How to Structure your Funding Pitch

An impressive pitch deck is key for acquiring funding and it’s a must if you want to convince an angel investor. Here at Sciencer, we work with our clients to translate and frame their ideas in a way that the conversation with investors can be initiated.

Below there is an example for a strong presentation. 

You will have around 15-20 minutes to present, so make sure that you respect the time and don’t make the classic mistake of doing all the talking. Listen to the responses, and consider what is behind the investors' questions.

Here’s what to cover in a funding pitch and/or presentation:

 

1. Introduction

Use your first slide to summarize what your presentation will cover and give an idea to your audience how the overall structure looks like.

 

2. The problem

Describe the problem you are trying to solve, show them the gap you have identified in the market and the market position today.

Remember, you need to know your market! That includes having an understanding of the key players, and of the various different channels to market.
Where the market will be heading in the future, and how to stay one step ahead? How does your solution fill the gap? Be ready to answer these questions.

 

3. Your solution

What makes your solution unique, or better than what others do? Explain why you have the only product in its class that can solve the customers’ real problems.
Back it up with your proof (track record): your sales history, testimonials from real customers, or competitor analysis defined by credible sources. Be specific about the product category, the target buyer, and how you are distinct.

 

4. Competitive position

Identify how customers can solve their same problem in another way. What are the substitutes for your solution? 

Bringing a competitive landscape from an insider’s perspective to the table shows that you have a deep understanding of your target market and customers. What are the customers’ options, and how do you compare? Make sure you demonstrate this knowledge!

 

5. Your team

Introduce the members of your team and demonstrate everyone’s industry knowledge and expertise. Investors see a company’s team as critical to driving the business forward and making it a success.
Talk about your vision, what makes a successful company, and how can your team deliver it? What about advisers or non-executives on your board – who are they, and how does the board function?
If you are the founder, are you ready to step aside and appoint a new CEO for the next phase of growth? This may be the hardest question to answer, but may be one of the key questions, so make sure you’re prepared.

 

6. The business model

Explain how your business has been operating from the beginning to date, and how funding has been sorted. What business model have you chosen to produce the company’s revenue?

Disclose any plans to change the structure of the company, and any significant risks that may impact upon investors.

In case your products/services aren’t ready to sell yet, then what do you have to do to reach that point? List any licence deals which might be necessary, and how much they cost.

Let the potential investors know the most important or difficult challenges you face, and how you plan to overcome them. Investors look for openness and honesty – after all, they’re not only investing in your company, but also in you and a lasting relationship if it all pans out.

 

7. Back up your research and key forecasts

How much profit do you realistically expect to make? What is the annual revenue for the next five years? What amount of money is required to take the company to the next level of valuation, and when do you expect the next investment round to take place?

It is vital to explain the key assumptions behind your statements and forecasts, without forgetting that these have to relate to market forecasts. Crucially, tell the investor when and how they will get their money back.

 

8. Valuation and investment required

Investors will be curious how you have valued your company, and what you are looking for in terms of funding. Be clear about how much money the founders have put into the business.

Have the directors and advisers invested? Explain how you reached the figures for the valuation for this round of funding, and what you are using to calculate the valuation for the proposed initial public offering (IPO) or exit.

Investors need to have an understanding of the cash requirement, and need to be aware of what happens if conditions change – for example, if the product is late, or market adoption is slower than you predicted.

 

9. Your key milestones

Outline key milestones. Can you demonstrate your track record for hitting them when working on similar projects? Will you have to hire people to reach these targets?

Be prepared to answer the question: “How will you succeed where others have failed?” Be positive, and explain how you will handle any emergencies that may arise.

 

10. The business exit strategy

Remember - Investors are only in it for the return, so you showcase a credible route for them to get their cash back – and more.

Use this slide to explain why competitors cannot just step in and grab the market. Let potential investors know why this is the most exciting business opportunity that is worth their while.

Obtaining investment is also driven by supply and demand – the fewer opportunities around, the more likely you are to be successful. Timing can be key.

Adapt the pitch to your company’s needs, and take into account your development cycle and the type of money you are seeking. Whatever you do, always put the strongest points first, and expect to be challenged by potential investors.

 

Source: Startups.

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