How to Create a Winning Presentation for Venture Capitalists | John Colley | Skillshare

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How to Create a Winning Presentation for Venture Capitalists

teacher avatar John Colley, Digital Entrepreneurship

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

    • 1.

      How To Create A Winning Presentation for Investors Introduction


    • 2.

      What Do Investor Want to Know?


    • 3.

      Outline Presentation Checklist


    • 4.

      Sixteen Magic Buttons for VCs


    • 5.



    • 6.

      Pitching to Win


    • 7.

      Selling your pitch


    • 8.

      How to Run the Meeting


    • 9.

      The Management Presentation


    • 10.

      Defending Your Plan


    • 11.

      What Happens Next


    • 12.

      Activity Create Your Own Management Presentation


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When you pitch to investors, you first need to place yourself in their shoes to understand what it is that they want from you.  Only then can you begin to craft your presentation.  

It is important that your Management Presentation covers the critical information that the VC will want to understand in an organised and structured presentation.  To make sure you don't leave anything out, here is a check list of topics which must be included, albeit this is not the exact sequence or style of presentation that I would recommend.  Check out the later video on the Management Presentation for that.

The acronym "AIDA" comes from copywriting but its a helpful tool in this context.  It reminds us that we have to draw our audience into our world and get them excited about what we have to offer them before we try to sell to them.  I also share with you the parallel scenario of the car salesman, the master of the art of selling - and help you to understand why he does what he does before closing the deal.  Remember, you are in a sales meeting too!

You pitch is so much more than just a recitation of the fact, features and benefits of your business. You are in a sales meeting and you are selling your equity in return for cash - so treat it like a sales meeting and make sure you do everything you can to sell!

I want to share with you some key tenets which will help lift your pitch above the average.  I want you to use stories, to humanise your pitch, make it more interesting and engaging.  You need to connect with your VC audience so that they become passionate proponents of your project and this lecture will help you to achieve this.

Before we talk about the management presentation itself, I would like to discuss how you should run this first meeting with the VC.  It is very important that you take control of the agenda from the outset and that you make your time limitations clear.  I share with you how this all works and why it is important in this lecture.

Now its time to bring things together and I want to walk you through the key parts of your management presentation so that you can understand its construction which will make creating your own so much easier.  

Try to remember what has been covered so far and weave those components into your narrative as well.

You must not forget that you will be challenged on your plan and your financial model assumptions and I do not want you to forget this.  Make sure you are in command of all the detail because, sooner or later, these questions are coming your way and you cannot afford to flunk this test of your competence.

The process does not stop after the first meeting and this lecture briefly explains the steps you can expect to follow a successful first meeting.

Finally, I want you to consider preparing your own management presentation and as the project for this class, I have provided templates for your use in PDF, Keynote and Powerpoint formats. 


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John Colley

Digital Entrepreneurship


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Here is a little bit about Me...

Cambridge University Graduate

I have a Bachelors and a Masters Degree from Cambridge University in the UK (Magdalene College)

Master of Business Administration

I graduated from Cass Business School in 1992 with an MBA with Distinction and also won the Tallow Chandler's prize for the best Dissertation.

British Army Officer

I spent nine years as a Commissioned British Army Officer, serving in Germany and the UK in the 1980s, retiring as a Captain. I graduated from the Royal Military Academy Sandhurst (Britain's West Point) in 1984.

Investment Banking Career

I have spent over 25 years working as an Investment Banker, advis... See full profile

