I arrive in Atlanta flying Southwest flight 2629 from Denver to meet my clients and watch their first presentation to a group of professional angel investors.With my Orvis overnight bag and a large black accountant’s case, I jump in a cab and race to listen to my clients’investor pitch. They asked me to come to the meeting so I could talk to potential investors about the details of the strategic plan and use of cash. They are, Peteran environmental scientist, and Philip, a computer expert. Peter and Philip are the founders of a British SaaS computer company coming to the USA once the capital is raised.
Soon my cab pulls into the drive of the most beautiful country club in Atlanta, the Cherokee Town and Country Club. It is clearly spring; I hop out smelling the Azaleas and listening to the doves. The two-day event is in the country club’s meeting cottage, and its parking lot is filled the exotic cars of the investors attending the meeting. My eye catches the new Porsche electric – a black-on-black Taycan. Nearby, is a new Land Rover in British Racing Green with tan interior. If nothing else, I can talk cars with this group.
Carrying the case with my detail edinvestor material, I race into the garden court and find 20 angel investors in business casual dress. Across the roommy British clients in their double-breasted dark blue suits, French ties, and Italian shoes talk to Tarby, the president of Sweet water Capital Corporation. Tarby has invited 40 highly desired angel investors to the weekend event—20 on Friday night and 20 on Saturday night. Tarby brings the investors together charging the start-up companies a sizable fee to find serious investors who can help withthe companies’ future. My clients’ plan is to raise the $2 million needed to bring their environmental analysis software company to the USA.
The wine is delightful and the special Southernhors d’oeuvres are being enjoyed by all. However, there is little time to chat as the first company is presenting at 7 pm. Peter and Philip are second.
I grab a glass of California Sauvignon Blancand fill a plate with fried green tomatoes and Coca Cola glazed chicken wings (remember this is Atlanta), and sit in the back of the room behind the investors. I am not a presenter; in fact, I have not even seen their PowerPoint investor presentation. I developed the detailed strategic plan and operating plan to bring their company to the USA. And, I created all the legal documents to share with potential investors. At my table, I open my case and layout, in neat folders,the Private Placement Memorandum, the Investor Suitability Questionnaire, the Subscription Agreement, as well as all the details of the operating plan.
The 20 angel investors, each at a separate table,sit in front of me with their Tumi brief cases and Kate Spade satchels. The organizer has done it before and makes it work perfectly. The process is well-defined. The first presentation starts at 7pm. Each presentation lasts 20 minutes with 10 minutes for the question-and-answer period. Then a 15-minute break before the next presenter starts. Tarby tells every presenter the detailed timetable and enforces the rules.
At 7:45 Peter and Philip start their 20-minute presentation to be followed with a 10-minute question-and-answer period.
Crisis — 7:50 the problem is clearly present.The pain starts.
In just 5 minutes, 4 men leave the room. Three women busily text and are not paying attention. My consulting work had not included even a review of the investor pitch. I had not seen or heard the presentation. But I could seethe “wheels falling off! “Right before my eyes, I could see no investors found interest.
Peter and Philip, sharing the podium, continue presenting 28 PowerPoint slides and push the presentation well past the scheduled time. They had talked for more than 30 minutes, into the allotted question-and-answer period. Eventually Peter asks for questions.
The Crisis and The Pain are Clear—Not one question.
Peter and Philip look a little dumbfounded as they pack up their notes and look across the room for questions or any kind of communication. Nothing. No one speaks and no one cares.
As the room prepares for the next presentation, I walk up to them and say. “I will meet you in the bar,” and move quickly down the hall.
I find the bar and order three Knob Creek bourbons—doubles. A few minutes later they join me. I say, “I know your guys are scotch drinkers but we are drinking American bourbon tonight–Knob Creek. Abraham Lincoln’s boyhood home was on Knob Creek and he is key to our discussion of the crisis you created.”
Peter and Philip say almost in unison, “We do not know what happened. This presentation worked perfectly with bankers in London. What are we going to do—there is not one interested investor tonight!”
I had been hired to work on the details of the 5-year strategic plan and present the plan details and the legal documents to investors. I had never seen the investor pitch before.
They drink their bourbons. I say to Peter and Philip “You know me. We have worked togetherfor months and based on customer research we developed an excellent strategic plan showing the details of the USA operation and the detailed use of cash. I think we know each other and trust each other.”
With their trust, I let it all hang out and say,
“This is a terrible presentation and you have two choices:
#1 you can present the same material to the Saturday night group. And, I will buy you a nice steak dinner tonight and we can get drunk.
#2 you can hire me, starting right now at my normal rate, to teach you how to make an investor presentation. We will work all night in your suite and order room service. I guarantee, if you hire me, you will get more questions, more positive inquirers, and more follow-upthan you got tonight.”
They hire me, and we get in their car and head to their hotel suite. On the way, I sit in the back seat and tell them,
“You lost the investor group in the first 2 minutes.
They do not know what you do.
You did not relate to their needs.
And you stupidly left no time for questions or engagement!”
Our Knob Creek bourbon at the baris to remind them what a great speaker Lincoln was. I tell them the Gettysburg Address is 271 words. And I tell them their PowerPoint presentation has 1,051 words on 28 PowerPoint pages.
I stop by the front desk of their hotel and ask for a roll of masking tape and we go to their suite. First, we tape to the halls and mirrors and doors each page of the presentation and every page of handouts they had prepared—123 pages are now in view.
Then I say, “Look guys, you are not presenting to a customer concerned about the environment. You are talking to a new audience—angel investors—they have different needs and different goals and a different decision-making process. You may be experts at selling your environmental software but I am an expert at raising capital—25 successful capital raises for businesses, mine and my clients’.”
