Classic marshmallow challenge

1. The Early Stage Pitch
Sheila Ash ©
April 2015

2. Summary
What is an elevator pitch?
Pitch frameworks
The audience for the pitch
The pitch conversation
The pitch deck

3. What is an elevator pitch?
 “So what do you do?”

 An elevator pitch is a short summary
used to quickly and simply define
a profession, product, service,
organization, or event and its
value proposition
 Possible to deliver in the time of an
elevator ride, 30 s – 2 mins
 Origin widely credited to Vanity Fair
editors Ilene Rosenzweig and
Michael Caruso
 Short, sharp and Persuasive

4. Pitch frameworks
 Situation – Impact – Resolution
 The One Liner
 Wow – How Now
 The Question Pitch
 Daniel Pink’s 21st century pitches
 Pixar pitch

Perfect it, then Practice, Practice, Practice

5. Situation – Impact – Resolution
 Situation (conflict). Illustrate the pain current customers are
facing
 Impact (escalate conflict) – Explain the impact of that
situation.
 How is this affecting profits, market share, customer loyalty,
or anything else the prospect is concerned about losing?
 Resolution – Explain how you solve the problem.
 Focus on benefits, not products and services.

6. Generic Framework
 We solve [insert problem situation] by providing
[insert advantage],to help [insert target]
accomplish [insert target’s goal]
 Depending on the stage you’ve reached, you
might follow it up with a second sentence about
your business model: We make money by
charging [customers] to get [benefit]

7. The one line elevator pitch
 Your product / vision , your company purpose
 Keep it around 30 seconds and under 150 words
 Make it easy to understand and avoid jargon
 Create a statement, question, or fact that piques their interest – what’s in it for them?
 Make it convincing and engaging

 We are X for Y (assuming X is attractive and Y is a big enough opportunity!) Example

AngelList (https://angel.co ) is where the world meets startups like ABCStartUp.com
www.scripted.com is a marketplace for businesses to hire freelance writers
Strategic Scientific Consulting helps scientists build successful businesses
Me? I build people’s capacity to achieve



8. Wow – How - Now
 WOW. Say something intriguing (even puzzling) that
will make the other person want to hear more.
 A creative summary of what you do that demands
some clarification.
 Ideally, the prospect’s reaction will be to ask “What
does that mean?”
 HOW. Answer the stated (or unspoken) question and
explain exactly what you do.
 NOW. Shift into storytelling mode, giving a concrete
example of a current customer.
 The key phrase is “Now, for example…”


9. Generic framework
 I/we work with (insert target market)
… who are (insert feeling word)
… with (insert problem/issue you solve)
I/we work with /help (target market)
… who want to (describe what your customers
want)

10. Example
 Brian Walter (http://brianwalter.com/why-brian) a communicator, who makes
messages go verbally viral

Prospect: So, what do you do?
Me: I build PowerPoint muscles.
Prospect: Huh?
Me: I teach people how to use PowerPoint more effectively in business.
Now, for instance, I’m working with a global consulting firm to train all their
senior consultants to give better sales presentations so they can close more
business.

11. The Question Pitch
 “Have you ever purchased an ABC online?
 {wait for answer}
 Well, my company is ABC.com. We are the number one,
national distributor for all ABCs, online. We sell every type of
ABC available as well as provide very competitive service
pricing. We are the leading, online ABC provider in the
country/region/world

 Use this if your arguments are strong
https://vimeo.com/66508882
 Example

12. Pink’s 21st Century Pitches
 The One-Word Pitch - Write a 50 word pitch.
Reduce it to 25. Then to 6. One of these is
almost certainly your one-word pitch
 The Question Pitch - Use this if your arguments
are strong https://vimeo.com/66508882
 The Rhyming Pitch https://vimeo.com/69775579
- Try http://www.rhymezone.com
 The Subject Line Pitch - Review subject lines of
the last 20 e-mail messages you sent. How
many appeal to utility or curiosity. If <10, re-
write each that fails the test.
https://vimeo.com/67907476
 The Twitter Pitch - The best pitches are short,
sweet, and easy to retweet, circa 120
characters
 The Pixar Pitch – Storyboard approach
Six 21st Century Pitches by Daniel Pink

