Investor shopping; you need a compelling pitch deck

The Business Lifecycle

Businesses are at one point in their life or another looking for new investors.  One can say Investors are always looking for good investments.  Start-up’s usually need capital and are looking for either seed capital or an “A” round financing.

More mature entrepreneurial companies are looking for further financing.  Some are leaning to the IPO process for funding; others may opt for an merger or to be acquired.  Owners of mature companies (or for that matter all firms) are ultimately looking for an exit.

What is the difference in each of their life cycles?  Not much.  Investors, whether they are buying a percentage or the entire company want to know about your company; and they start with the pitch deck.

Investor pitch deck

The pitch deck is usually the only chance you will get to entice the prospective Investor.  We at SBA * Consulting and our strategic partner Management Interactive LLC have seen quite a few pitch decks.  Some extremely well made, informational and having an aesthetic appeal.  Some, not well made giving the reader very limited information.

Your pitch deck needs to provide the reader with enough information to prove your value proposition and request (for funding, or sale).  If you do entice a potential Investor, you’ve made it to round two.

Investor Information

While most investors will not ask you to fill out a 17-page document as they do on Shark Tank, many of the questions are germane.

Here are just a few related to the business itself (Shark Tank has many other questions and legal issues that would not be part of a normal investor buy-in).

  • Describe in detail what your business or product is.
  • What does it do?
  • Investment amount: what are you seeking, and what percentage of equity are you willing to give in exchange?
  • Funds: what do you intend to do with the investment funds?
  • In what stage is your company in? (Circle one) good idea, research & development, product development, shipping/live, revenue expansion
  • How much money have you invested in the company and in what time-frame?
  • Where and what was that money used for?
  • When did you start the business and how long have you been operating as a business?
  • Sales: what are your business’s total lifetime sales since starting?
  • What was the gross and net income from your business last year?
  • Projections: what are your sales projections for this and next calendar year?
  • How did you come up with those projections?
  • Have you ever tried to raise money from outside sources? (Yes / No) if yes, provide details.
  • What attempts have you made to build your business?
  • Have you been successful?
  • Why do you want to pitch your business?
  • What is your unique selling proposition?
  • Why should we look at your business; what is your “hook,” and why is your business notable?
  • What are the biggest hurdles your business has had to face, and how did you and your business overcome them?

A Pitch Deck for the Investor

Can you answer these questions?  Do you have the ability to corroborate those answers with research and especially relevant actual data from your accounting system?  Have you created a pitch deck answers that these questions?  Are you constant returning to proving that your value proposition is solid and profitable?

Does your company have a back office that will satisfy the investor, assuring them that the business is well run?  Is your staff up to the challenge of the next step in the evolution of the company?  Do you have a business plan, a marketing plan, a budget, and forecast?  Are the financial projections defensible or just numbers?

SBA * Consulting LTD in its strategic partnership with  Management Interactive LLC can assist you in getting those answers, building those systems and making your company marketable.  We can work with you to find an investor and working your other trusted advisors, seal the deal.

A footnote: Wayne Spivak, President of SBA * Consulting LTD was quoted in Bloomberg BNA April 4th in the article “Companies Confused About Upfront Fees for Cloud Services Rule”. and  in the article “Filing IPOs Shouldn’t Underestimate Accounting Challenged” on April 24th.

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