Each year, 25madison sees nearly a thousand early stage business ideas. What’s unique (versus other VCs) is 25madison is a Venture Studio – a company that builds companies – and in building companies we not only see presentations, but we create them for each of the startups we build. This gives us a unique perspective on not only what it takes to persuade, but what it takes to be persuaded.
Investors want to feel confident in their investment.
There’s great content written about persuasion (see Cialdini’s Six Principles of Persuasion) but with your investor audience seeing as many as 1,200 deals for every 10 investments (yes, it’s that many!), it takes more than persuasion to get attention. At 25madison, we focus on building confidence – confidence that a BIG business opportunity exists. Confidence in both time & resources across each phase. Confidence that we are the team to do it.
So what’s it take to build confidence? Here’s 3 insights we’ve found in the process.
1. Above all, tell a good story 🚀
The heart of a pitch is the content, and to telling a compelling story about your vision will get everyone in the room pointed in the same direction as you. A great story builds investor confidence that there is indeed a problem, and you’re the right team to tackle it.
So what makes a good story?
Have a real, demonstrated problem. The problem your business is solving is as important as the product or service you are selling. Is this a REAL problem that will affect a large audience that can sustain a business? Are the conditions around the problem something that can be solved by your business? Are there other businesses out there that could pose a problem? And are you solving the problem in a different way?
Understanding your customer and the world your business lives in tells us a lot about how much you’ve invested in the long-term viability of your business.
Create a story arc.
Just like any movie, book or song, your pitch needs to bring people along a journey that keeps everyone interested.
Build context around what the business is trying to tackle by putting the problem up front. This gives us a villain from whom you are there to save us. To get people interested from the jump, find a way to bring in your strongest trait early on (more on this later on).
Your slides should feel like they are building on one another in an intentional way, bringing us from one point to another to build a more compelling case on why you are right to solve the problem. If you jump from topic to topic without any connection between them, you’ll lose the room.
Culminate with something memorable. Leave the room with a synopsis that is concise and easy to remember. Whether it’s a line that brings it all together or 3 easy to remember points, remind us why we should remember you and your business.
To help you tell a cohesive story, we always like to start with writing out the script for the story before building the deck. This helps you focus on how each piece leads into the other.
Added bonus: now you have your script ready to go for when you get in front of investors.
Want to see how others did it? 20 examples of successful company pitches.
Have near-term focus, with long-term vision.
Your pitch should clearly paint a picture of what you have accomplished to date. Convey how much work you and your team has already committed to arrive at where you are. We want to understand that you’re willing to work hard and invest the energy necessary to be successful. But put that in context of where you are going. What you’ve already built should be able to show a pathway to where you see your business going in 3-5 years.
We want to feel confident that you’re in this for the long haul.
Here's a checklist for everything you should have covered:
- Underlying Magic / what sets you apart
- Why now
- Market Opportunity
- Business Model(s)
- Next steps / plan
2. Traction can be demonstrated in different ways 📈
Not all startups are the same nor should be your pitch. Depending on your business, you’ll need to pick where to focus in your pitch and story. Couple that with the fact that most audiences tune out after 7 minutes, and you’ll want to focus on where you win.
Show, don’t tell.
So you have your story, now it’s time to show it off. The tricky thing with pitch decks is that they need to straddle the line between actual presentations – stimulus to support a live storytelling – and as a leave-behind. Truth is, the decision makers / investment committees will more often than not judge your idea solely from your Docsend. So make sure your pitch reads well and presents well.
Brand vision and visual design can fill in the gaps where products are not yet built or teams not yet assembled. With Canva and Pitch, or a few hundred dollars through Upwork, there’s no excuse to creating a ‘good’ presentation. At 25madison, we benefit from having brand strategist and creative directors in house – that means we can create attractive brands at the earliest stage. With a great brand, we see a correlation to better success fundraising, and better outcomes when we go-to-market.