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1. How To Create A Winning Presentation for Investors Introduction: Hello and welcome to my course. How to create a winning presentation for venture capitalists. Hi, my name is John Colley. I'm a 30 year plus senior investment banker. I've earned two of my own boutique firms, which I've taken to multiple seven figures. So I really have got a lot of experience which I'm so excited to be sharing with you today . I want to show you how you can create a presentation for venture capitalists or any external investors that will convert on will help you to raise the money. You need your business. Now, don't forget to hit the green follow button to make sure that you don't miss any off my future courses or anything that I'm publishing here. Pitching to investors is a critical skill, and it's a skill that every entrepreneur must master. It's absolutely critical, and in this course I'm going to show you the essential the critical information that you need to be able to communicate about your business and your team on your uniqueness to potential investors. And if you follow this course through to the end, you're gonna be able to put together a structured and well organized presentation of course , you only have one opportunity to make a first impression. Please don't mess it up. I've seen so many pictures go wrong because of bad preparation. Now, sometimes I've been able to intervene before we get to the investors and get them to redo the pitch. But sometimes I haven't had that opportunity on. The result has been disastrous. I don't want you to be in that camp. So if you're an entrepreneur, if you're in investment banking adviser of any kind, if you're an N b a student or even if you're working inside a VC, I think you're going to find something in this course for you. It's for all levels. I'm not trying to dumb it down. I've tried to make it as comprehensive, but as easy to follow as possible. At the end of this course, you're going to be able to put together a great investment pitch on. I've set up the course project with templates to make that as easy as possible. If you have any questions or issues, just message me here, and I'll always do my best to answer them and to help you out. So if you're looking to raise money from investors. How can you afford to miss this course in role today? And I look forward to seeing you inside the course. How to create a winning presentation. Prevention capitalists. You've got to take it. See you inside the course. 2. What Do Investor Want to Know?: when starting out to consider how you're going to deliver your management presentation. The first thing you have to put into your mind is what the investors want from you. The first question they're gonna lost themselves even before you come to the management presentation meeting is why should they be interested in your business? So this is a big question, a big hurdle you need to overcome because they see probably about 500 business opportunities year. Maybe they invest in five. So with 100 1 chance you've really got have a very compelling proposition, and that means you could have a very well prepared management presentation. The next thing that will be on their mind is how big is the problem and how vital is your solution going to be to solving it now? The reason behind this is very simple, that it unless you're dressing a major market, the ability of your business to scale on the ability of your business to become a key market player is very limited. So they really want to know that you're addressing a very large market and that your business is going to be a key component off delivering the solution to that market. And of course they'll want to know how unique your proposition is, because unless you can differentiate yourself unless you can stand out from the competition , then they won't see the opportunity for you to take market leadership. Then they'll turn their attention to you on the house themselves, perfectly reasonably, who are Who are these guys? I've never met them before. I certainly never met them before on I really want to know who they are, what they've done, what their background is, what the education experiences have. They done startups before because they'll be asking themselves the key question, which is, Can they back the team on? That's really one of the core success parameters for any V. C. Investment is having the right team, so you really gotta nail this one is really important. They'll want to know that you have got what it takes to succeed, and they'll want to see that in your past track record. B. C's are very nervous about investing in management teams who are absolutely brand new to the game and haven't actually held senior positions in other businesses before they come to do the startup game themselves. And at the end of the day, it's all about establishing confidence in the team in the minds off the B C investors. Okay, so let's look at the market opportunity on. Really. It's a question off scale you've got to do to be able to demonstrate that there is a big enough market out there that even if you end up with a relatively small percentage of it, you're still gonna make them a lot of money. And don't forget their looking for a 10 times return on their investment. So they're expecting whatever the valuation is pre money when they exit that valuation to go up 10 X so it's gonna be a big market you're going to get into. So then we need to ask, what is your product and solution? What is it that makes your product or solution unique and critically? Why hasn't anybody else done this before? And they'll really want to understand from you what it is you've come up with that is so special that is gonna make such a change to the market where existing competitors are not doing something similar. Okay, then they want to understand your business model in very simple terms. They need to understand from you. Can you make money? How are you going to make money? How you going to sell your product or service? Part of this is really understanding that you've already got some customers that you've got what they call traction, which is proof that people are prepared to pay money for the product will, service or solution that you're offering. Now, on the question of competition, you have to realize that you can't turn round and say there is no competition, everybody, every business has got some competition. The question is, what are you going to be doing differently to that competition that will make your business stand out and make your business successful? Of course, part of this is understanding what the barriers to entry are. What is stopping your competitors once they see what you're doing from copying you? In other words, once you break into the market, how are you going to remain competitive? Now? Let's look now at the financials because these are critical. The sorts of questions that want to understand is how long is it going to take you to become profitable? How are they gonna exit from their investment? What sort of returns are they going to achieve on when they look at your financial model? In your financial projections in the round are your assumptions. And is your model credible? When it comes to the current funding round, they'll need to understand from you how much money or trying to raise on. They want to know what progress you've made to date. Now that is in two parts. First of all, I want to know how much money you've raised to date from previous investors on the sorts of details There will be at what valuations, when and who those people are. But they'll also want have some idea of the progress you're making with your in existing investment round on. They'll always try and get from you some evaluation expectation. Now, classically, in these situations, the investors will be looking for somewhere between a minimum of 20 and probably as much as 40% on. There's always in negotiation, and it's quite a difficult thing to judge. At what point do you flag up to them where your valuation expectations up because all you're doing really is putting down a minimum marker on what they're looking to do is obviously t get mawr of the company for the fundraising they're gonna put in. And it's always a discussion on the negotiation When it comes to use of funds, they'll really want to know that you have got a detailed plan for how you intend to spend the money you're raising on. This needs to be locked into some very clear milestones so that they will be able to track your progress in the future going forward. And part of this is you convincing them that you've got a very detailed understanding off what your plan involves on what you want to do with the money they're going to give you. So these are some of the things that the investors will want to know from you. Now, the key thing is actually how you package up that information into a really compelling presentation, because what you're not doing is just delivering them a list of answers to those questions on. That's what we're gonna be tackling in the next few lectures 3. Outline Presentation Checklist: in this presentation, I want to give you an outline. Checklist off the content you'll need to cover in your presentation, although this is not necessarily the order in which I think you should present it. But I do want to make sure you got all the points covered on this is the simplest way to do it. You'll need to start with a high impact title slide with the name of the company and the tagline. You may not want tohave a parrot on the front of your presentation, but have something which is obviously relevant to your business. The business overview slide or the business overview content that you'll need to include should include a one liner about the company, which is like in capture lates The key features and benefits. You must communicate the problem that you are solving for your customers because that's really, really important and at the same time help them to understand why the way you're doing it gives them gives your customers unique benefits but gives you an unfair advantage against your competition. You should explain briefly the history and the funding that you raised to date of your business, and you can do that almost in a story by explaining how you got involved in the business and how passionate you are about it. In essence, what you're trying to do is to convey the the strength of your business and make it clear that there are very few weaknesses. It's important early on to introduce your management team. Now you need to get across the key members of the management, not all of whom will necessarily be on the board, your board of directors if you have one and any key advisers, and you should keep your comments limited to a few bullet points about their relevant experience, the relevant education. And if they have had experience in startups in the past than definitely get that in, it's worth putting in here. If you've got a gap or two in your key team, which at this stage your business may be perfectly understandable that you also highlight those key hires there because you're just stopping the BC's from coming back to you, saying, Well, we don't like the business because you haven't got a finance director, but you can deal with that and and cover it before it comes up when looking at the problem , You're also looking at the market opportunity because the two of the same side or the opposite sides of the same coin. So what problem or pain for your customers does your business solve? And in explaining that you need to cover the size of the market and how the market is growing on, why there's a real opportunity here, cover the key trends, in essence, get across the opportunities and also some of the threats. It's not a bad thing to admit that you know there's competition out there. Just make the point that the way you're doing it is better than the way the competition is currently doing it. In covering off your solution, product or service, you must get across why What you're doing is unique. Your USP, your unique selling point. What is it that's so different that the other people are not doing it as well and will enable you to stand out on be competitive in the market? You need to explain what stage your business has got to and get across to your audience. Why your why your customers, by your solution if you're going to include the demonstration. That's fine. You don't have to. If you could do a live demonstration, that's fantastic. It really does depend on your product or service. But for heaven's sake, don't get it wrong. I always quite like to be able to bring in a video here. Here, The limits of things going