The Point: We see a lot of investment opportunities (sometimes too many!) However, we rarely see “quality” investment opportunities cross our desk. It’s not the colors of the presentation, the font, or the graphics used that I’m talking about regarding quality. What I am focusing on is the following 10 criteria every investor wants to know… Enjoy!
Every once in a while, a presentation is made to us at Tip of the Spear Ventures that makes us stop. Similar to the social media attention grabbing headline or video, these presentations make us want to know more about what the entrepreneur has going on. What are the criteria that most often make us stop and take notice?
What follows are the 10 criteria every investor wants to know (and what every entrepreneur should put in their presentation deck):
OVERVIEW
Simply put, the overview is the starting place to grab investors attention. Who are you? What are you about to do that’s great? Why should we look at page number two in this presentation? Every investor will want to know a high-level overview of what you’re doing (briefly!)
ELEVATOR PITCH
You have 30-seconds in an elevator to tell the investor what is so special about your company. Can you do it in 30 seconds? Will the investor know what you’re talking about (or are you too deep in the weeds)? Every investor will want to know in short/concise fashion what you’re working on.
TEAM / ADVISORS
More times than not, we’re looking to invest in people. So who are the people that are directly / indirectly involved with your initiative? What experience do they have? What are they doing to add value to the organization? Every investor will want to know who comprises the team and advisors to the team.
MARKET
Is there really an opportunity, and more important is the solution to the opportunity going to have some redeemable quality (i.e., $$$)? Every investor will want to know what the size of the problem is, as well as the solution.
BUSINESS MODEL
Will you offer a demonstration (not during the pitch presentation, but as a part of your business model)? Every investor will want to know how you plan on making money. Will your revenue source be business to consumer (B2C), business to consumer (B2C), or business to government (B2G)? Will your business model consist of a one-time sale, recurring revenue models (RUNDLE!), and/or rely on affiliates? Every investor will want to know what your business model is.
RESULTS
Are you/your venture pre-revenue (a nice way of saying we haven’t made any money yet — zero)? Are you post-revenue, and if so what have the financial and other key performance indicators (KPIs)? Every investor will want to know what your results have been and what you anticipate them to be.
COMPETITION
You probably will not be operating in “blue” water (meaning little/no competition). So if you are operating in “red” water (with competition), who are your competitors? What are the results your competitors are accomplishing? When you compare your offering to that of your competitors, how do you stack up? Every investor will want to know about the competition.
EXIT STRATEGY
I’ve been told that exit strategies do not need to be spelled out — and I’m not certain why? We always want to know is this a “build/hold” or “build/sell” strategy? If it’s targeted to sell, what and when is the exit to occur? Every investor will want to know about your planned exit strategy.
CAPITAL REQUEST
You are probably pitching or presenting your company to raise capital. If so, how much are you looking to raise? Upon successful raise, what will you do with the money? Most important, what can the investor expect to get for their investment? Every investor will want to know your capital request.
CLOSE / Q&A
If the presentation model of “Tell them what you’re going to tell them, tell them, and tell them what you told them” holds true, bring the conversation home with a strong closing. Always leave time at the end of your presentation for questions and answers. Nothing is more frustrating for an investor to not have time to ask questions — they will typically not hunt down the entrepreneur afterwards to ask. They also might ask the same question, or the question that gets asked might be the one you answer with the reason why investors decide to invest. Every investor will want to know how you close and have time for Q&A.
SUMMARY
In this post, we’ve explored the “10 Criteria Every Investor Wants to Know.” Follow this guide when you’re searching for capital, looking for support, and/or launching your entrepreneurial talents.
Sam Palazzolo
