Gaining investment isn’t always easy, it can be a long and competitive process, but one that is worth the wait. The following blog is the second of a three-part series on getting investor ready, aimed at companies who are planning to raise Seed investment in the B2B industry.
Below, InterTradeIreland’s Lead Equity Advisor, Drew O’Sullivan, shares his expert advice on making your pitch memorable and how InterTradeIreland can help on your journey to raising finance.
Make it memorable
The focus of this blog is not around what detail a pitch deck should contain. There are already some great materials out there, some of which we’ll share below, and no need to re-invent the wheel. The focus here is an answer to this question – After your pitch meeting, what do you want an investor to remember you for?
Here are some suggestions…
Customer (who) & value proposition (why)
Be very clear on who your ideal target customers are (near-term) and why they will buy from you. Sometimes people focus too heavily on the problem, sector and meta- argument of what they are about. Investors are more likely to see an opportunity if they receive a clear message on who the customer is and why they will buy from you. If you do this well, you’ll already be ahead of a high percentage of pitchers.
Another tip is to focus on why now is a great time for customers to adopt your offering, explain the pressures/opportunities that are in the market now. A common mistake is to focus on jargon and your sector without narrowing in on the ‘ideal customer profile’ being targeted in the first 12-18months.
The team (why you)
Is there something memorably relevant and impressive about the team pursuing this opportunity? It could be what they have achieved so far on a shoestring budget, the quality of customer engagement and validation? Or how compellingly well they articulate the opportunity? If so, focus on this and use it as a one of your USPs.
Market sizing & potential scale Vs sale
Focusing on top-down market sizing will tell you how many customers are in the overall market and how much they’re spending but ‘bottom-up’ market sizing is better and will build up the argument for prospective number of customers, including average revenue per customer per year. Once you have established this, consider how many customers you would need to require €/£1m, €/£10m or €/£100m in revenue.
This will allow you to demonstrate your average revenue per customer per year and how many customers you need to reach your goal. When approaching investors use the same market sizing units (usually customers) that fit how you will describe your sales target (usually customers X average revenue per customer). As most VCs will not want to invest in opportunities where the total revenue potential is not in the €/£ billions.
Have a winning strategy
Many markets are a ‘winner takes all’, so to succeed you’ll need a winning strategy. Imagine there are five other start-ups focused on the exact same opportunity as you, at the same level of development, as hungry, as connected and as smart as your team and they are located anywhere else in the world. In three years’ time, how would you know who the winner is? Would you define it by geography (best in UK, Europe, USA), market leading profile customers, quality of technology, amount of funding raised, revenue levels or clinical trials? Whatever the answer, define winning in the market and then rationalise a deliberate strategy to be that winner.
Provide proof of effectiveness
Reality should always match your value proposition. Whilst it’s great to talk about how effective your product/offering is – it’s even better to show this. Show a short demo video or if possible testimonials and case studies of how your MVP has changed customer behaviour and brought measurable impact. If you have planned pilots with customers – demonstrate how you will measure the success of that pilot and how this will prove the value proposition.
Be considerate and ambitious
Whatever your definition of winning in say three years looks like, make sure the milestones you aim to achieve in the beginning lay the groundwork for this. Think of your first year as reaching base camp 1 on your way to conquering Everest. It can also be useful to address risks. Have you thought through mitigations, can you plan for them and how will you react? Demonstrate you are as considerate as you are ambitious.
The road to investment
The journey to investment can be difficult but there are a number of supports and resources available to help. InterTradeIreland’s annual Venture Capital Conference can be the perfect place to start. This year’s theme is ‘Opportunity Island – Scaling on the island of Ireland and the event takes place virtually on the 14th and 15th March.
Attendees have the opportunity to gain insight into the Venture Capital Industry and hear from world-class companies which have started and are scaling from the island of Ireland. This includes insight into the entrepreneurial journey - sourcing teams, growing sales and raising capital while participating in workshops on the fundraising process, pitch decks, term sheets, EIIS and post investment investor relations.
Although securing finance is not always easy there a couple of things you can do to give yourself the best possible chance to succeed. Follow these steps to deliver a memorable pitch and you’ll be one step closer to reaching your goal.