wrong is you not being able to run the video. And if you got on your PC or your Mac, that's very unlikely. So it's a pretty safe bet, and you can have, you know, it really nicely produced and prepared before you go into the meeting. The business model really explains how you make money so you know it's It's all about your go to market strategy, how you reach customers, how you price things, the partnership, strategic relationships you're going tohave. The veces want to understand that you can monetize your product or service and exactly how they do it, how you do it, and therefore you're taking some of the risk out of the proposition for them. They will also want to know who your target customers are. Andi, particularly on it does depend on the stage of your business, whether you have any paying customers because traction and sales momentum is really important if you've got a pipeline. As I recently found out in one of the company's I'm advising at the moment, if you've got a pipeline, make sure they understand that you have that. The lack of sales is not because you haven't been able to settle your products. It's because you can only make so many off them or whatever it is. But you've got this huge pipeline off products that you could sell it, and you could make enough off them in addressing the competition. It is important that you do set out very clearly how you are differentiated from your competition. I find a A product. Competitors matrix here very simple, maybe three or four competitors three or four key features and explain why some competitors cover some of them. But not all of the competitors cover all of them because that's your job. Frankly, explain how you're going to compete against them on how you differentiate your business. That again is two sides of the same coin, because when you go to a customer, you need to make it clear to the BC's how you position yourself to the customer and therefore why the customer will want to buy your product or solution as opposed to an alternative that may be in the market. Barriers to entry are incredibly important. What keeps others from copying what you're doing now? Things like unique intellectual property software patents are really important. These are things that veces need to see and really want to see. And they want to understand that your advantages are both sustainable and defensible. So you'll need to explain that. And it's worth mentioning. If you've got any critical team members to. This whole process may be the people who owned the patterns. If that's the way it's worked out, or maybe some key software engineer, then you actually do flank this up When it comes to the financials, bearing in mind that behind the financials you must have an integrated profit and loss account balance sheet and cash flow model on that needs to be monthly for at least the next three years and then probably quarterly for the next two years after that. So it's very, very detailed. They will want to understand what your current revenues are, what your run rate is, which is basically this month's revenue. Times 12 assuming that your revenues growing every month and they'll need to understand not only your projected revenues, profits and cash flow, but they'll need to understand that you really understand the numbers as well. And that's absolutely critical in terms of the cash, because you obviously coming to them for a funding, how much cash you've got at the moment, what your burn rate is on, therefore, what your runway is on. What that means is, how much money have you got in the bank before you run out of money? Now there's a key point here. If you turn around to them and say, You know, we've got one month's money left in the bank, then they know they've got you over a barrel because you're about to run out of cash. Andi. In fact, you may not even be able to get this thing funded before you actually hit the buffers. So make sure that you start any funding process at least six months before you see yourself running out of cash and try to have some contingencies up your sleeve for extra cash, maybe from an angel investor or from an existing investor if you need to, but they will want to understand that on when you raise money you want to be raising enough money for at least 18 months. But of course, it really depends on what your cash flow projections are on when you're going to get to cash flow break. Even so, how much is the current raise? They will want to know that because it needs to be a relevant number to their funds. So you need to be within the range of investments they like to make. Each fund is different, but I don't recommend in the first meeting that you actually explain the valuation you're expecting. That will be a negotiation. If they press you on it, you can say, Well, it's going to be in a range off 20 to 25% or whatever. But don't get pinned down on it at this stage because you're gonna have ah long and drawn out argument about it when the term sheet hits the table and I would keep your powder dry for that time, they'll be interested to know if any existing investors of following them money. There may be very good reasons why they're not or they're not able to. They're like to understand how much you raise so far on who your existing shareholders are . If they can get it from you, they'll be interested to know at what valuation you raised money last time. And if you can keep that information back so much the better, um, in terms of use of funds, then you'll need to give them a very clear understanding from your business in your financial plan. What your milestones. Your key events are going forward in the future, which will be enabled by this fund raising and how far down your product on business plan this fundraising will get you and, if applicable, when you're going to need more money. So these are important things to take off now. One thing I think is really important. I keep on harping on about this is you have to push back to them to ask them if they are the right partner for you. They want you want to understand from them how they add value to the deal, how you're going to work with them together, what their sector experiences like him. What then network is like in this sector that you're in, you're certainly, I would have thought Want to have the opportunity to talk to some of the investing companies down the road, So these are the sorts of questions you'll need to put back to them. And as you'll see when I talk to you about how you do this presentation, this is really the last step in your presentation so that you open up the discussion where they basically pitched their business to you at the inside. By all means, have your company name in your contact details. Doubtless you'll be handing out business cards, but you need to make sure that they know how to get hold of you. If they can do. If you're going to provide them with a copy of the slides, that's absolutely fine. B'more likely or going to give them a copy of the pitch deck, which will have all the details in your pitch deck, must have the same contact information at the end of it as well. So let's go through the checklist off the headings, which I think you must make sure you get covered off in this presentation. You need to have the business. Overview the management team. Explain the product market opportunity. Explain your products. Additional service include a demonstration if you're going to include one that is the only optional part of this discussion. Explain your business model and how you make money, who your customers are and how you solve them and why they buy from you who your competition is. Everybody has competition, but just make it clear that they're not doing what you're doing as well as you are doing it . Ensure they understand there are clear barriers to entry. Make sure they understand you have clear financials. What those financials are on that you are in, commander, the detail off them, what you're expecting to raise in this current funding round and how you're going to spend the money on, then back to them. Are they the right partner for you and then you have your n slide. So this is your checklist off information you want to convey in a very structured presentation, which is going to last 20 to 30 minutes. And this is why it's so important to get yourself organized to make sure you have all the content at your fingertips on to make sure you're ready to deliver it in a well organized presentation over 20 to 30 minute period, and I'll explain how to do that in a later video. 4. Sixteen Magic Buttons for VCs: When you're preparing to pitch to investors, you need to be aware off the buttons that they want you to push the magic buttons that will tell them that this is the sort of investment they want to invest in on in this video. I'm going to summarize these for you. So you have a very clear idea off the messages that you have to get across both directly and indirectly to make BC's get more interested in investing in your business opportunity. Now, bear in mind that B. C's are in the business off screening deals, and what they're trying to do is to screen as efficiently and as quickly as possible to get rid off the bulk of the opportunities that land on their death so they can spend their time focusing on the opportunities that really interesting and to give you some idea of the numbers they will probably in a year C 500 deals, and they will probably only invest in five of those. So that's a 1% chance. So this is why this is so important to get right. So how do they screen deals when it's very simple? They have a checklist mental checklist, which basically says, Does this deal tick enough? Boxes for me toe? Want to look at it more closely? And those are the magic buttons that you need to press on those of the magic buttons I'm going to share with you in this video. So there are 16 key buttons that take The box is now called The Magic Words, but actually they're combinations of words, but they are the creek idea you need to address on. The first of these is market and competition. Essentially, you must communicate to the V C that you are addressing a large market. Got lots of nice, big, rich, paying customers in it. On that you understand who your competition is and how you compete with them, and particularly how you position yourself to be unique when you compare yourself to them next product maturity. They want to know that you have a product that is already in the market and selling at this point in the game. Veces do not want to take product risk, so you have to have a product that you've developed and which you have sold to some customers. If you haven't done that yet, you're really at the Angel investment stage, and that's where the product and customer risk is taken. But by this stage, you want to have your product in the market on at least a few paying customers buying it. You want to be very clear that the product you have in the market may only be version one on that. You've got plans when further funding allows to develop this further, to make it even more sophisticated, even more difficult to copy, even more valuable to your clients. So having a product life cycle and product plan stretching after the future is absolutely critical. Next, you must have patterns. You must have intellectual property and defend ability so it makes it very difficult for your competitors to come and copy your ideas and your product. So getting the word patterns into your presentation, getting the word proprietary information proprietary technology is really important. Part of this is all about creating barriers to entry around your product, which means that even if somebody could physically copy it because off either the patent protection or the intellectual know how behind it, it makes it very different. Difficult to actually copy the idea and come into competition with you, so barriers to entry is a key phrase. Customer quality is important because they want to know that you are addressing customers who are large enough in scale for whom this will not be a major defining investment. It's going to be something which is going to bring them a lot of benefit, but that they will want to spend money on on. They'll have money in budgets to spend it so high. Large, large size customers with lots of money to solve to spend on the problem you're solving is what they're looking for. Sir, customer quality is key. Allied with that, of course, is management quality. You want to demonstrate you've got the team with the right experience. Both industry start up the right intellectual knowledge, the right cohesion within the team you've worked together before, perhaps so that you can actually