Investor Presentation Basics (Handout)

Investor presentations come in four grades: Trainwreck, Good Enough, Outstanding, Insanely Great. Your first objective is to rise above Trainwreck. The good news is that disaster can be avoided by applying a few simple rules and principles, summarized here. These guidelines are also the prerequisite for moving up to an outstanding or insanely great presentation.

Trainwreck is not too strong a word for some of the regrettable presentations seen at every venture fair or endured by investors in private meetings. Companies who show up unprepared and expecting to “wing it,” or who haven’t absorbed the basics of good investor presentation, risk doing lasting damage to their reputation and their ability to raise money. At a minimum, your goal is to present your business well enough that you can be judged on the merits of the business and the quality of the team.

Most common causes of a Trainwreck investor presentation.

Too technical
Too long
Too much detail
Too much product, not enough about the business.
Crowded or illegible slides
Poor eye contact
Talking too fast

First steps for avoiding a Trainwreck presentation:

Don’t recycle slides from other types of presentations. Start fresh.
Feature the business, not the product or service. 80/20 rule.
Illustrate, don’t prove.
Anticipate likely investor questions as you plan and prepare.
Design slides exclusively as visual support. Not to print out or stand alone.
Never put anything on a slide that can’t be read from the back of the room.
Use as many slides as you need to keep slide density low. Don’t count slides.
Edit ruthlessly. Omit needless words, slides, and anything else.
Maximize eye contact. Speak to the screen and you’re dead.
Rehearse, rehearse, rehearse. Time your presentation so you don’t have to rush.

Get the Slides Right

Bad slides are the leading cause of Trainwrecks. First rule: all elements on the slide must be legible to everyone in the audience, including people sitting in the back. No exceptions!

Follow these guidelines to assure legibility:

Use adequate font sizes. 24 pts. is a good minimum size font for everything on every slide—including text in tables, diagrams, and captions. If you’re tempted to use a smaller font, you have too many words on the slide! Use more slides or fewer words. Small font size is the quickest way to make an audience dislike you.
Use sans-serif fonts. Ariel, Calibri, Verdana, Century Gothic are examples of sans-serif fonts. Times New Roman is a serif font, hard to read on a projected slide; it looks messy.
Use high contrast colors, especially for text. Subtle colors that look great on your computer monitor could look washed out when projected. It doesn’t matter if you use dark text on light background, or light on dark, but be consistent.
Make images, charts, or photos big enough to be clearly seen. Use only one per slide, rather than cramming two and three all on a single slide.
Don’t feel compelled to put a title on every page. If you want to show a photo full screen, eliminate the title. Overlay text on the photo if that helps comprehension.

If you cram a slide with too much information—even if you follow the rules for legibility—the audience will struggle to make sense of the slide in the short time it’s up, and you force them to choose between reading the slide or listening to you.

Follow these guidelines for comprehension:

No full paragraphs of text! Even full sentences can be hard for an audience to absorb. Use short, telegraphic phrases instead. Edit out any unnecessary words on the slides.
Use plenty of what designers call “white space.” Resist the temptation to fill every inch of the slide.
Feel free to put only a few large words or numbers on a slide to drive home an important idea.
Take special care with any charts, graphs, diagrams. Prune them down to the bare essentials so they can be grasped in a few seconds.
Less is more.

The look of the slides reflects your professionalism. All audiences appreciate good design, even if subliminally. Good design contributes to a good first impression. Start with these rules of good design:

Choose a palette of a few colors that work well together, and restrict colors on all slides to that palette.
Use an original template with few design elements. Avoid the templates that come bundled with PowerPoint—we’ve all seen them before. Don’t use templates that take up so much slide ‘real estate’ for decoration that you have little space left for text or images.
Strive for consistency in design elements (color, font, layout, etc.). If you’re pulling in slides from multiple, older presentations, be sure to standardize the look to avoid a patchwork effect.
Don’t use cheesy clip art or clichéd images that we’ve all seen before (e.g. two people shaking hands, chess pieces, piles of money). They make you look like an amateur.
High-resolution photographs can be a powerful way to reinforce your points. Not photos for their own sake, for being clever, or for “dressing up” the look But photos as an aid to communication. Don’t be afraid to fill the entire screen with a high-res photo, if appropriate (and leave off your logo.)

Note about the number of slides: Forget anything you’ve heard about a fixed number of slides—for example, the “Ten Slide Rule.” Such rules are out of date and lead to crowded slides and boring presentations. Instead, focus on the flow of ideas that unfurl your argument for investment using however many uncrowded slides you need. This means you might decide on a rapid succession of slides in some places—perhaps including full-screen photographs—to make a single point. Nobody is counting slides.

But heed the time limit! Plan and rehearse your final presentation to be 30 seconds under the limit, and then your talk won’t sound like a race to the finish. You can relax and speak conversationally. Being cut off is highly embarrassing, and talking too fast is almost as bad.

Storyboard Your Story

Rise above any list of suggested slides (including mine) by focusing on telling the story (not history) of why your company is on to something great. Clarify the source of the opportunity, the customer pain and value proposition, what your solution is and how you know customers will buy it, how you intend to grow and defend market share, where you are now in the process, the size and intensity of the market, your cost and revenue expectations, and how much investment capital you need and what for. Why are you and your team the right people in the right place to make this happen. Why are so sure you’ll win?

Before opening PowerPoint, outline the main ideas in outline using an “analog” tool like a storyboard or whiteboard or a legal pad. Try to find a flow that will tell your story most clearly, and bring out the important ideas you want your audience to remember about your company. Don’t try to cover everything in your business plan. You don’t have to prove every statement.

Then work out your narrative (the words that come out of your mouth) and start building slide sequences that support the narrative. Then rehearse the presentation at least three times, standing up and in full voice, before presenting to an audience.

Top-Tier Questions

Another way to decide what content to cover is to think of the questions that typical investors want answered when they are first learning about your company. Work from this list as you shape your story and your argument for investment.

What is the opportunity? Who is your customer, how acute is their problem, and how do you solve it? What proof of concept do you have?

How big is it? How big is the addressable market for your solution? How fast is it growing and is the growth sustainable?

How do you make money? What is the customer value proposition and how do you capture value? Do you have a realistic go-to-market plan? Are revenues sustainable and scalable?

Can you defend it in the market? What is the competition for the customer dollar, current and potential? Do you have adequate IP or other barriers to entry?

Can you execute? Does your team have appropriate experience? Is your operations/implementation plan realistic?

What traction do you have? What proof do you have that customers will buy?

How much money do you need, and why? How much funding do you need to reach cashflow breakeven? How will it be applied to increase value?

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