Perfect Pitch Day
Why should you take great care to craft the perfect pitch deck? As a judge and/or a potential investor, I’m watching for the one or two really great ideas in any demo or pitch day event. Your little startup must outshine a dozen or more ideas of equal or greater merit to catch my attention.
You can be sure that the other judges and investors in the audience are thinking the same way. They are looking for any strength or weakness to make a quick decision about your new idea. You need to cut to the chase and convince them that you are the one that matters. That will get you the meeting that goes deep.
Realistically, you have 30 seconds to get our attention and 4-5 minutes to convince us that you have a chance. That's two steps. First, you have to connect with us emotionally. Second, you have to speak analytically to establish your credibility.
This dual aspect of pitch is even more important than ever in the spring of 2023. The very fresh Silicon Valley Bank drama underscores a turning point in technology investing. Liquidity has dried up. Concept by itself is no longer enough.
For the past twenty years, easy money has biased high concept over execution details. Sure, it might have been nice before to have a plan. But the seriously big money was going into big ideas and the great pitches that sold them.
It's different today. In a world of higher interest rates that slow down an inflationary economy, tech investments compete against assets with more certain returns. What does that mean? With less money available to fund years of unprofitable growth, you need to show a quick path to free cash flow.
Let's look a bit closer at the two aspects of a perfect pitch - quick emotional connection and analytical substance.
Your pitch needs to catch the audience's attention in 30 seconds or less. The first couple of things you say get us interested and give us a sense of your authority. You have to make an emotional connection, with your words and your images. The worst thing is to be boring, or self focused to the point of disrespect.
There are two things to keep in mind. First, you must identify the extraordinary problem being solved. Express it succinctly in words everyone can understand. A text readability calculator like Flesch Kincaid can help you keep it simple.
Second, match this text with an image (or video) that connects emotionally. it is said that a picture is worth a thousand words. That is true when the image grabs the "heart" instantly. For someone making a pitch, images that match the words are key to this instant connection.
The banner image for this article shows exactly how a perfect pitch day ends - a happy team and a check for $100,000. I supported this team of Hackathon Heroes as a mentor/advisor at the EOS Hackathon / SF in 2018. They had excellent engineering and sales. I helped with the pitch.
After you grab our attention, move immediately to establish your credibility. We really need to know that you are going to execute quickly, strategically, and relentlessly towards your goal.
As Warren Buffett has said, smart investors look for the rational manager that they can trust. They want to see that a leader knows the right thing to do for any situation they find themselves. And be sure, good investors know your situation because they have walked your path.
There are five key factors they want to see. You may address them in the order that best fits your situation, but they must all be present in your deck. Those five factors are:
- Large market Gap where a critical market need is left unsatisfied,
- Unfair competitive Advantage that allows you to survive inevitable competition,
- Unique value proposition that gets your customer to write you a check and ask for a delivery date without haggling,
- Business model that delivers Gross profits and free cash flow
- Proven ability to Execute.
I've emphasized one letter in each factor for the memorable mnemonic GAUGE. For more background, please read this description of the GAUGE framework.
Now, we get to the creative part. Sure, you have a bit of structure to follow. You must connect quickly. But after that your pitch will follow the unique story path that works for you to get results. Why is this so necessary?
Startups are extraordinary capsules of hope and potential. they satisfy unmet need in the world and create new value. They are the win-win outcome from invested money in the hands of a few that unlocks unknown productivity for many.
They're hugely challenging though. What makes it possible is the people who join the startup team on its journey. Founders can't do it alone. They need partners, employees, angels, friends and family, investors, customers, and community.
These constituents need a story in which to believe, through which to create an extraordinary outcome. This story describes the vision of a future with created value, the path to get there, and the mission that aligns everyone involved. If that's not enough to get you motivated, consider these qualities of story that get results.
In summary, your story and how you tell it is the part that interests me most about your pitch. It's also the most difficult to do well, as it uses a unique combination of emotional and intellectual intelligence. So listen and apply the feedback you get at every telling of the story. Your new idea deserves the perfect pitch.