deliver. And it's card work to deliver This, as I'm sure, you know, deliver on the business plan that you're going to be effectively selling these veces having specific startup experience is a huge plus. So if any of you have got start up experience and frankly, even if it failed. It's still better to demonstrate you being there before failure is a little bit of a stigma in the UK It's not so much of a stigma in the U. S. People expect startups to fail, and you want to be there and bouncing back with the next great idea. Having a learned from the experience that you've had before. Branding and trademarks is also very important. It builds more barriers to entry on. You need to have developed a clip brand for your product or service, and you need to have trademarked your brand name, which gives you extra protections. You need to have a clear sales and distribution structure. They need to understand how you are bringing your business to market, what the channels are and how you're addressing them. And this is a key point in them having you're you having the credibility that you can actually create revenues and monetize the products or services you're developing. Now reporting is important. They'll want to know that you've got your fingers really on the controls of your business and that you can deliver timely and accurate information to them. So part of this is having a relevant sophisticated up to date, well put together financial plan that you can measure your progress against on which you can deliver reports on because for BC's knowing every month what you're doing on that your meeting, your your plan and staying on track is really, really important. And if you start dropping behind on that, you might well find yourself out of a job. I po capability. This is really all about exit planning. They'll want to know that the there are alternatives to the trade sale. And if your business is going to be clearly floatable in the public markets that always gives them the alternative on helps them in the negotiation, they will assume that trade sale is going to be possible. But if you can add the layer on top of that, that says that we will be able to float this business if we don't want to trade sale it, then that is very attractive to them because not only can they get money out, but they can also then continue to participate in the upside. Operational stability is all about having a tight knit management team, a smoothly running operation, a good group of people below the management team on a business that working on that is about management skills and delivering on putting the business together and making it operate properly as a proper business. So you need to demonstrate that even though you're probably bringing in quite a lot of people quite rapidly, you're actually doing it in a coherent and cohesive manner. Sales and profits Consistency is important because they don't want to see the props, sales and profits line month by month. Going up and down like a yo yo you need as part of your business model toe have a range of revenue streams that will give you some upwardly growing, relatively smooth curve. So if you don't get that big, bulky sale in this month, it doesn't matter to month because you've got these other revenues toe to build it up. And that's actually really important. A feast and famine business model is not something that's particularly active. It's too high risk. And this leads on to diversification options, because if you can actually take your product, your expertise, your intellectual property on develop additional revenue streams from it, then you're going to make your business even more valuable and that something is definitely worth considering on the final one of all, these is scalability. They want to know that you can actually 10 times the size of your business without having to 10 times the size of your head count. In essence, because if your business is scalable, then its growth is going to be much higher, heart higher and faster than it otherwise would be, which makes your business more valuable. So those are the 16 buttons that B. C's are looking to press. I'm sure when you go back and you go through your business plan and you go through your pick stick, you're gonna find a lot of these. You've just got to make sure that you bring them out front and foremost so that the veces get the message very, very clearly. 5. AIDA: in this video. I want to share with you a very basic tenet off copyrighting, but I think it has really relevance to when you come to pitch to BC's on. I also want you to think about why pitching BC's is like buying a car. So let's talk. First of all about Aida, what is I either? Where Aida is one of the core tenets off good copyrighting, And it's all about taking your reader on a journey at the end of which you actually get them to do what you want them to do in the first place. On that journey is simp summed up very simply by attention, interest, desire and then action on. The whole idea about this is you don't get them to run before they can walk. You don't get them to ask them to do something before they're completely immersed into the whole atmosphere you want to create for them when you want to try to sell them something. So let's take a look and see how this applies to the VC pitch. Well, the whole starting point is your big idea or your hook on that gets their attention. So you set in their mind The idea the great world changing thing that your business is going to be able to achieve on that really makes them sit up and pay attention. Wow, if you can actually do this, that's going to be amazing. Then you develop it. You let them know who you're great team our and you also explain to them the massive problem you're selling, so you deepen the issue for them. You help them to understand that there's something really interesting here, and that's the key word interest. So you've got them on the hook and now you've aroused their interest. But you've got to appeal to that banality to there their greed. So you then explain your amazing and highly profitable solution where they could make lots and lots of money, and that creates the desire that creates the real want off them to be involved in your business because they want to come along for that journey and make the money with you. And then you hit them with the court action. But that call to action isn't just saying. I will thank you very much. Have you got any questions that court action is that Okay. Now what I want to know from you is are you the right partner and you push the ball back in their court. So you then have a very specific call to action, which then puts the event the emphasis on them to then communicate with you. And that gets the whole meeting going in the direction that you wanted to go in. But you have to have this process. Let's think about eight another way. You just wouldn't walk into the room and say Hi, We're from so and so we're looking to raise $10 million on for that will give you 20% of our company. It's Bital. That's a bit in my face. I didn't even know who you are. I mean, what's this business about? What's the opportunity? Why should I want to do this? That just over houses. So many questions. So you have to be a lot more subtle about how you do it, and that's why Aida is a really important way of thinking about it. So let's ask the same situation when you're buying a car. So you go along to the car showroom on the Commons car salesman stand of it. Yeah, there might be a ticket on the car which shows you more or less in the right ballpark, so they'll probably know you're looking to raise $10 million that's the right size for their fund. But he doesn't just trying to get you to sign on the dotted line. You know they want. Here's the car here. The keys. Just give me the 10 million year, the $10,000 for the car and we're good to go. No, no, no. He doesnt lead with the price. What he does is he immerses you into the deal. He tells you all the wonderful things about this car. Why it's gonna be so desirable. Why it's gonna make you look so good. Why, it's gonna make you feel so great when you get into it in the morning. So you could imagine yourself driving the car today. That's why he encourages you to go on a test drive and try it out, see, really at the feel and the smell of it and the oh, the whole thing becomes an emotional experience. Then he does the price negotiation. Then he turns around to you and you start talking about the price on. Yes, he'll have his his negotiation points to help close the deal. But by this stage, mentally you've already bought the car. You're already emotionally there. Now you're just trying to get the the paperwork sorted out so you could drive off the forecourt on. That's the sort of approach psychologically you must take with investors. You have to treat it as a sales pitch as a negotiation, not just simply as a very simple presentation. There's a lot more to it than that. So I hope you found this helpful. Aida. Keep that in your mind and just remember how the car salesman treats you. Obviously, this is a much more sophisticated process than buying and selling a car, but actually underlying it, the same forces are exactly the same. Forces are at work. 6. Pitching to Win: in this lecture. I want to show you how you can take your management presentation to a completely different level. I want to help you toe elevate it so that it becomes a winning pitch rather than just a me too Pidge, to start with, I want you to consider the purpose off the first meeting with the V. C. Because this is not the meeting at which you fundamentally convince them to write you a very large check. This is all about convincing them that you've got a very interesting business opportunity on that. You're the right sort of people they want to work with. So what you're really looking to do is to establish a credibility and a connection with these veces so that they will want you to go and become one of their poor failure companies . And part of the way you do this is that you give them such a compelling presentation that there we want to go and talk to their colleagues about it and convince them that your business they want to invest in now one of the best ways you can do this is using the power off storytelling. Because if you bring stories into your presentation if you make it personal. If you make it about a a personal progress that you're you're hoping to achieve, then you'll make the whole proposition far more interesting. And in presenting this, I want you to think about the concept off the hero's journey, a man who is basically where you start off at a beginning state on. Basically, you go through a series of trials and tribulations of the end of it. You're successful and you end up in a very different state. And that, of course, is a way of looking at how you're going to develop and fund and ultimately successfully exit your business. But by turning it into stories and making it all about people rather just about numbers, you're actually making it a much more interesting proposition for the investor. And you're taking them away from the purely analytical on bringing them into a re a world. So you need to be able to communicate your passion and your vision rather than just building a case around numbers. Stories are a wonderful tool for capturing attention, and if it some point, you find that the attention of the investors is wondering. You can always slip in a quick story and say, Well, you know, that reminds me of the time when, and then tell them a little story about how you struggled with something in your business and you overcame it. So always use stories as a tool in your management presentation to ground your business in reality and keep the investors enthusiastic, compassionate, because people love to be told stories. Now the essence of a good story is one that has a believable character with whom people want to emphasize. Empathize. A good story has a struggle or conflict in it, and it shows a changing world state so that the purpose or this of the struggle the conflict is to change the world state for the better. On that there are real downside consequences or failing to do that. Now, if you're trying to introduce a new technology or do something very innovative in business , then in order to make it financially successful, it will actually have to have a real purpose and benefit to it. And you can. I'm sure see how you can knit these elements of your business into the storytelling structure to make it mark more compelling. We've already talked about the big idea, the hook, if you like. And this is where you set your business up in the minds off the V C in the minds of your