McStartup

Slide One is really the elevator pitch slide. If you’ve come so far as to be reading this book, you probably already know what an “elevator pitch” is. But, just in case: An elevator pitch is the investment pitch that you would make to someone you have never met, in the time it takes to ride an elevator. Basically, it’s your story in 60 seconds or so.

Needless to say, 60 seconds is not a long time. You certainly can’t explain much (or any) nuance to your business or your business model in a that kind of time. Heck, you can probably barely get out your own name in a minute. Perhaps this explains why on a real elevator, people hardly ever start conversations.

On this slide, you are really trying to remind someone why that took the time to take this meeting in the first place. One thing to keep in mind is, just because someone has agreed to meet with you, it doesn’t mean that they’ve done a whole lot of research prior to them walking into the same room where you are.

In fact, you should expect that they haven’t done any. Generally investors, especially venture capitalists, won’t conduct a whole lot of research until you’ve captured enough attention to warrant it.

If they have done any research, it’s likely to fall into three buckets: They are aware of some general market trends, and they have some interest in that trend where you might fit;

Or, they have an existing company they’ve invested in, and their interest is really to get the scoop on you, just in case you are going to become a competitor to that company, or might otherwise have some interest research to share;

Or they’ve taken a look at similar companies to yours, and either passed on the investment or lost the investment to another investor.

In any case, you need to establish yourself, your credibility, and your business direction right out of the gate, and try and slap the investor into paying attention for the rest of the meeting, before you lose them to their Blackberry or iPhone checking email.

Quite simply: This slide is designed to give them the pitch that got you the meeting in the first place, again.

Don’t assume that just because you’ve already given this to them in some form that you should just skip over it or give a comment like “you know what we do, so we’ll get

into the meat of the presentation now.” If you do that, then you miss the chance to set the stage, and to lead the conversation your way, and instead, the stage will be set by whatever intuition the investor has about you and your pitch already, which might be wildly off base from where you want to take them.

When I say “set the stage” I mean “stage” in the literal, theatrical sense. You are on stage. The purpose of this meeting is to get the investor to spend the time to take a deeper look and to do the research that I wrote about earlier. Investors are not robots, they are not calculators, and they are not machines that scan mountains of data to find investments. They are people, and people respond to emotion, passion, and competence.

Moreover, any good investor knows the plan you are laying out here isn’t going to be how it all actually goes down. I have a funny quip that I use with my executive team from time to time: A plan is just a list of things that isn’t going to happen.

That doesn’t mean it isn’t important.

You can’t tell the future with perfection, but you can demonstrate the attention to detail which shows that you

understand how it could work. You must do this. But this alone is not enough.

Attention to detail in the absence of a story gets you nowhere.

While the “plan” may not be what’s going to happen, they “story,” or some version of it, is what you expect to happen. That’s your dream, that’s where you’re leading the company, and that’s where you want you investors to follow.

The “plan” on the other hand is a map you’ve drawn out that might take you there. A map with no destination is worthless. Investors are pretty darn good at reading these maps, but you must lead them to the destination. That’s what the story is all about. The plan is your best take on how to get to that destination, based on what you know today.

Put another way: The story is your destination and vision. The plan is where you demonstrate your knowledge of what is important and needed to get there. What will capture the imagination is the vision, not the plan.

So the bullets I’ve listed here are: Who are you? What do you do? Why should I care? It won’t take you long to get through this slide, but it might take you quite some time to actually prepare and rehearse what it is you want to say here. It may only be a couple of sentences. It might only take you 20 seconds to say it. But you’d better know what you are going to say, such that you get this presentation started on the right foot.

As the saying goes, you never get a second chance to make a first impression. Investors see enough pitches to cast a blanked judgement on how it’s going to go within about 20 seconds. You can look competent, prepared, and knowledgable, or you can look like an stumbling buffoon.

Obviously, you want to be the former.

Your pitch might go something like this:

“So let’s get started, and thanks for taking the time. I’m Joe Smith, founder of Technobabble. For the last 5 years, I’ve been an engineer in the networking industry, and I recognized across the industry, customers have been experiencing real pain because of the way the complex way networking protocols are managed. They are difficult to manage and downtime is common. We know how to fix this problem, and how to take that pain away, with a turn-key solution. That’s what we do at Technobabble, and that’s what I’m excited to tell you about.”

Let’s take a look at what this sort of introduction does in very short order:

• Every story needs a hero. You are the hero. You will take the pain away.

• You’ve established your superpower. In this case, five years in the industry, technical background. Superman got his power from the planet Krypton, you get your power from your knowledge about the inner-workings of the industry.

• You established the victim whom you will save: networking customers.

• You’ve established the victim’s situation: pain caused by manageability resulting in downtime.

• You’ve established the villain: existing networking companies who do nothing to help their own customers.

And most importantly, you’ve created a story. A villain, a damsel in distress, and a hero with superpowers who will swoop in to save the day.

Let’s now contrast that with the way most entrepreneurs start their pitches:

“So let’s get started. I’m Joe Smith, founder of Technobabble. We’ve developed a networking technology called GHT that is built on the opensource I45-X standard. Analysts say the space we are in will grow at a compound annual growth rate of 24% over the next 5 years, creating a $500 million dollar market for our products. We’re looking for investment capital to help us launch this beta product into the market.”

And, out pop the Blackberries and iPhones.

It’s not that the investor has completely lost interest at this point, it’s that they know they just need to see if your technology fits into their perception of the market and the problem, because you’ve completely failed to establish it.