Three Lessons Learned From Our First Investor Pitch
Kati and I pitched Kindara to investors for the first time last week. And while I'm obviously no expert, I did learn a lot from the experience. Here are my top three lessons learned from preparing for and delivering our first presentation-style investor pitch: Lesson 1: Be Entertaining, Engaging and Tell a Story.
For an engineer-type like me, this is challenging. But since your audience took the time to show up, you owe it to them to be at the very least entertaining. Be self-deprecating, tell a joke, share something personal and most of all, be excited. The energy of your audience will match yours. Luckily, Kati and I are very excited about Kindara and I think it shows, so we tend to have this base covered.
After excitement, it's important that the presentation hooks the audience within the first 10 seconds and tells a cohesive story from start to finish. It's best to carefully design what you say for each slide so that you gracefully transition from slide to slide and only give information that supports the story. Unless you've been pitching your business for 5 years, you cannot wing this, it takes time and iteration to get it right. Thanks to David Rose in this TED talk for making this clear.
The story you tell needs to have a beginning, a middle, and an ending that ties it all together. For a pitch, I've found that a good ending is a one sentence wrap-up at the end of the presentation that summarizes why your business is 'the coolest'.
It' also important to stay focused and be concise as you go through the slides: tangents distract you and your audience from your story and there will be time for potential investors to bring up tangential details that are important to them during Q&A. Adeo Ressi's Madlibs for Pitching offers a good rubric for coming up with your one-line opener or closer.
For our current deck we followed Guy Kawasacki's recommended format with a few tweaks. The story progresses as follows: the problem > the solution > our technology > our target customer > customer acquisition > market dynamics > our revenue model > our competition > our team > our future (projections) > our progress so far > our current ask.
If you have told your story effectively, someone watching your presentation should be able to tell you what the story is. Ask them. If they can't tell you, you have some work to do.
Lesson 2: Use Pictures and Graphics and Almost No Text on Your Slides.
It's been said a million times: writing a paragraph or bullet-point on a slide and then reading it out loud does not a captivating presentation make! It's best if the intent of each slide is to create an experience for your audience that would be impossible for you to create using only your voice. The slides should invoke curiosity around what you are saying in a way that excites and entertains the audience and creates in them a desire to know more.
I admit that in the early versions of our deck we were extremely guilty of this cardinal presentation offense and had slides that looked like this:
Now when we say "Kindara is a system of software, hardware and online support that allows women to practice effective, hormone-free birth control or get pregnant naturally with no medical procedures or side effects", the audience can better understand from the graphic that Kindara combines software, hardware and support in an innovative new way. Hopefully our potential investors start wondering how we do this, which is what we want....because the next slide is about our technology and answers this question.
So based on this experience, my recommendation is to remove all the text from your deck and think hard about what pictures or graphics could help you make your points faster, or tell your story better. Our new graphics-dominant approach was very well received last week at our Founder Institute graduation pitch.
Lesson 3. Practice Your Presentation At Least 10 Times and Solicit Honest Feedback.
This is common sense. But even so, I want to say that the feedback we got from our advisers leading up to our pitch massively improved our deck. There were also some unanticipated benefits from practicing that I'll talk about below. Practice makes permanent, so make sure you're making changes to improve your deck each time you show it and you'll be amazed at how much better it gets.
One practice tip is to make it explicitly clear before your practice run that you're open to any and all feedback, and then re-iterate that there's absolutely no need to be polite or worry about hurting anybody's feelings. This ensures you'll actually get the most honest and useful feedback. After all, if you come off as nervous or cocky or confused, you want your advisors and friends to tell you before you are in front of investors. And also because the investors will never tell you (on the chance that you are the next Mark Zuckerberg). I keep getting told that I'm "a bit rigid" while presenting, so I'm working on it. Maybe salsa lessons.
I recommend you show the deck to people who have skills and knowledge in diverse areas that affect your business. This will allow you to make sure you're strong in all areas, and help to identify any ambiguities, abbreviations, mistakes or falsities that will detract from the arc of your presentation. Show it to someone who understands the science, the market, the technology, the customer, the IP strategy, the problem, the subject matter, etc. and implement the feedback you like into your deck. Remember, "In diverse council there is wisdom".
Some more reasons to practice:
a. It helped us identify words and sentences that are really effective at connecting with our audience and communicating our ideas. You have to practice out loud in front of an audience to find the words and sentences that feel right. Once you find them, keep them.
b. It helped us identify words and sentences that created traps, contradicted something we already said or were about to say, sounded lame, or created a disconnect with the audience. Again you need to practice so you know what not to say.
c. It helped us identify parts of our presentation that were strong, and parts that were weak. We examined the weakest parts to figure out why they were weak and made changes so they now have the effect we want.
d. It helped us eliminate the unconscious use of meaningless words and distracting habits. Useless words like "umm", "maybe", "kinda", "probably", and "like" should be hunted down and terminated. Same with useless or detrimental phrases like "I hope...", "We have funds loosely committed", or "I should probably...", all of which I heard in the pitches last week.
As an example, Kati pointed out that I kept saying "around $130" when discussing our pricing model, which came off as wishy-washy. So now when I get to that section know to be concrete.
e. It helped us get comfortable presenting in front of people. Distracting habits like twitches, ticks, facial expressions, un-natural use of your hands, and who-knows-what-you're-doing are invisible until somebody tells you about them. Unless you practice in front of someone willing to give you brutally honest feedback you won't be able to identify and correct these peculiarities. Basically you want to avoid doing anything that weakens the case that your idea rocks and that you are the person to make it happen. Maybe you ARE the next Mark Zuckerberg?
As an example: my Kati pointed that I shouldn't make an "I'm putting this in my mouth" gesture when explaining that our thermometer measures oral temperature. I thought it helped, but she told me it just looked weird, so I scrapped it.
e. It helped us practice answering questions. Like most investor sessions, our pitch included a Q&A after the presentation. I felt relatively unprepared for this section as we didn't practice taking questions in our pre-pitch practice sessions. Based on this experience, I recommend that before you pitch, you line up a few of your advisors or friends and have them ask you extremely pointed and blunt questions for an extended period so you can practice giving intelligent and enrolling answers. You want to come off brilliantly in response to all manner of insightful and/or funny and/or awkward and/or downright stupid or insulting questions about your business.
The goal with answering questions is to give the investor the information she is requesting, while at the same time removing any unspoken objection that might lie behind the question. You want to be able to do this without directly contradicting anything contained in the question itself (i.e. don't tell the investor she is wrong) and without pissing anybody off. This is easier said than done, so you'll want to practice it. We were a little weak on this last week so we''ll be practicing questions before pitches from now on.
And lastly, it's useful to practice talking TO the audience. Any public speaker will tell you the proper way to address a crowd is to speak directly to people in the crowd. This means you'll want to become comfortable making and holding eye contact with people in the crowd as you explain your ideas. Eventually you'll want to be able to spread your eye contact around the room (so everybody gets some attention if possible), and do so in a way that feels natural. If you haven't done it before, this is a whole new skill in itself that requires practice. Again, easier said than done, and personally it still feels weird to me.
And those are my 3 lessons learned from the preparation and deliverance of our first investor pitch for Kindara. To recap:
- Be engaging the tell a story.
- Use pictures and graphics to communicate the story, and
- Practice the heck out of it!
This process worked for us last night: we got positive feedback from the group and generated a followup opportunity to pitch Golden Seeds which seems a great fit for us. I'm sure I'll be learning many more (less obvious) lessons about pitching investors in the months ahead, so stay tuned. Onwards and upwards.