audience, so that you and your business become the core metaphor around which you build your presentation. So by coming up right at the beginning, with the bigger near and saying right, the big idea is that I am goingto bring this solution to the market and we're going to completely change the world. You're setting them up for the purpose and the narrative that Jurgen going to deliver to them in your storytelling, you need to emphasize the difficulty off the problem you're solving, and it's not good enough when you're delivering your presentation and you talk about the pain or problem to swiftly go on to the solution that you've got, you really need to make them understand that the problem or the pain that you're solving is a really deep one, and that it affects a lot of people and it costs a lot of money, and it is worth really taking this message to them in some depth and spending two or three minutes explaining it rather than rushing onto your solution straight away. And we'll always talk about competition in these presentations. But it's a good thing to admit that very early on that people are out there who can deliver similar things to you, although no obviously as well as you do it on. Therefore, you make it clear that you are aware that there are competitive forces and you're aware who these people are and you know how you're going to compete with, um, when you explain the market opportunity, you really need to get across what it is and how your business is going to take advantage of it. Now you can use trending explanations, you explain. You know what's been going on in the market and how forces air changing the market. But you need to explain really how and why your business is poised at this exact time to actually go and exploit the opportunity that you've identified in the market and how it's going to do it. Try to introduce your personal connection and passion to the business. The more you can grand your presentation in human terms, the more believable and the more credible you will be. If you're simply doing this to make a whole load of money, it won't be half as interesting as if you've got some personal reason why you really want to actually make this business a success. And if you can communicate that with them, then if they can feel that passion that Macon buy into it and as soon as they start to buy into it, you're already starting to accept successfully sell your idea in your business to them. When it comes to explaining the value proposition, you need to do this very, very clearly on. I've actually got a formula that allows you to to put it, these these this across in very, very stark terms. But then you should illustrate it with and again human examples and stories to show how it really benefits your customers. And you know, the people who will use your product service will solution. So this this key point in your management presentation has to be delivered with absolute clarity and precision so that you really lock in the value proposition into the minds off your audience when it comes to then taking them forward and explaining what the business is going to look like after the investment event. Try to do it in a way that involves the investors, you know, and you describe it in terms off the achievements you and they are going to achieve the things that you are going to do together that are going to change the world for the better . Just imagine what it's like if you're going to be able to, you know, create the first bridge over the Atlantic Ocean or whatever the the business is aiming to do. But put them in a position where they become part off the winning team as well. Because you're binding them in again, emotionally, into the narrative that you're delivering to them now, right at the end. And this is a crucial point. I believe you should not be asking them directly for questions. What you should be doing them is doing is to set them up to explain to you why they are the right partner for you. How can you help us? You want to put the ball in their court now The purpose of this is very deliberate, and that is to stop them being able to go into a an an analytical Q and A and attack your business, but equally make them realize that they actually are not sitting there simply listening to you begging them for money. But actually, you come to them to say we think you're the potentially the right partner for us. Now, in order to talk about this partnership, we need to hear from you how you're going to contribute value to the overall business, because what we're looking for isn't just money. We're actually looking for a valuable partner who is going to give us the best chance of succeeding with this business on. They have a role to play, and you want to understand from them what that role is going to be. So you're putting them on the spot on making them, then pitch to you, and that gets you away from what could be a very damaging an analytical Q and A session. You can go into a law that analytical Q and A when they're more bought into the business. But at this point in time, you're trying to get them to get tied into you and to develop a relationship with you so that will be want to become your partner going forward. So those are some of the more subtle aspects off how you spend your presentation in order to make it a winning presentation, as opposed to just another me to list off features and benefits about some business that you want them to put a lot of money into. 7. Selling your pitch: before we go into actually how you put your management presentation together, I want to cover some key points which will help you to actually build a real sales message into your pitch. Now, the first point here is to come up with a really compelling hook on by what? What I mean by this is a statement right at the beginning of your presentation, which is going to grab on hold their attention. It's like the big idea, the whole idea behind your business that is going to transform the market and make you and your investors a lot of money on you can call it the big idea, you know, now the big idea here is, and then you go and explain what it is. And by doing that, you're actually setting up the premise for your whole management presentation. And you're giving them a context against which to judge what you're going to say because they know exactly what the big idea is, what the goal is, what you're hoping to achieve with this business that you want them to fund. It's really important that when you go in, see a VC that you've done your homework on them that you make sure that you tailor your presentation on the way you deliberate to suit them so that they know that you understand them. You they know how they cover and categorize and organize their investments and how they described them. And very importantly, they also I know that you've worked out which of their partners specialize in your area, and hopefully we're gonna have at least one of them at that first presentation meeting. So you really do need to couch the terms off your management presentation in in words that reflect they V. C that you're seeing not very difficult to do. It just means you've got to do a little bit of preparation before you go and see them and make sure you've got that context sorted out into which you can deliver your presentation. Let's cover a few basics off your presentation because these are important markers to put down. To start with, I don't recommend having more than 15 12 to 15 slides. Very often, people talk about 10 2030 which is 10 slides 20 minutes, 30 point fund. So you're giving a very focused and concise presentation. You are not delivering a very long wandering, meandering discussion about your business on Bear in mind that if you're aiming to give a 20 to 30 minute presentation and you've got 15 slides, that's about two minutes. A slide on as you go through your presentation. Don't get bogged down. Keep the momentum momentum going Now. I always turn up at these meetings in a suit and tie. It really depends on your business culture, but please turn up smartly. Whatever you're wearing. Don't look scruffy. Look professional. I know in the West Coast, in the US, things are much more relaxed here in England, we do things differently, but just suit your attire to the context of the investor. You're going to go and see make sure whatever you do, you turn up early, maybe 10 minutes or so early. This gives you a time a chance to get into the meeting room. And if you've got a laptop for or a demonstration anything you need to set up, you're gonna have time to get it set up As soon as the meeting starts. Confirmed how much time they have got for the meeting? I would expect the meeting to last one hour. But you should confirm this right up front, and if it is going to be one hour, then you should be aiming to speak for 20 to 30 minutes, and I don't think you should be aiming to give your presentation for any more than that. Do you want to give plenty of time as you'll see for them to react to the presentation? And I'm not talking about questions, but we'll come onto that in due course. So let's cover some of the key points, and I'm really drink trying to reinforce the message from the previous video that you will need to cover. These are like the highlights on we're going to go into them in a lot more granularity in detail. You'll obviously need an introduction to the business, which is a very short and explanation of what your business does. You'll need to introduce your team both the people who have come to the meeting as well as the people who are your core management team, your board of directors, your advisors. Then you'll need to explain to them the opportunity that your business is capitalizing on, so you have to explain the market opportunity on, then you need to explain your solution, how you're going to actually solve the pain or the problem in the market and make money out of it. The next thing from that is to explain who your competition are, so they will want to understand the context in which you're going to be competing in what will inevitably will be a competitive market on the business model will tell them how you're going to do that and how you're gonna make money, and at the end, you need a call to action. But the court of action isn't to say thank you very much for listening to my presentation. Do you have any questions? It's something altogether different, and I'm going to come onto that. So let's just drill down. What is the focus? Your presentation? It's explaining what the problem is. It's explaining what your new your unique solution is. An ex explaining to them why you have the right team to achieve this. When you put your management presentation together, try and have one clear message per slide and it's hitting these these high points, which is very important. And as you're going through, don't be afraid to drop names or, you know, off either people or articles you've appeared in or magazines you've appeared in. Whatever the context is that you can delivered to add testimonials and social proof to your business, little in house your personal credibility as well as the credibility of your business, then you push it ahead. Don't be afraid to use these things if they're gonna help to sell your message. Let's understand that what the investors really want is a clear problem in a large market, because for them that means a great opportunity. And they'll need to be convinced by you that there's a need for the solution on why it's worth solving the pain or problem i e. There's an awful lot of money at stake, and you're going to somehow save that money, or you're going to achieve something amazing which people are going to be prepared to pay for. So you'll need to explain exactly what you're offering to whom you are offering it and at least three clear benefits off the business product solution that you're putting into the market. They will want to know how you're going to leverage and scale your business because scalability is want to be absolutely critical keys that investors look for. They'll want to know why your product or solution is actually going to be a whole company. It's not just one little feature that you're gonna introduce to the market to somehow differentiated product or a service. So you actually really going to put some bones around this? If you've got defense ability, then they'll want to know what your petting status is. You know, what's the intellectual property here on? How far have you got to actually getting those patterns and getting that protection in place? To sum it up, they'll want to know what your key differentiator is, how you are going to stand out, how you are going to create