Early stage investor
What makes a good pitch?
For the first investor pitch you typically get max an hour – make sure there is enough time for questions and conversation (60/40) – think of investor pitches like a date. They want to get to know you --- if they are interested, you will get more time, but first you need to get them hooked. Typically, they want to follow your business for a period of time to get to know you and see if you are succeeding with your plans.
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Keep it short and to the point!
There is this saying about being able to write down a business idea on a napkin. For many years I met with my co-founders of the first company I founded back in the 90es with 4 great guys - the five of us were 'Pentamind'. Besides eating a lot of good food and drinking grappa, we also had the 'napkin-session' at the end of the dinner. Who would come up with the next big idea? And you had to be able to explain it on a napkin. It's a fun exercise as it forces you to keep it short and to the point. There is not a lot of space on a napkin. Fun fact: actually a few of these napkin ideas became successful businesses.
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Here a a few pointers that I myself have found useful when pitching to investors.
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Remember you are pitching your business and not only the product/solution. I often meet founders who are so focused on their product that they forget to look at it from an investors point of view who also want to understand the business model and the problem you are solving on a broader level.
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Investors want to know why your business is a good investment, so market size (TAM/SAM/SOM), USP,
competitive landscape and a plan to succeed should be included
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Include relevant business KPIs that the business case is based on, eg. for a SaaS business include CAC, CLV, CLTV, Churn, MRR, ARR
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Use of proceeds - include a plan for what you need the money for – and where does it take you. Include high level financials and a timeline.
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The team – who is the team responsible for making it a success? The team is what investors buy into! Do you have the necessary, relevant and complementary competences to succeed?
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A structure could look like this:
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Why [your business] and why now? (the problem & the solution)
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The market: whom are you solving a problem for and how many (ICP & market size)
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Competitive landscape & differentiators (value proposition)
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Business model
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Financials & timeline
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Founders/the team
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Curious to take a look at some other investment decks? Here are a few examples of early pitch decks including Airbnb before they became billion-dollar company.
Why do investors invest?
Obviously, investors are looking for a return on their investment but when looking at a case they are also looking for companies that fit their investment strategy - and as a founder you should also be critical and look for investors whom you believe are the right to help you scale and succeed. The best investors don't just bring money but also experience, network and brain capital. Finding the right investor is matchmaking. There are many different types of investors investing in different stages of a business and with specific investment strategies. As an early stage investor primarily investing in digital companies, here's what I'm looking for:
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The idea! What problem is being solved? Is it innovative?
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Product /market fit – is there a need in the market and how big is the market?
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What does the market look like and who are the competitors?
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THE TEAM ! The most important to me is the team. There are so many great ideas, but only very few of them turn into successful businesses. It takes dedication, hard work, will power and an un-compromised will to succeed - that's why I only invest in awesome founders!
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Am I a fit? Can I as an investor help accelerate the business with my competences, experience and knowledge - and not just by bringing money to the table