Before you talk to a single investor, you have to build your pitch. This is not as complicated as many make it out to be. Even at the highest levels, it can be done on PowerPoint, Keynote, or any similar software. The best pitches contain about 10 slides (+/- 1 slide).
The key is to keep it simple and make sure that investors clearly see the “essential figures” they are looking for (these of course vary from investor to investor).
Using the example of a meal-kit delivery company, here are the five aspects of the type of pitch that will quickly lead to a signed term sheet.
The Problem-Solution Statement (2 slides max)
Keep this simple. If you can’t explain your problem-solution statement in thirty seconds or less, you should probably rethink it.
For meal-kit delivery, it’s easy:
Consumers don’t like to drive to the store shop for ingredients, but they like to cook and eat healthy at home.
We deliver meal-kits to people’s homes that contain everything they need to cook delicious meals, including simple recipe cards that anyone can follow. The food is fresher than anything inside a grocery store, delivered in perfect portions so there is no clean up, and is cheaper than eating out.
Opportunity Size (1 slide max)
How much money is spent annually in this industry? What kind of return can the investors expect to see? If everything goes right, how big will this business be?
This is where you want to talk about market size and expected penetration.
Let’s do some quick math to demonstrate how this works.
Let’s say our target market is the young, unmarried professional in a certain city. We know from Census information that there are about 50,000 individuals in this market.
We expect a 3% penetration, meaning that 1,500 of them will actually buy our product. If they each buy the $15 meal-kit once a week, we will make $22,500 a week. That’s $1,170,000 a year. Since it only costs us $7.50 to make and deliver each kit, we have a 50% margin, meaning the company will make a profit of $585,000 in one year.
Investors want to know what’s in it for them. You don’t need a complicated financial model, but you should include basic projections similar to the example above.
Proof of Concept (2 slides max)
Demonstrate that your idea has traction. You don’t have to be a profitable business already, but you do need to have some sort of evidence that someone will buy the solution you are offering. You don’t have to have any revenue, but having a few sales under your belt never hurts!
Unfair Advantage (2 slides max)
This is what really gets investors excited. What can you do that no one else can do? For a meal-kit delivery company, it could be having an all-star chef on your team, having an exclusive deal with a large food distributor, being a “first mover”, having an innovative delivery model, etc…
If you can’t explain your unfair advantage, go back to the drawing board and start over. Competition is a beautiful and brutal thing – you have to have a rock solid belief in your company’s differentiating factor. Communicating the unfair advantage is key.
Call to Action (2 slides max)
This is where you explain to the investors why their investment will accelerate company growth and what the next steps are for investing in your startup.
For example, if we can raise $500,000 for our meal-kit delivery startup, we can buy a warehouse. With warehouse space, we can double our capacity and double revenue within two years. If we don’t get an investment, it will take six years to achieve this.
After you explain how the investment will be used to fuel growth and, ultimately, increase profits for everyone, you can incorporate a call to action. This can be as simple as a sentence on the last slide of your pitch deck, like this,
To learn more about investing with “Boston Meal-Kit Delivery”, email us at Fundraising@BostonMeals.com
Remember to keep the pitch short and sweet. That said, you should be prepared to expand verbally on each slide if asked to do so.
Your pitch is the most important aspect of the fundraising process. If it isn’t great, you won’t stand a chance. The good news is that once you make it perfect, you don’t have to worry about getting it in front of the right people. Syntiq does that for you.
Have you connected with a few investors, but still aren’t sure how to get them to commit? Check out our guide, How to Get Investors on Board