competitive advantage, what your unique selling point is, and you need to get these messages across so that they actually almost go through their checklist and take them off. So how are you going to demonstrate your solution? Well, it really helps if you can give them some sort of demonstration. It really does depend on your product and services. Whether this is appropriate, if you can do it with a video, that's great If you could do some sort of live demo, then that would be even better. But heaven's sake, don't get it wrong. It must work, and you'll need to do. Make sure that your demonstration validates the differentiation points that you already made in your presentation, and you'll need to make sure it's clear in their minds what your intellectual property is on what your unique technology is that is helping you to achieve this and why your product service or solution is better than the competitions. Now, when you're setting this out on door looking at your competition, you can set out a competitive quadrant. You know you can have feature 1234 and you can have competitors A, B, C, D. And you can show which competitors have which features. But hopefully no single competitors will have all the features because that's actually what your business does. The question is, they'll be asking themselves is if you're going to displace commonly use technology, how are you going to do it? If you're going to change business processes, how are you going to convince your customers to do it? How you're going to disrupt the current value chain and why your customers will want to embrace that disruption in a sense, with it or in essence, why your customers will see so many benefits from your solution that they will want to embrace it because don't forget they don't have to switch. The the most likely option for them is actually just to do nothing and continue with the customer with the supply that they already have. So these are all things you need to work into your presentation. When it comes to your business model, there are some key things you're gonna have to get across, and you may not put all this detail in your management presentation. But you certainly will need to have this information your fingertips, because I'm sure it'll get covered in the Q and A. So you'll need to be able to explain your revenue model on the key metrics behind it. You'll need to explain how you're pricing your product or service is in the market. You'll need to demonstrate a clear understanding off the lifetime value off a customer, or at least the assumption that's built into your model for that value. What is your customer churn gonna be you know what? How many different users are you going to get over a period of time? Have you got a clear sales and distribution model? Have you got a very clearly defined go to market strategy? What is your current customer pipeline? How many customer winds have you had already and critically, what key milestones are you aiming to hit at going forward after the funding round? There you are. These are some of the things you'll need to bring in to flesh out your presentation, to turn it from simply recital off benefits and features into something which is a really selling exercise because you're going out there to sell to these investors in exactly the same way as you would be selling to a customer. 8. How to Run the Meeting: in this video. I want to take you through exactly how you should be running the meeting. This first meeting with BC's to make sure that you get the most out of it and you establish your authority on their respect for you from the outset. And what I strongly suggest you do is that when you go into the meeting, you take control and you set the agenda and you set the timetable. And by doing that, you are putting them to send extent on the back foot. But you're also establishing the fact that you know you have an authoritative role at that meeting. You're not just turning up saying, What can I tell you about my business? The time I think you should laugh. This first meeting is 60 minutes. I think that's ample time without giving them too much time, because what you want to do is to keep them wanting Mawr to get really excited about what you've got to say, but to go away, leaving them hungry to have more on the easiest excuse to do that is to say, Well, I'm very sorry, but you know, we've allowed 60 minutes for this meeting I'm sure that will be ample. But unfortunately, have another meeting with another BC that we have to go to and immediately. You're putting yourself in a position of demand and you're creating scarcity. You're making your time valuable on that will give you the advantage. Don't waste time when you get to the meeting on pleasantries. Of course. Do a few introductions and sit down. Say, right now can I suggest this is how we're gonna You know, this meeting is going to go and then you crack on with it. So you you establish from the outset straight away that you're in command on You know how long you want the meeting to last. Now, the way I suggest you structure the meeting is that you allowed 20 to 30 minutes for your presentation and actually, you can keep it to 20 minutes. That's even better. But by all means, these things will tend to run over a little bit at the end of the meeting. As you'll see, we're asking the veces to come and justify to us why they think they would be a good partner for our business and you want to allow them about 10 minutes to do that and take the opportunity to question about that. Keep that that momentum going, ask them about you know who they worked with and how they work and some of the experiences . And, you know, is it going to be possible to get testimonials onto to due diligence them with their existing investors? They're investing, investing companies assed part of your G diligence so put, you know, make sure that they understand that they're being vetted. It's not just all about the money. Then maybe an hour, 15 minutes, a Q and A and a five minute wrap up when you're going through the presentation. Definitely keep to the timetable. Keep an eye on the flow of your presentation, and I generally our about two minutes a slide and do not allow them to give you prepare interruptive questions during the meeting. We just say very, you know, if they try and raise questions, can we keep questions for the Q and a session at the end? Because we do have a limited time. Don't let them sidetrack you or take you down rabbit holes, which means you're not gonna have enough time to deliver the information you want to deliver to them. Let me tell you a little thing about the 10 minute rule. This is a trick that I've learned from public speaking, and that is basically after 10 minutes, your audiences attention will wander, so you need to get it back again. So after 10 minutes, interrupt yourself and ask them a simple question. You know, are you happy with everything so far? And you're your break the flow and then they'll refocus. But it is important. Or maybe breaking and tell them a little story about something that reminds me at the time when and add a little human human element of it. And if you have to do this twice, if your conversation if your presentation goes on for 30 minutes, then do that. But be aware of the 10 minute rule because people's attention span without given a change of gear, we'll start to drift after 10 minutes. It always happens, and it happens with audiences when you're speaking, make sure at the end of your presentation you put the ball in their court and you get them to pitch their value added to you and you keep them at this for at least 10 minutes so that they get a very strong impression that they have to justify themselves to you, that you are interested in them as much as their money. And actually, you're more interested in them than their money because the argument can be made that everybody's got money. But what unique things have they got to bring to the table that will make them super interesting to your business? In the 15 minute Q and a session, I would keep the subject matter of the questions to the vision, the big picture to round stories to around how you're going to develop the business. But do not let the analyst take over the meeting. Oh, I see. You said that, you know the population is going to increase by 16% by 2030. Could you explain where you get that number for? No, that is a discussion for the due diligence meeting down the road here. We're talking about the business. We're talking about how we're gonna work together. We're not helping you build a financial model. And don't let them challenge you on the detail of your numbers. We've got all the numbers We've got a full pack of all the information on that, which is the appropriate time we can make available to you. Let's not disappear down a little numerical, not rabbit hole. We've got a very limited amount of time, and we got lots of interesting things to talk about. Keep them on the big picture stuff. When you wrap up, make sure you keep them wanting. MAWR hint that there's more to come that, you know well, we've only been able to discuss that. The basic model of this and there's so much more we'd love to tell you. But unfortunately, time is off the essence, and we don't have any more of it. But we can always come back and do this again in the second meeting, and we can get more deeper into some of these issues. You know, we're not being able to cover anything, but I hope I've given you a flavour. So you leave the meeting and you pull yourself away, creating again that sense of scarcity. But you're also creating interest because you're hinting at something and you're arousing their curiosity. But you're not telling the whole picture, and that will want them lead them to want to know more about you. Ensure that you agree concrete. Next steps either. This should be a second meeting. Maybe it's a site visit. Maybe it's a live demonstration that but you need to say, OK, what are we going to do? Next on? It will be subject to on internal discussion. The veces we want tohave about whether they want to have a second meeting or do the next steps with you. But you could basically look. If you are as excited about our business as we are, then it would be great. Let's agree what we're going to do next subject to your internal processes but have something concretely agreed. So when they come back and say Yes, we're interested that great. Okay, let's have that meeting or let's organize that site visit on. Make sure that you do leave them with the sense that there is momentum and you're determined to do something. Next. Ensure you leave on time. Don't let them draw you over because by pulling away on by taking yourself out of the picture, having delivered what you set out to deliver in a very well organized and structured way, you will only make them more interested in your business On the minute you say, Oh, we've got as much time as you need then. Actually, you're surrendering that, and you're making yourself sound like you need them more than they need you. And you want to leave them with the absolute impression that you they need you more than you need them. So that's how I think you should run this first meeting. And it's really important that you establish that structure from the outset and you stick to it. And if you do that, then you're going to create a much stronger impression and have much more authority and respect from them in the process going forward. And this will set you up particularly well for the price negotiation, which is going to come at some point down the road. 9. The Management Presentation: Now I want to turn our attention to how we actually put together this management presentation to incorporate the key messages that we've already discussed. But as you can see, they come from a different perspective both off the investor and off the story or trying to present and of the selling job you're trying to do. So you obviously want to start off with a title slide on the logo on. I've just given you a dummy here, but obviously you're gonna do this on your own format. And once you've gone over that, then you need to get into your opening on. What I need you to communicate is the big idea, your opening hook. So you literally say here is the big idea and you explain the core value proposition off the business. You're going to be pitching to them. You want to give them this image. This overview off, how you're going to change the world on, make both of you an awful lot of money, and you could start by saying, you know, if you could imagine or if you could do this or whatever whatever happens to be, but you're looking to solve the problem off a very large market, and