a new product or area (like, for example, Slack), then you can estimate the number of customers that might be interested in your product, as well as the possible fee for it.

For example: Bellabeat launches activity trackers for women. There are X women in the United States aged 14 to 45 years. The lifetime of our activity tracker is two years. Thus, the ability to expand the market is limited to the value of Y products.

To assess the size of the market and your possible share on it, there are two methods: descending and ascending. With a downward approach, you determine the full size of the market and assess your possible participation in it. With an upward approach, you see where similar products are sold, what is the volume of sales and what percentage of this volume you could take on. I prefer to use the bottom-up method, which helps to avoid the general error of the downward approach - insufficient specification of the client. In the example above, this could mean that all women are included in the market volume, regardless of age or nationality.

3. How fast are you working?

As an investor, I try to understand how fast you work. What have you done and how long have you been working on it?

I want to feel inspired by how much you have done during the period of time you worked on the product. This applies both to a company that exists for only one week, and to a company that has been active for decades.

I am also inclined to evaluate product and customer development first, and other things, such as fundraising or business development activities, play a secondary role for me.

4. What is your unique approach?

It looks like the question “What problem do you solve?”, But the bar is still higher. I would like to hear from you that you know about this issue that others do not know. Such knowledge is usually the result of extensive communication with customers, in-depth analysis of existing products on the market, and often personal experience.

For example: Gmail. A unique approach was that the mailbox was considered as a personal database for communication and documentation. Would the user wish to delete anything in their personal database? Gmail has given people plenty of space so that they will never need to delete what they have accumulated while communicating. The approach here is not that people receive email. She already existed. And not in the fact that people needed better mail. This is too vague. The unique approach is specific and has a simple language.

Between your market and your unique approach, you have two opportunities to teach me something. The unique approach of a startup often gives me more in understanding the essence than explaining the company's affairs.

It is important to mention that enthusiasm does not help here. If your approach is unimportant, then his assertive presentation weakens, rather than improves, your position. For example: "Bro, I surely know, e-mail is now fucking bad."

5. Your business model?

There are two types of startups: those who know how they will make money, and those who do not yet know it. By and large, if you are in the second category, then you are going to make money either by rolling up, after reaching a sufficient size, for advertising, or by copying the prevailing business model in your field of activity. A small number of companies in the second category offer new business models, the meaning of which is determined by the product - how much it changes the market. A freemium (shareware product) is a good example here.

One mistake I often made on Justin.tv was the suggestion of a set of business models (virtual goods, hidden advertising, chat advertising, contests, etc.). I was embarrassed to say that Justin.tv brings advertising revenue, whereas it was clear that this was the only answer. Use a simple business model.

6. Who is on your team?

As an investor, I am interested in a few moments: how many founders? Is there a technical co-founder? How long have they known each other? Are any of them busy full time? How is the share capital distributed among the founders (I hope, in equal shares or close to it)?

If there are any qualities that are directly related to the subject under discussion, then I would also like to get acquainted with them. For example: you create a rocket production company and were once a rocket specialist at SpaceX. In principle, if you are focusing on a rather complex or regulated area, then it is important to have the experience to solve these problems expediently.

It is not necessary to remember your grade point average in school or the fact that you somehow worked in Google.

7. What do you want?

Do not hesitate to ask. If you need an investment from me, then ask. If you have questions - ask. For clarity, “What do you think?” Is a bad question. “Is my idea a good one?” Is another bad question.

Help me help you. I want to help you.

Work on your questions

If you have the answer to each of the seven questions, make the answers as clear as possible. To do this, you must eliminate the jargon, acronyms, marketing slang and any ambiguous words, such as, for example, "platform". In principle, let the answer look simpler than it should be, in your opinion.

A trick you can try, I call the “test email”. Explain in two sentences what your startup is doing and send this note to some clever friend. Ask him to send his explanation, but written in other words. If friends at the same time ask some questions on the merits, then your presentation must be reworked. It is important to do this by e-mail in order to exclude explanations that could be in direct communication.

This is what we do during the YC cycle and what most people are unaware of - we help companies with literally two-sentence presentations. The answer to the question: "What are you doing?". We work with it all working day during the whole cycle. That answer is the core of a good pitch. When this question is closed, writing a good presentation becomes easy.

When editing your answers, you should definitely remember that they should not be “cool”. They should be clear and understandable. Do not try to be aggressive. Do not seek to be intrusive.

Conclusion

I am much more interested in progress than in brilliant ideas. Many good ideas do not look like these at first, so your ability to show development, progress in your work and your intellect, manifested in how you answer the above questions, is a very positive signal. As soon as I understand what you are working on, this is enough reason to believe that, quite possibly, you will be able to succeed.