A strong brand & vision gives us confidence that the product will be attractive to future customers.
A product built is better than a product imagined.
Better yet, if your product has real people using it, or real revenues, make that the highlight of your presentation.
In fact, we’ve invested in several companies that had amazing products and teams, with little brand or not even name. We did that because numbers don’t lie.
There’s no better way to have your prospective investors leaving confident than showing real product traction – through numbers. One way to show (and get) traction is to build and validate a minimum viable product. Take your concept live through developing test brands and social presence, and use that to conduct research or media tests. Get both qualitative and quantitative feedback. Here's some of our favorite tools.
Having a simple website and company email to go along with your pitch gives investors confidence that you are full steam ahead on the idea. There’s dozens of website builder templates. Pick one and build away.
At the early stage, we are investing in people + ideas.
The reality is that most early stage companies don’t have product-market-fit figured out – that leaves us investing in the team surrounding an idea.
Assembling an amazing team willing to quit their jobs and work on your early stage business, speaks volumes. It also shows that other people believe the vision. Introduce yourselves so we can get to know you as people and understand the diverse perspectives that each team member brings to the table and the role they play. We care more about people we are interested in.
If your team includes serial entrepreneurs, amazing talent seldom found elsewhere, we suggest you lead your pitch with the team. Winners keep winning.
3. Your presentation only gets you in the door. You need to deliver it. 🔥
Like Alan, everyone needs to practice. Your company pitch is no different.
Deliver a presentation.
Yes you have slides. Yes we know how to read (please don’t read them to us). What we don’t know is who you are and how you are building this business. Founders reading from their slides and not ‘reading the room’ is one of the biggest no-no’s we see all the time.
The best way to deliver the presentation is to actually practice delivering it. Practice with your co-founders. Your Family. Your pet Axolotl.
Practice with the slides. Then practice without the slides (who knows if your PC will suddenly bluescreen from zoom sharing). Time yourself. Record yourself!
And finally, be ready to answer questions about the areas you are deficient – with a plan to mitigate them. Every startup has MANY unanswered questions. Our advice: write them down in one column, with your plan to address in the other column. It’s better to acknowledge that you know the risk/issue and that you have a plan to mitigate it versus not knowing or just faking it.
If you’re confident, we’re confident.
And if you do get hung up, it’s okay to simply acknowledge the question and promise to follow up after the meeting with more information.
Every person in the room should have a role.
All too often we meet with co-founders where one is the focus of the presentation and the other takes a back seat – to us serving no purpose for the conversation (why is this person even here? Are they really involved in this business?).
It’s OK to have one co-founder take center stage (probably even more efficient to do it that way), but the other co-founder should still have a role.
Pro tip: Set up the role in your Intro. Hello, I’m <insert your name here> and this is my co-founder <another name here>. For efficiency, I’ll lead the majority of the presentation and <another name> is here to answer questions on XYZ topic if they come up.
Perfect. Makes Sense. Efficient with our time.
Finally, be real & know who you’re talking to.
Each time you present, your pitch should be tailored to the audience – whether it’s to investors, judges of competition or even prospective employees – your story should be made relevant.
Be ready for the question “How can we help?” Entrepreneurs always want to help other entrepreneurs.
Be real. Your audience wants to know you, and know that working together will be successful, exciting, and fun. If it’s not a match, that’s fine – let’s own it and move on. If it is a match, that’s awesome - Time to Do Big Things.
Good Luck! You got this. 💪
With a founding group led by Michael Lynton (Chairman of Snap and Warner Music Group), Steven Price (Founder of Townsquare Media and serial entrepreneur), and Matt Fremont-Smith (COO of Goldman Sachs Bank), we came together in 2018 to build 25madison — a venture studio that incubates companies from the ground up and invests in early-stage companies from its offices in New York City, Miami, Atlanta, and Tel Aviv. For more, see www.25madison.com.