you then explain your target market. And your tagline wants to be able to describe your business in a single sentence and deliver its unique benefit. So that is your opening slide, the big idea, and you're explaining your core value, your target market and your unique benefit. Then I think right up front you need to introduce your team. Now they're going to be a number of people with you, very possibly. Or you may be doing this solo at the meeting, and you obviously need to introduce them. Andi. You'll also need to explain your board of directors your key advisers on any gaps in your team at the moment who are future hires. But when you're doing this, keep focused. What you want to get across is the prior companies and start up experience that they have the education that they have that's relevant to the business and any prior exits, and I pose that they've achieved. So you're delivering the context of your team in the context that the investors want to hear it. You don't have to deliver them a long CV. This can literally be three bullet points per person and keep it very tight and very focused. Now we g o into the problem. And here is when your story starts and what you're trying to communicate is the history of your business on the funding you've achieved to date. But you want to do it in the context of your hero's journey. So how you started the business, how you've struggled, how you raise this, how you've overcome that, the milestones that you've achieved in communicating this, Then you need to really highlight the problem that your business is solving. Now you can wrap it up in terms of trends and current solutions, but you need to give them the context of why you've got to this point in time where your at this inflection point, where your business is going to transform the market because of the unique solution. But at this point, what you're talking about is the problem, the rial pain that's being suffered that you're going to solve. You want to go and explain how you came across it, give lots of specifics about it and really trying to show why you care very much about it and why you're doing this and spend some time deeply emphasizing the problem. Don't be tempted to whiz quickly onto explaining your solution, but set the context up off the past of your business into the context of the present off the pain that the market is suffering from. Because then the solution will become that much more, you know, unique and revelatory and be much more inspiring to your audience. So when you talk about the market opportunity, you need to explain why it's a massive problem. The market size, the customer pain, trying to explain it, not just top down, but bottom up. You know, explain that if you take into their umpteen customers and they like to pay this, and if you only have among share that, so do it both ways. But dont make great assumptions about what? It's a $1,000,000,000 market, and if I have 20% of it, I'm gonna have a $200 million company. You actually got to be a lot more granular than that. Do show that other people can solve the problem, do give ground and accept that there are competitors out there, but make it clear that they can't do it as well as you can. They can't do it as uniquely as they Aziz you can. So it's important that you really fix in your audiences. Mind that there's a very significant problem out there before Ugo and give them the reveal and explain what your solution is. When you're talking about the competition, I do go into some depth. Do go and explain who they your key competitors are, perhaps put together a competitive matrix showing that some competitors can deliver some features and benefits. None of them can deliver all of the features and benefits that you can deliver. Perhaps talk about how you expect the market to change going forward over time on may be a allude to some of the people who have already invested, perhaps mistakenly, in some of your competitors, because they would have done so much better to have invested in you At this point. Before you go into the detail of your solution, I think it's really helpful if you can bring your personal passion ambition into this. You've explained the problem. Now connect yourself to that problem. Why is it that you want to solve this problem other than money? What is really your major motivating force in wanting to do this. And if you can put some personal history into this and some personal personal feeling and some personal experiences into this, then they'll understand your you're doing this because it's something you deeply care about and you're passionate about. After all, you're probably spending 18 hours a day, seven days a week, living and breathing this business. There must be a reason why, other than just making a lot of money, you really want to change the world. So for me personally, this is important because and tell them now you can deliver your solution, but you need to make the value proposition extremely clear. And I'm actually giving you a pretty clear scripture. This is the core and the crux off the key message your driving home in your manager of presentation. So you explain now how you solved this problem and you want to try to give riel examples of how people are benefiting from your product or solution. However it is on will not come onto Ah, the video, the demos in a minute. But try to ground this in the light off human experience and you literally want to script it out as saying, You know, for these Target customers who are dissatisfied with the current offerings in the market, my product is new technology, new press agree. Whatever the new uniqueness is about it, that provides a key problem solution and then explain the features that you're solving. Unlike the competing products, which on then, you know, my keep keep all it has differentiating, keeping just which are so in this value proposition, you're very clearly setting out why your product or solution is unique. Why it's better than the best is, um, why you've now hit this wonderful solution, which is going to address this huge problem you've already outlined. It's important then that you communicate there that there are real barriers to entry. But try to bring this back to again human dimensions that you can talk about it in terms of experience. Why it's difficult for them to copy your I p. Your you know your software. You know you want to get across the way. You have proprietary intellectual property that, you know it is where possible, patented and were not appropriate to be a patented that you've actually got it protected that it's not easy to be copied. Why did customers bite? Explain some of the customer experiences. Get across that human element. It's important as well, that you communicate the ability to leverage and scale your business because it's unless you can scale. The business is not ever going to be able to grow is probably faster. You need it to, but at the heart of it, you're you're wrapping around human stories whilst explaining the barriers to entry. Because this is all about trying to make it as human a tale as possible. Think the hero's journey rather than just giving them an endless list of features and benefits. When you come onto a demonstration, it really depends on your product or service and how you're going to do this. If you can deliver a video showing somebody using about its service, that's great. If appropriate, you can actually do a live demonstration. It really just depends on what it is you're trying to sell. But whatever. Whatever you do, if you do a demonstration, it mustn't go wrong. Then you move on to talking about the business going forward, and here I'm trying to wrap up into two things. One. I'm trying to wrap up the future plans, but I'm also trying to put it in the context of the marketplace so that they can understand how your business is going to grow and how it's shaping and being shaped by the market forces around it. So you could talk about the economic forces, social forces and technological forces, Richard changing the market. But how You've got traction with your customers and real momentum going forward. And you can highlight this by explaining the milestones that you're going to achieve going forward on a very specific basis, that they get a very clear idea that you know what you're doing and that you have a clear plan. So talk about your future revenues and milestones. Do talk about your existing customers and some of your future customers. Explain your channel to market and that your marketing strategies they can understand how you're going to deliver that. Maybe talk about the partnerships or the distributors you're gonna be work with, but try to do it in a context that involves them. If you invest in this business with us in the future, you'll find that we're going to do this together. We're going to do that together. We're going to change the world together. So you want to talk about it? Is a Ziff. They're already part off the team who have invested in this business going forward so that they share the sense of achievement that you're trying to communicate on, that you believe you're going to achieve going forward at the end. I think it's really important to get across the message that you're seeking the right partner. You probably will have to explain or mention the rays that you're asking for. It is likely in any event, that if you don't mention in your presentation, they're obviously going to answer it. So, you know, we are seeking $10 million but at this point, I do not recommend you mention the valuation I e. What? The pre money valuation is off the business. Let them ask for that. Make it a discussion point. You know, we're looking at a range of something, you know, they're whatever you say, they're going to negotiate it. So at this point, don't put them off by pricing the deal too early. You know, as as ever, with any sales process. You want to get them bought into the whole thing before you actually tell them the price of the deal? Think about a car salesman. But what you do want to emphasize right at the end of your presentation is that you are looking for the right partner for your business. So you now, after your presentation, want to hear from them. Are you the right partner for us? How would we work together? What value do you bring to this proposition other than just money on? By doing this, you're setting up the discussion for the next part of the meeting, Which will they then be them pitching to you as opposed to them? Critiquing your presentation? Because what you want to do is to get into a much more involved discussion and relationship with them about how you're gonna work together forward rather than give them the opportunity at this point to just pick holes in your presentation and to show you how smart they are. They could do that at the second meeting. When you talk about or the dude allegiance points that they want to get checked off and covered. So that is the more sophisticated approach to the management presentation that I would encourage you to try to scope. Yes, you're addressing the points they want to hear, but you're also doing a sales job on them and you're keeping control off the agenda. 