Twelve Mistakes to Avoid in Investor Presentations

What follows is an article by Launch413 advisor, Jim Geisman.

Pitch: n. Slang for investor presentation. An event where one party uses their mouth to pry open another party's wallet.

For many entrepreneurs, a high point in a founder’s journey is the investor presentation. Entrepreneurs spend a lot of time trying to distill the essence of their deal down to ten or fifteen slides that can be presented in 15 or 20 minutes. Sometimes an investor presentation is even shorter than that (like at Valley Venture Mentors). Unfortunately, many times the presentations do not do justice to the business concept.

Here are twelve mistakes entrepreneurs make when presenting their projects. Avoid these mistakes so your presentation will be effective and improve your chances of raising money.

Field of Dreams  Just because you can build a product does not mean customers will buy it. Focus on building the business not just building the product. Investors care more about building businesses and the value of an asset than they do about building a product (or services).

Technologie Über Alles  Many markets, especially online ones, are maturing and attracting more and more customers with less and less technical knowledge. Make sure to focus on how your technology creates benefits that the customers will pay for. Companies win more customers these days with better marketing and customer focus, not by touting their superior technology.

Gold Plated Pistons  Automotive engineers and car racers care about the pistons buried inside a car engine. Most folks only care about driving the car. Make your product features meaningful, easy to understand, and obvious. If you have to peel away a lot of layers to get to any meaningful features, you may have a me-too product.

Following the Puck  A famous hockey player said his success was knowing where the puck was going — and being there at the right time. Too many entrepreneurs are following today's products and markets. Describe how your product strategy anticipates the future. If you want to lead, be out front with something others will want to follow.

Chinese Glove Fallacy  A glove-making entrepreneur once claimed he would build a "big business" by getting a small share of a huge market. Oh really? The devil is in the details. How will your product make its way to your customers through your sales and distribution networks?

The Rising Tide  This common mistake is related to the Chinese Glove Fallacy. While it is better to sell into a growing market instead of a shrinking one, growth markets do not guarantee success. Describe how you will differentiate your products, or otherwise create a competitive advantage, so you can grow with the market.

More Is Less  All deals consist of a lot of details. Don’t overwhelm or bore investors with irrelevant details. Effective presentations focus on a few details that are important to the deal. Keep it simple. Don't talk faster, instead get rid of excess information.

Put a Face on the Deal  Customers and companies are faceless. Everyone, including investors, like stories so talk about people using your products in their activities. Give your product or service character. Turn your company's products or services into a human interest story. Markets don't buy products. People do.

Let Mikey Eat It  In a TV ad, some kids wonder if a cereal tastes good so they let Mikey try it. Companies who rely on letting their distributors or other intermediaries do their sales and marketing are doing the same thing. Investors know intermediaries respond to demand and do not create customers. Make sure you can identify and sell your product directly at least a few times. Know the way so you can show the way.

What's the Deal  An investor presentation that doesn't describe what you want is a sales presentation that doesn't ask for the order. Forget ROI. Forget valuation. Describe how much money you want and how you will use it. Then ask for it.

The Empty Suit  No matter how great your acting skills, acting can't overcome a presentation that lacks substance. Investors look for presentations with substance, based on logic, delivered with conviction. Describe your deal with cold facts not with hot air.

Mouth Open Ears Shut  An investor presentation should not be a monologue or a lecture. If an investor asks questions or offers suggestions, listen carefully. Aside from common courtesy, you may learn something. You may also learn that the investor is watching how you react to being challenged or how you consider alternative viewpoints. If you have all the answers, make sure you are answering the right questions.

In addition to being an advisor at Launch413, Jim Geisman is a consultant to entrepreneurs and senior managers at business-to-business (B2B) companies, helping them develop business and revenue models that allow their companies to grow and get funded. He has a unique, detailed understanding of how marketing, sales, business development, finance, and operations work together to achieve success.

Jim consults internationally on issues of software pricing and deal structuring and works to help companies solve some of their toughest pricing problems.

Jim mentors at Valley Venture Mentors. He is also a mentor at the MIT Enterprise Forum of Cambridge, serving on their Board and running their start-up clinic for 10 years where he was exposed to hundreds of companies and their business plans.

Before starting his consulting career in 1982, Jim held marketing management positions at Tektronix and Apollo Computer. He performed the first throughput tests on the forerunner of the Internet when there were only four nodes.

Jim holds Electrical Engineering degrees from Tufts and an MBA from Harvard.