Then I give them two assignments—
Prepare a 60-second oral description of what your product is. This must be short, sweet, and memorable. Then I say, “Do you know what memorable means? It means once they hear it from you, they can tell anyone the next day exactly what you do. And tomorrow morning you are going to test this by having Peter call 10 people and read the 60-second oral description. Then one hour later Philip will call each person back and ask them to repeat what Peter said.”
Prepare a 10-slide PowerPoint presentation as follows—take the 120 pages taped up in your suite and create 10 PowerPoint slides, only 5 bullet points per slide. You are going to convert, eliminating much of it, the material taped up into 10 slides, with 5 bullet points each.
Then I share the 60–10 Technique — How to Present to Investors
It is very precise. In total you have 10 slides to educate and inform, no selling.Your job is to keep their attention and to draw the audience into questions. The pitch should take only five minutes. Yes, that is right “5 Minutes!” The presentation flow looks like:
What Your Product is – Oral description, 60 seconds, 3 slides
How it works – 3 slides
Are you sure of market — 2 slides
Proof you can do it – 2 slides
Secret whatever&wrap up – 2 slides
At the 5-minute mark— Question-and-answer period
Have handouts for all questions
I share the logic behind the technique.The 5 minutes is to inform.You cannot force engagement. After you share your passion and information, they will self-engage. Only in the question-and-answer period do you use all that detailed planning and research material you have worked so hard to prepare.If they are asking questions, they are engaged. Then you can work to sell them and to bring them into the company as investors.
I go on and say, “Look, you guys, normally the development of a good investor pitch presentation takes at least a week. You are going to do it in one night. With lots of short cuts, it will not be perfect. Remember four things–only tell them what needs to be said to lead to engagement, never tell the audience something they already know—it wastes their time, make sure every word counts, eliminate unnecessary words that are not needed to drive home your message, and respect their intelligence by sharing new information so they see the value of the product. This will lead to their self-engagement and to a yes or no investment decision. Your 5-minute presentation goal is to inform and to create an environment where the audience self-engages during the question-and-answer period.”
I see they have no confidence after the first presentation crisis. It would be the very best if we had started a week ago creating a great presentation. I make the decision not to stay and help, as I feel, even if not perfect, the raw emotion of pulling an all-nighter will come through and the angel investors will see it.
As I leave, I say “One last thing. You are not selling your new SaaS system. No one in the room needs your system. You are selling to the investor’s needs.The people in that room want to be part of a successful company and make money. By the way, you are not selling or showing off PowerPoint. Make the slides clean and simple. No action — No big color. Sell your business through clean logical bullet points–5 or 6 bullet points per page.
I say good night and tell them – “breakfast at 9:30 am. Bring laptops and we will fine tune.”
We meet for breakfast and I share a few ideas. They work the rest of the day fine tuning the presentation. Again, that night they are the second to present. Philip makes the 5-minute presentation, after being introduced by Peter. They tell the Saturday night angel investors that I am in the back available to discuss the financial details.
They start on time—hit the mark at 60 seconds with a great memorable message. No one would forget the first 60 seconds. They wrap it up at close to 5 minutes. They move to a very active question-and-answer period. All 20 angel investors engage with detailed questions, showing deep interest. The angel investors understand the company, the market, and the value of the business. As business cards are flying back and forth, Tarby, the sponsor, ends the questions. It seems like all 20 angel investors race to see me in the back of the room. They ask for details.
My approach–The 60-10 Technique works.The investors learn and self-engage through theback-and-forth question and answer interaction. The process is working. Peter, Philip, and I will go forward, over the next few months, moving the Saturday night angel investors to become part of the company.
The Crisis and its Pain Are Over — The Investors are Engaged.
Details: The 60–10 Technique. How to Present Your Company to Investors
The technique is only an investor presentation. First you must build your strategic plan and operating plan based on detailed customer research. The business plan must show cash requirements, and you must create your PPM with all the legal details. It takes weeks, and maybe even months, to bring a sizable investor into your company. The investor presentation is just to educate and start the engagement process. The goal in the pitch is to educate, lead, and move to engagement in a manner that is memorable. Remember the pitch is information. It is the follow up self-actuated engagement by the investor that will bring the capital investment to you.
A few background rules:
–Understand the investor decision process. Reach the investor’s needs and goals.
–Present the concept, your passion, the customer needs in 60 seconds. Must be memorable.
–Use simple language. No wasted words, do not tell them anything they already know.
–Design the presentation with 10 slides—5 bullet points each.
–Inform and lead the investors to engagement. Do not sell.
Now the details of the “60-10 Technique”–The name comes from 60 Seconds and 10 Slides:
The first oral 60 Seconds on the unique concept and the need the concept fills.
Then 10 Slides to education the Concept, the Proof, How It Works, Validation, and How You Will Do It
Slides 1 to 3: Concept: Needs. Your passion. 2 minutes
(The first 60 seconds—Memorable.)
Slides 4 to 6: The mechanics: How it works. 2 minutes
(With mechanics, the investor is now thinking how they can help and be rewarded.)
Slides 7 to 8 Validation Elements: Research on market, your history, the competition. 1 minute
(Just touch on this. More later as their interest builds.)
Slide 9 Doing It: Show you have done it before. 1 minute
(Team and resources needed. This will lead to their involvement.)
Slide 10 Close: 1 minute
(Simple quick. “Happy to answer questions and share details.”)
Remember they are here to find a company to invest in; if you are successful in the information stage the investors will self-engage as they ask questions. You have every detail of your strategic plan, your cash needs, your break-even point, your competition, and the size and nature of the market ready to share. You are prepared to answer every possible question with handouts and details. Do not use them during the presentation; you will wait for them to engage and then they will absorb this additional information and draw themselves into the arena of your world.