Presentation of your startup

Here you have developed your idea to a working prototype. You and your co-founders are experienced and confident. Your angel investor helped open some doors for you by giving a couple of impressive partners. You just think about how to really start earning and hiring employees.

You have secured the attention of the venture fund. Your dreams run ahead of the opportunity to receive funding. You know that financing from venture capitalists is preferable to any other. In fact, you believe that investing from the right venture capitalist is making a big difference in your success horizons.

So you open the presentation file of your speech in Powerpoint.
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Already forty four slides. And you still haven't gotten to the financial and marketing plans. But while you raise in your head the edifice of a financial model and open spreadsheets with an analysis of demand, one of the co-founders ended up with a marketing section. I’ve got 20 pages and he says: “it looks like we need to roll back a bit”. Investors will want to see our customer life-cycle model (CLV) to understand what we are doing.

You know that there will be only one hour of your speech. Despite the assurances of your co-founder that good speech will be given extra time, you stick to your boundaries. You cannot trade this task. You take one of a dozen 150-page "how to do ..." books from the shelf, and scroll to find advice on how best to light up a particular type of startup.

A presentation for a venture capitalist is easy, but almost all entrepreneurs fail miserably.

Some time ago, the legendary venture capitalist of Silicon Valley, Guy Kawasaki , described the rules of the presentation. The system he called the Powerpoint 10/20/30 Rule . The basis of the rules is:

10 slides : presentation size
20 minutes : how much time to present
30th font : use really big fonts

Not that few entrepreneurs follow these simple rules, but many do not even go in this direction.

Most of the presentations that venture capitalists listen to are completely rubbish. And often it is more than 50 pages, carefully filled with small font painfully detailed garbage. Kawasaki calls “60 patented technology slides”, “first-mover advantages”, “all we have to do is make 1% of all Chinese people buy our product” is complete shit. Add the same links to "Web 2.0", "Social Networks" and "Web 3.x", and his groan will be relevant now.

Some things that entrepreneurs forget about, which they don’t know or don’t want to believe in them:
Your idea is not unique. Venture capitalists have heard the same idea before, perhaps many times.
If you can’t cut your presentation to 10 slides with large fonts, then your idea is out of focus, too complex or just fig. Your audience already understands something in the business that you offer (or you tell the wrong venture capitalists). Your job is to tell you why you are special.
Be realistic. Passion and fanaticism will not convince venture capitalists if there is no foundation. Neither hyper-complicated slides in PowerPoint, nor the amount of jargon will help.

What you put on these 10 slides is equally important. Venture capitalists want to know that you understand what problem your idea decides, that you draw on technological complexity, that you understand the market, that your team is trustworthy. Your presentation should contain these slides, in order:

1. Problem. What complexity, need or threatening challenge do you solve?
   Decision. How are you going to solve the problem? This is usually the most difficult slide for Silicon Valley entrepreneurs. They are all hard to fit into one page. Keep it simple, you are an entrepreneur, not a university professor.
   Business model. Many entrepreneurs make this slide the second page of the previous slide. But here you must describe how your initiative will act and increase the investor's profit . Remember, investors are not altruists who invest in research science projects. They are looking for how to make money on their investments. How does your business get to this point?
   Technological basis, process or platform. For entrepreneurs of Silicon Valley, this is an opportunity to embellish with their genius. But many entrepreneurs are almost as stupid as they get this item, as the second slide. The goal is not to make your audience understand the technology. Venture capitalists will hire experts to evaluate technologies that they do not understand (if they do not yet have their own expert). The point is to convince the audience that you understand the technology.
   Marketing and sales plan. Both of these plans should be described on the same page. Just like with technology, the idea is not to detail your advertising budget, or the sales process. But to convince the investor that you understand the importance and the way to sell and promote your decision.
   Competition. If this page is simple for you, because the answer is “we have no competitors”, then you can even not appear on the presentation. There is always competition. Point. No undertaking can be kept secret for long, and all good ideas will attract new competitors. Calculate in advance enough moves to predict who will be the competitor at the time when you will go to success.
   Team. In the end, venture capitalists invest precisely in the management team. Investors do not invest in your company with the idea to get rid of you and your co-founders as soon as possible. If they do it later, they will do it because your company can be a concrete miss in their portfolio. You get this money because the investor is confident that you and your partners will be able to fulfill your plan.
   Key points and forecasts. By this point in your speech, you have gone through the difficult part: a sensitive entrepreneur will know if he has lost an audience. Investors will not be interested in the work plan if they have already decided not to invest. This section should show the major milestones, commitments that will show the audience that you are doing business and that you are going to make money work. Hard work. Forecasts should be tied to these milestones.
   Current state and timeline (timeline). State where you are now on your plan. It is a good idea to include in the description what you have achieved, but do not dwell on it. Surely you would not make a presentation if you had not passed certain milestones, so present the completed stages simply. The timeline should be so long as to complete what you described in the previous slide. If you must, make a Gantt chart or use Visio to draw something big, bold and clear on the chart. Do not use MS Project. Investors know that these are only estimates, forecasts.
   Summary. Investment needs. Sum up the previous 9 slides as a pair of simple items. Let venture capitalists know why they gave you an extra 20 minutes - because you are waiting for their money to move on. Let them know why you need money. If you are not alone for ten million, telling investors that you do not need them will cause a negative reaction. Why do you think benchmark gave money to google? Because the majority of guys who are not in a hurry and say that they do not need money, they are not going to build Google.
   
   Note that there is no financial model on the slides. Your speech to investors is not a case presentation at a business school. This is not a merger and acquisition analysis for a bank. This is not an exercise in demonstrating cool formulas in Excel. Venture capitalists know two things, if they know anything at all. They know how to evaluate ventures like yours, and they know that a financial model in a startup is built on guesswork, desires, and exaggerations. I am planning another article on how an entrepreneur can evaluate his own business, from his point of view, and from the point of view of an investor. But this is only a tool to better agree. Venture capitalists for the most part already know their boundaries of assessment before you reach the negotiation stage. And the money - they have.
   
   What do we usually do with the remaining 40 minutes? You have been given an hour for a presentation, and it took 20 minutes. Let's analyze the real situation and find out what is happening with these 40 minutes at a meeting scheduled for 11:00:
   
   Even if you are not funded, it will not happen because you have too few slides, or you have presented too short and concisely. Investors, whom you will tell, will remember your speech among all the burdens of the day. They may not buy your idea, not believe in the market or technology, or your project does not fit their portfolio. But they will remember you and your team as trustworthy managers and entrepreneurs.
   
   And this can already open the door to your next idea.