In every important life decision, there is a pivotal point that can make or break one’s future. For a business, one of these moments is the opportunity to speak to a potential investor. With so much on the line, you want to be armed with as many positives as you can. You may only get one opportunity in front of the right investor, so you want to be armed with the right ammunition to impress them. In this case, that means having the answers they are looking for. From a summary of your concept to your assets and potential challenges, the more you know, the more they can assess whether they are the right financial partner to help you reach your goals. Watch this video to get the valuable details you should know for that important moment you face in front of your future investor.
What should you prepare for a tech startup funding pitch?
The pitch deck
You should always have a pitch deck. A startup funding pitch deck is a really a short summary about the business. There’s a little bit a bout what you do, a little bit about the opportunity, a little bit about the market size, a little bit about your competitors. When we’re sitting down in meetings, and say who are your competitors and they say no one, we don’t like that. There is always a competitor, there is always someone who does what you do, but that you do better for the following reasons. You want to know what the valuation of their businesses is etc.
Sea Foam is a company we led, that is we were the lead broker. If you check the code, what they did yesterday was they were up 250% on debut. I won’t tell you about that. That’s good.
You want to make sure you’ve got your structures right:
- articles of corporation
- shareholders agreement
- founders’ restriction agreement
- intellectual property e.g. do you have patents, where are the patents held, are you the hundred percent holder of that intellectual property?
I’ll give you an example. There was a company called Lifespot Health. Lifespot Health was a German company looking to list on the ASX. When we looked at them six months ago, they weren’t ready to be listed. Why? They’ve set up a German entity, which is great. It’s got all the revenues, all the IPs and all the trademarks.
Then they went out and set up an Australian entity over here. They wanted to list the Australian entity. But the Australian entity didn’t have anything to do with the German entity. It didn’t have any revenues, didn’t have any of the IPs, didn’t have any of the patents. This Australian entity would have an option in two years of going into the US market. It was all too messy. Keep it simple. One entity, one structure, one IP; patents and trademarks all under that one group to keep it simple.
Pitch deck example
This is an example of a startup funding pitch deck, what you must have:
- A little bit about the problem
- The value proposition i.e. what is your unfair competitive advantage?
- What can you do that others can’t do in the market?
- What is your go-to-market strategy; your competitive analysis?
- Who are the management team?
- Who else is in the team? What have they done previously?
- What is their track record delivering value to shareholders? What have they done?
- Financial modeling, any financials.
- The offer document.
For every opportunity that a business has to present their startup in front of an investor, there are key factors that can greatly influence the investor’s impression. Those that are armed with the knowledge about figures and details that the investment company is looking for are at a huge advantage compared to their competition. Now that you have a good idea of what these financial backers need to know, you can put together a presentation that is poised for success.