13. The Pixar Pitch
Once upon a time ___________________________.
Every day, _________________________________.
One day ___________________________________.
Because of that, _____________________________.
Because of that, _____________________________.
Until finally,_________________________________.
The Pixar Pitch - Read all twenty-two of former Pixar story artist Emma Coats’s
story rules: http://
www.pixartouchbook.com/blog/2011/5/15/pixar-story-rules-one-version.html

14. Advice from the best
 "They're able to articulate the opportunity in 90 seconds or less."
 While "Shark Tank" pitch segments average 10 minutes in length, the unedited pitches can last an
hour. But if an entrepreneur can't convince at least one of the investors within a minute and a
half that they'll be missing out on a fantastic chance to make a ton of money, then all the
time in the world won't be enough to win them over.
 "They're able to explain why they are the right people to execute the business plan."
 A great product isn't enough. The entrepreneurs need to convince the investors that no one else
understands the product or its customers better, and that their passion for the business can't
be matched.
 "They know their numbers."
 "I've seen so many deals fall apart after the first two have been achieved, and then you ask
questions about anything to do with the numbers side and if they don't know the answer, they
just evaporate," O'Leary says. If an entrepreneur suggests that an investor can help teach
them about their industry's market size and their product's ideal margins, then it's game over.
"You lose confidence immediately when someone doesn't understand the numbers."

15. Example: AirBnB
http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-ever-pitch-deck-2011-9#-1
Airbnb is a website for people to rent out lodging

16. Example: Foursquare
http://www.businessinsider.com/this-is-the-first-pitch-deck-foursquare-ever-showed-investors-2011-12?op=1
Foursquare is a local search and discovery service mobile app which
provides a personalised local search experience for its users

17. Example Pitch decks
 http://www.pitchenvy.com/gallery/mixpanel-pitch-deck/
 https://mixpanel.com/blog/2014/12/18/open-sourcing-our-pitch-deck-that-helped-us-get-our-865m-valuation
 http://onstartups.com/tabid/3339/bid/98034/The-Pitch-Deck-We-Used-To-Raise-500-000-For-Our-Startup.aspx
 http://www.slideshare.net/Bufferapp/buffer-seedrounddeck
 http://www.slideshare.net/stijnvanlieshout1/pitch-deck-betpitch-a-fantasy-football-betting-platform-35403394
 https://www.mint.com/
http://www.slideshare.net/PitchDeckCoach/mint-pitch-deck-46465532
 http://8fit.com/story/seed-funding/ https://speakerdeck.com/micho/8fit-pitch-deck
 http://www.slideshare.net/benjaminevans/walletkitslidedeckpdf-130206104240phpapp02-18147368

18. Know Your Audience
 Who you are meeting with?
 What is the investor’s focus?
 Are there related investments?
 How much time do you have?
-
 These influence your deck, the discussion and the
questions you’ll likely be asked

19. Conversation with Slides
The deck is important. Work on it & get it right!
But the conversation is more important
Budget your time
Allow for discussion alongside each slide
10-15 slides – no more!

