What Entrepreneurs Need to Know About...

October / November 05 By: Eric Billingsley Volume 3 Number 5

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This is the second of a series on helping the entrepreneur put his or her best foot forward during the process of securing funding.

You made a successful 30-second elevator pitch to a venture capitalist. In that brief amount of time you captured his/her interest by communicating who you are, the business idea and/or technology, the market potential of your technology and the plan for making money.

The VC invites you to make a more in-depth presentation. Excited, you begin planning your PowerPoint presentation, thinking all the while, "If I can capture his attention in 30 seconds, unaided by technology, imagine how quickly he'll open his checkbook when I make an elaborate digital presentation."

Stop right here, because a poorly planned and executed PowerPoint presentation can turn-off a prospective investor and reduce your chances of landing capital.
The fact is, many entrepreneurs bury information that's important to the investor in a barrage of barely comprehensible charts, bar graphs, animation sequences, rainbow colors and fancy fonts. Most business people have also experienced the torture of sitting through PowerPoint presentations that are too long, too heady and stray from the main point.

After you've made a great first impression, your next objective as an entrepreneur is to make an even better second, third, fourth and fifth impression. And this requires continuing to clearly communicate the value that you and your business idea bring to the table.

PowerPoint, if used right, can be an effective tool for helping communicate your company's value to the investor.Here are some points to consider when preparing and delivering your presentation.

Content is King
First and foremost, remember that the objective of your presentation is to impart valuable content. In other words, you need to show the investor that you have a clear idea of how you and your business are going to make money.

PowerPoint is only a visual aid to help clarify and/or elaborate on key points in the presentation. When talking to potential investors make sure you clearly and concisely address the following points:
—€ Your vision
—€ Market opportunity and how big it is
—€ Description of your product /service and how it meets a need in the marketplace
—€ Description of your customer
—€ Description of the competition
—€ The value proposition (e.g. return on investment)
—€ Marketing model
—€ Management team
—€ Revenue model/financial projections
—€ Track record
—€ Description of your business/technology's compatibility with the prospective investor

According to numerous venture capitalists, it's crucial for the presenter to make realistic financial projections, show an intimate knowledge of the customer by—€”if at all possible—€”including comments from prospective or existing clients, describe the technology and narrow the market down to the niche the business will serve. These all build your credibility.

Style Counts
Going overboard on the use of PowerPoint graphics, or not using graphics correctly, will distract the audience from the content. However style and originality are important to keep people interested and show a high level of professionalism. Some points to remember:

—€ Include original images that break outside of the bounds of stock PowerPoint art
—€ Limit the amount of text the viewer must read on each slide
—€ Avoid complicated graphs
—€ Make sure colors are complimentary and communicate the right message. For example do not use red text on a blue background because it's hard to read. Do not use red when communicating profitability.
—€ Fonts should be easily read by your audience and consistent from slide to slide. Limit the number of fonts to no more than three. For example, a 36 point font is used by many for headlines and a 24 point for text.
—€ Provide variety from slide to slide

The Presentation
The length and depth of your presentation will largely depend on what stage you are at in your relationship with the investor. An initial meeting may be a quick 20-minute overview, whereas later meetings may require delving into the more technical issues and last an hour or two. So plan accordingly. No matter what stage you're at, as the entrepreneur you need to make sure that you maximize your moment in the spotlight and respect the time constraints of your audience. Remember:

—€ Know the PowerPoint technology. Be sure the program works (prior to the presentation), assure that all power cords and connections are in place and functioning, and have a back-up presentation on hand. Be prepared to make the presentation even if the technology fails altogether.
—€ Use the visual presentation only as support for your wel-thought-out oral presentation. Develop a relationship with the audience versus the slide projector.
—€ Pace yourself. If you have too many slides you may feel forced to race through the presentation and spend too little time on important elements. Some say that 30-45 seconds per slide is about the maximum amount of time to spend.
—€ Allow time between slides for questions and answers because investors will likely have a lot of them.
—€ Avoid completely darkening the room. People may use your speech as an opportunity to take a nap.
—€ Time your remarks. Before speaking, give the audience a chance to first digest the information of a slide.
—€ Avoid parroting or reading straight from the slides.

PowerPoint presentations serve a couple of purposes in the investment world. First, it is a somewhat expected medium for making a fairly complex presentation in person. It offers the investor a window into how you think in business terms, and can lead to future meetings and/or negotiations.

Second, and equally as important, PowerPoint presentations are often considered living and breathing documents shared among and refined by colleagues in the investment community. It is an executive summary of sorts, a first glimpse for many into your business idea. Neglecting to address important questions can lessen your credibility.

One needs to also remember that PowerPoint presentations are not always necessary or appropriate. For example, if you are invited to lunch with a potential investor, chances are he/she wants to get to know more about you as a person. Breaking out the laptop to discuss the market will likely be a cumbersome and inappropriate distraction from that mission. If you are given a five-minute window of time to pitch your business, don't even think about using PowerPoint.