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So you got into a meeting with a seed investment fund. Congratulations ! But what now ? Well, of course, you’ll have to prepare your presentation and you have so much to say that you don’t even know where to begin. I know, I know, been there, done that. However, only a small fraction of what you consider to be of the utmost import really is.
So let’s get started …
1. Who are you ? Present the team
Your founding team is probably the most important asset you have at this stage. Does your team encompass technical skills ? Marketing skills ? Sales? Do you have experience in starting a company or are you just chasing a dream ? Have you failed before in starting a company ? What university did you graduate from ? What jobs did you have ?
These are all questions to which you may answer. Of course, you should pick the ones that are most relevant to your team’s background and to the current project. Winning a drawing contest in middle-school isn’t the best example.
Don’t lie, don’t bullshit, don’t stretch the truth and don’t tell half-truths. Just be brief and be clear.
2. What is the problem you’re solving ?
Everyone has ideas. If I had a penny for each ground-breaking, earth-shaking, revolutionary, the-next-Google idea I had, I wouldn’t have needed to start a company because I would have been stikin’ rich already. Ideas are worth precisely squat. Focus on the problem you’re solving and on how many people actually DO have that problem. Because they are you market and in the end, they will have to give you money.
However, your mind might not have initially focused on a problem. There is still hope ! Even if all you had was an idea, present it the other way around: starting from who needs it to how the idea emerged.
3. What is your unique solution ?
Here’s a problem for you: transportation.
And here’s my pitch:
Transporation. It takes too goddamn long, it’s expensive and it burns up fuel we’re running out of.
My solution? The portable teleportation device. It’s called the telePad. It’s like an iPad, only it can teleport you (together with itself) almost anywhere.
But hmmm… is it doable ? Not quite. Because I do not have the technology and it would probably take at least 50 years to have something minimal figured out.
So explain to your potential investors why your solution is viable, cost-effective and (most importantly) why you can do it – see this in relation with .
Also, you should probably give attention to how easy it would be for someone to clone your solution and your business. Investors care about that because they, just like everyone else, want to live under the illusion that they’re unique.
In the Seedcamp application form, there was a very interesting question that summarizes my point “What is the unfair advantage you have over your competitors?” Think about that for a second.
TIP: Viable answers do NOT include:
- “We came up with it first !”
- “My competitors are corporations. They’re slow like the Tyranosaurus Rex. As a start-up we’re fast. Velocy-raptor fast.”
- “No one else has the tech skills required for the job”
- “We have the best sales team in the country/region/city”
4. Monetization ?
Ok, so this telePad idea of your is going to save the world from the fuel-crisis. Let’s just assume that for a second. But how are you going to sell it make money off it ?
Do you want to sell the devices ? Or maybe sell subscriptions to the telePadNet ? Do you want to show banners on each teleportation screen ?
Essential TIP: Focus on just one monetization scheme. “But I have three ! Doesn’t that mean more money ? Isn’t that a good thing?” No and no. Having several monetization schemes doesn’t mean more money, it just mean you have no idea what would work best on your target market. For an investor, this probably translates into “He ain’t got a clue what he’s talking about, he’s just throwing some things out here”.
So focus on only one monetization scheme and argue that it’s the best possible solution. If you have a lot of users who aren’t willing to pay right away and a lot of content, go for advertising. Have you found a niche market and you’re quite sure users have their credit cards ready by the time they reach your site – affiliate marketing. Have you developed a high-quality service that people are just dying to have, aim for the subscription model. And so on …
Also, you should mention market size. How many people have this problem you’re tackling, how much money are they willing to pay, how likely are you to convice them ? Don’t just blurt numbers out. If you don’t know, it’s better you shut up. It would been even better if you did your homework.
5. A customer is worth 1000 users, a user is worth 1000 words
What you are saying is far less relevant than what your users/customers are saying.
Has anyone used your service/application/product ? What do they think ? Do you have testimonials? Do you have traffic reports for that precious content of yours ?
Real life feedback from real life users proves your worth more than your words can ever do.
If you have actually made 100$ out of your business, this increases your credibility ten-fold. It proves someone actually needs what you have enough so that they pay for it. This means it’s just a matter of time until you get a higher quality of service and a lot more users.
WARNING: Never, under NO circumstances, not at the price of your own life say “We have no competition”.
Even if you strongly think this is the case, do not utter those words or otherwise suggest the idea. Because it means one of two things:
- You have no idea what you’re talking about, you haven’t done any research beyond googling the product name you came up with.
- There is no need for what your building – at least yet. This is a big turn-off for any investor.
Do you research thoroughly, in an exhaustive manner. Maybe you won’t find your exact idea implemented in other products/business/services, but you will find similar approaches. Stretch your perspective as much as possible to find competitors, even if you think they are light-years away.
7. Prototype and amaze
Show investors your prototype, a sample app. Make them want to play with what you’ve built. It’s an extraordinary experience for them to be the first one to use something really cool. The prototype shouldn’t be about lots of features. On the contrary, stick to the minimal set of features and a nifty design. Everything else is bullcrap.
However, if you don’t have a prototype, you do have a problem. It doesn’t mean you failed, but it does mean you have no real feedback from the market, no one has tried out your idea and the investors should just … take your word for it … which they don’t.
Work on a prototype that implements your concept. Remember: minimal set of features. You can say you have a prototype when you’re actually proud of what it’s doing. Don’t delay this process too much, don’t always say “one more feature and then it’s ready”. Get it working, get it online, get users to play with it, get feedback. It’s more than enough for a seed investor.
So there you have it. I wanted to start out with just 5 tips for pitching seed money, but in the spur of the moment I came up with 7. If you missed my live typing this article and you want to see it anyway, you can find a recording of it here. Just follow the link and click the Play button.
Looking forward to your posting feedback and questions.
If you need support in preparing a presentation for a seed investment company, just Request a Consultation and I will help you.