20. Shared Slides have no voiceover
 Your deck will be shared (i.e. among partnership)
Therefore
Must be equally compelling with/without a voiceover

 The stand alone slide pack
 Deck should tell its own story
 Do not rely on transitions, animations, builds, intricate
slides
 Make the file size manageable
 PDF or secure URL are alternatives to PPT

21. Content
 For early stage companies, it’s all about product
 And the best mark of product is market validation
 Beware the demo - Demos are great… but remember
these four rules:
 Be careful of time
 Don’t get lost in product
 Have backup if (when!) something goes wrong
 Give even weight to product & traction / data

22. Pitch Structure
 The Big Idea
 Why you?
 The Current Problem
 Your Solution. Why Now?
 Traction and Validation
 What’s the Future?
 The Ask

 1-2 slides
 1 slide
 2-3 slides
 3-5 slides
 2-4 slides
 1-2 slides
 1 slide

23. The Right Team
 Why are you the right team
for the problem?
 Include management team
and advisors, investors
 Include bios with key,
relevant experience
 Outline division of
responsibilities
 Think an expanded team
profile
http://angel.co/visually

24. Why Your Solution Now?
 The current problem
 Customer / consumer pains?
 How are they solving today?

 Your solution
 How will they solve with you?
 How is it different than market?

 Why now?
 Why is solution possible today?
 Why is it right for today,
tomorrow?

 How big is the market?
 How big can you be?
 Know your numbers!
 What value are you creating?
 Be realistic!

25. AirBnB

26. Mint.com
Mint.com is a free web-based personal financial management
service for the US and Canada

27. Traction and Validation
 Quantitative evidence of market demand
 Proof that somebody wants your product
 It communicate momentum in market adoption
 Most convincing order
 Profitability
 Revenues
 Active users
 Registered users
 Engagement
 Partnerships/clients
 Traffic

28. Investors focus on the 3 specific items
 So every pitch deck needs to answer 3 questions
 Does it look like your customer base is growing?
 If not, then you are dead in the water.
 Communicating customer traction to prospective investors is hard
 Investors have limited time so you need to graphically depict that
you are growing in as few words as possible
 Do your customers like your product?
 you need to demonstrate that your product is getting “stickier”,
and the usage patterns of your customers are getting more
favourable ie there is traction
 The reason you need to demonstrate that your product is sticky is
simple: acquiring new customers is MUCH more expensive than
getting existing customers to pay for your product again.
 And happy customers are also your best salespeople -- if you are
able to successfully demonstrate that your existing customer
base is happy, that in and of itself is a low-cost sales channel
 Does it look like your business/product can actually scale?
 Remember that venture investors are not interested in ordinary
returns -- that is why they are in venture capital and not in the
S&P 500.
 If you are not able to demonstrate a clear path to $100M within five
years, your company is not a good candidate for venture
capital.
 You will constantly get asked about scalability

29. Ready for zero product traction
 Traction can be shown through
acquisition, usage,
retention, etc.

 ReadyForZero showed user
activity as measure of
product efficacy - Users pay-
off debt 2x faster than non-
users

 http://
www.slideshare.net/shannonmcnay/readyforzero

30. The Future
 You have outlined team, product and success to-date
 Now how does this tie into the big vision and the fundraising?
 What are the next 12-24 months of:
 Product
 People
 Performance
 Finances

31. The Ask
 Essential, yet commonly overlooked
 You must ask for what you want!

 What size investment are you looking for?
 How long does it get you?
 How will you spend it?
 What are goals before raising the next round?
 How else can the investor(s) help?

32. Summary
What is an elevator pitch?
Pitch frameworks
The audience for the pitch
The pitch conversation
The pitch deck

34. Fast Company
 Launched in November 1995 by Alan Webber and Bill
Taylor, two former Harvard Business Review
editors.
 Fast Companyis the world's leading progressive
business media brand, with a unique editorial focus
on innovation in technology, ethonomics (ethical
economics), leadership, and design. Written for, by,
and about the most progressive business leaders,
Fast Company and FastCompany.com inspire
readers and users to think beyond traditional
boundaries, lead conversations, and create the
future of business.
 Fast Company magazine was founded on a single
premise: A global revolution was changing business,
and business was changing the world. Discarding
the old rules of business, Fast Company set out to
chronicle how changing companies create and
compete, to highlight new business practices, and
to showcase the teams and individuals who are
inventing the future and reinventing business.