10. Defending Your Plan: At some point in your discussions with investors, you're gonna have to defend the business plan on the financial model you put together. And in this video, I want to concentrate on getting your mindset ready to make sure you come prepared in the right way to defend that plan so that you're not caught out. And this is an absolute critical part off developing your credibility with the investors. In essence, the first thing they're gonna want to know is what have you achieved to date on? That's both in terms off the business and in terms off the investors. The second thing they'll want to know is how you're gonna make money going forward on the third thing they want to know is what funding are you gonna need to make that all happen? So there's the core mindsets that they're coming from in detail. They really want to make sure you understand the complexities off the economics and the economics of growing a dynamic business that your vision for the business is realistic because they're entrusting you with an awful lot of money on what you're actually proposing to put together is something which has got so many moving parts. So many variables, so many day to day challenges that they really want to get confident that you've thought it all through and you've got the experience to actually manage it effectively. So they started the beginning and they'll want to understand your key assumptions, you know? What are they? Are they reasonable? Are they realistic on? They will throw somewhat if satchu so they'll be challenging you with saying, Well, what if that assumption doesn't come out? What impact will it have on the business? And you really do need to understand the detail off this. You'll have tohave, obviously an integrated financial model, which will cover the profit and loss account balance sheet in the cash flow. And as you change one, everything flows through your balance sheet must keep balancing on the model. Must not be circular, those air pretty basics. But having that model and actually having somebody within the management team running that model Onda wear of all the detail behind it is absolutely critical. If you haven't got a CFO, then it's almost certainly going to have to be the CEO who takes this on. But somebody in the management team has to be running and have control and responsibility for that model. They want to know what your burn mate is, and by this they want to know how much cash or burning every month. And if they understand how much money you got in the bank, that will give them some idea off what they call your runway, which is how far you can go out before you get a run out of money. And that's a pretty fundamental basic. That fact that you'll need to have command off and you need to be able to explain to them they want to know what your cap table is. And this is basically the list off existing shareholders on basically, when they've invested, how much they've invested in what they've got for it, so that they'll understand exactly who's in the news in the deal and the implications off dilution both for the existing investors and through the the the option plan before they come in and invest. So make sure that you've got your cap table ready. Then they'll turn attention to your revenue model so they will want to know in detail bottom up. You know what your pricing is going to be for your products and services. What do you think your average account size is going to be? What you think the lifetime value off a customer is going to be? These RL details, which will need to have at your fingertips and be able to justify to them and explain to them they'll need to understand who your existing key customers are, and they'll want to know how and why they actually want to buy from you what their pricing is, what cost your in curry and therefore, what your profitability is going to be. So it's this understanding off the PML account, from starting from the customer to the revenues to the cost to the prophet that you'll have to have blow by blow answers to Let's look at some key metrics now. Not all of these key metrics apply to every business, but whatever your business does, you should probably have up to about half a dozen key metrics, which allowed them to explain the key drivers in your business very, very succinctly. Now it may be the number and size of customers. It could be a unit sales. It could be in a new markets that you're entering. Your user statistics page views the global reach that you're achieving the unique visitors to your site, the registered users just description based. Whatever it is, it depends on your business. But you're you need to have in your outputs from your financial model those key metrics that you have control of them as they change. If you change the assumptions in the model when it comes to actually making money, Bell want to understand what you go to market strategy is. So what is your marketing model? How are you going to get sales? What distribution channels are you going to use? How you gonna work with partners? It's this this whole marketing strategy, which is absolutely critical. Now again, the CEO may have this if you haven't got a marketing director, but whatever it is, you'll need to explain how you're going to sell in your business model. You're have a pipeline off opportunities, and they'll want to know who is in that pipeline and how far developed it is. They want to know who your channel partners are, who help you get to those customers, and where possible they will want to take references from your customers about your business, and so you will need to have some existing customers lined up and primed to deliver those references when it comes to the funding requirement. Now look back and see and want to be able to see clearly who your previous investors were on the dates and the amounts of their investments, and that's really covered in the cap table. But you do need to have the grasp off the detail. Then it comes to the future. How much you raising now? This is a an area where they will challenge you on some very key basic assumptions, like why you raising this amount of money? They will challenge you on the valuation expectation, and I would encourage you not to get drawn too early into a negotiation on value. They'll want to understand the milestones you are going to hit with that new capital on the assumed burn rate that you're going to have to spend in order to achieve those milestones. Because if you take their cash in the bank and the look at the runway, then that'll give you some idea off. The pro former monthly burn rate that you're expecting on. They will want to know the postman evaluation off the last round. So is, you know, are you having an up Brown? I You know, if you're having a down round if you actually selling the valuation of the company lower than the previous around, the is certainly gonna have to defend that. So this is lots and lots of detail, which, if you're not ready to answer questions on you're going to come unstuck. Now, when it comes to the milestones, they'll want to know why you're seeking to hit those particular milestones, and you'll need to make it clear to them why those milestones are the right ones and why they're important. And finally, at the end of all this process, they'll want to know what your future funding needs are because if your business doesn't go into profitability and being cash positive at some further point, you're gonna have to do another round. Now it may come from them, but if it doesn't, then you will need to explain to them what the future funding needs are going to be because they will suffer. If they don't invest, they will suffer dilution from the next investor, and they will what to be very clear in their minds, how this is going to affect their returns and how this is going to reflect their exit strategy. So on your part, what you should be doing is turning the tables back to them as well and asking them questions because you'll need to ask them to explain to you what they're bringing to the table. And you'll need to say what you're expecting from a new investor and what you're expecting in the venture capital partner. But you'll want to get them to explain what value they bring to the table other than just money, and that's a really good way to turn the tables on them. If they really start to have a go at you at the detail of the plan on you, try to question you. In a way, this is trying to make them show, show you how smart they are whilst actually not being very objective about the business. So I hope this helps you to understand the importance off having a command off the detail off your business plan and off the numbers. Because unless you have this, when they sit down and ask you lots of detailed questions, the whole thing will fall apart very quickly. 11. What Happens Next: having had your first meeting with your potential investor. I want to spend a little bit of time just explained to you a little bit about the process of what happens next. So you've had your introductory meeting, and after that, the investors will go and discuss between themselves. The merits are on the potential challenges facing your business on really asking themselves the key question off. Should they take this forward because before they get anywhere near Teoh making an investment, they making an investment in you, there is a process that they will be following. If they're interested, then the next thing they'll want to do is to have a more detailed second meeting on there. They're going to go into a lot mortgage granular detail about your business and challenge you with a lot of questions. This will involve them having made an assessment off your marketplace and your business. Andi made a judgment about the effectiveness off the solution that you're proposing and the team that is going to deliver it. This is a deep dive examination off your business. On day will be expecting to take references on the team and from your customers so this meeting is set up so that they can ask all the questions they need to ask so that they can put this evaluation together and very often. This means that they'll then put a paper up to their investment committee asking for, at least in principle, approval to go ahead and actually consider making an investment in the business. So it's a really important meeting this. It's one for which you'll need to bring probably quite a lot of reference materials, and you'll need to help the analysts put together their models on your business on Don't awful lot of work, So be prepared for that. But if you have that meeting, it's a very good sign. Before they will sign off on investment, they will expect you to deliver another management presentation, toe all the partners in the business, and then that might involve them having some sort of camera and actually doing a multi site on Skype type or some sort of conference video course so that you can present to everybody . If they're not in the same location, it will complete their evaluation. And once they've done that, if all the partners are happy, then you will get investment committee sign off from the business, the VC, to at least put on the table a term sheet, which will be the basis on which they will be prepared to make an investment in your business. Now this term sheet is really a negotiation that point, but it's going to have, you know, lots of conditions attached to it. On. There may well be, as well a separate shareholder agreement, which influences at some of the things that that you can and cannot do in running the business without their approval or without their permission. So be prepared for that very often in buyouts, you get the shareholder agreement, and in the V C investment, you just get the investment agreement. But be prepared in case they do put a shareholder agreement term sheet on the table and ended. In any event, you are gonna have a negotiation phase where you thrash out the terms off this discussion. And, of course, don't forget, you may end up having a lead investor with several other investors, in which case of the lead investors doing his job, the other investors will have fallen behind the terms of the sheet the the term sheet. Before that, she submitted to you. So that's the sort of process you need to expect. More meetings, more due diligence, another management presentation. Quite a lot of negotiation around the terms of the investment. But if you can get through all that, then you'll find yourself with an investor in your business with cash and the funds you need to go forward and continue the development off your amazing startup. 12. Activity Create Your Own Management Presentation: now that I've taken, you threw away the things you need to know about putting your presentation together for BC's. It's time for you to have a go at creating your own presentation. So that's the project for this section. If you like a very simple one. I've given you templates in pdf in keynote and in Power Point so that you can work with those of, actually take the pictures out the power point and automate the files smaller. But don't worry too much about that. You can put your own images in as you like or not. It's entirely up to you. But what I'd like you to do is to use what you've discovered in this series of lectures, aunt, to create your own management presentation as if you were going to pitch to a VC. And, of course, then you can rehearse this and practice this with your colleagues so that you get it absolutely right and come the day when you need to do this. Or maybe that day is coming very soon. I hope you'll find this extremely helpful. So that's why it's really important to actually try this little project out to create your own presentation and to rehearse it on, then to see how it goes and see what you could learn from it. So that's it. Very simple little activity for you to do. I hope you find it helpful. It will reinforce a lot of the learning messages in this series of videos on I hope you do really well when you come to pitch your veces and they give you what you want, which hopefully will be very good funding on the fantastic partner for your start up.