The Pitch Framework: Give a Solid Structure to Your Presentations

The most challenging part of a funding round is convincing investors that your venture is bankable. The first step to convince them is delivering a solid pitch that wows them, raises their interest, and influences them to talk with you about the investment opportunity. It turns out that this is where many entrepreneurs stumble and fail to leave an impact. Failure to convey the right message, highlight important points, or any other mistake can leave companies without interested investors, ultimately increasing the challenges of securing funds.

This blog covers Volker Hüther ’s thoughts on everything emerging entrepreneurs should know about crafting the perfect pitch that attracts investors. Before we delve into the tips, it is important to know that the goal of the pitch is not to make a sale but to invite investors to a larger conversation. Time is very scarce during the pitch, so it is essential to focus on the important points and leave the other aspects for a separate discussion.

The First Rule of Pitching: Keep It Simple

When preparing your investor pitch, remember that less is often more. Keep your slides concise and complementary to your spoken presentation rather than reading directly from them. Aim for simplicity in your explanations, breaking down complex concepts into easily digestible information. This approach is crucial, as you may not know your audience's diverse backgrounds and expertise.

Maintain a logical flow in your presentation. Any fact or statement out of the blue will break the investors’ focus. Remember, your goal isn't to make an immediate sale but to spark interest and initiate a relationship. By simplifying your pitch and focusing on what's relevant, you'll create a more engaging and effective presentation that resonates with potential investors.

Addressing The Problem and The Solution

Start by clearly stating the problem your product or service addresses. Keep it concise and straightforward, avoiding exaggeration. Highlight your solution's unique selling points, or "moat." Emphasize what makes it faster, cheaper, or better than existing alternatives. This is your opportunity to showcase your intellectual property and any protections you have in place.

If you have patents or trademarks, briefly mention when they were filed and how long they remain valid. This information helps investors understand the longevity of your competitive advantage. Present your sales numbers, if there are any, to demonstrate market validation and potential. Mention if you have a working prototype, as tangible progress can significantly boost investor confidence.

Discuss the market size, but be realistic in your projections. Avoid inflated numbers or unrealistic adoption rates, as experienced investors will be skeptical of overly optimistic forecasts. Be prepared to justify your figures, as they will likely be scrutinized during due diligence. Emphasize the potential for early investment, acknowledging the risks while highlighting the possible rewards.

Discussing Go-To-Market Strategy and Competitive Advantage

Talk about how you plan to get to the market and your challenges. Depending on your product, you may need to navigate approvals from agencies like the EPA and FDA or obtain CE marking for European markets. Understanding these requirements and communicating them early on is crucial for a smooth path to market.

Competition is an essential factor to analyze. While it's tempting to claim uniqueness, it's rare for a product to have no competition whatsoever. Even if your solution is truly novel, consider how the problem is being solved today. Your product may be faster, cheaper, or better, but existing solutions might be deeply entrenched, particularly in conservative industries like healthcare. When discussing competitors, be specific about their market share and positioning. This demonstrates a thorough understanding of your industry landscape. Remember, competition isn't always direct – look for indirect competitors or alternative solutions that address the same problem.

If your product is disruptive, be prepared for resistance, especially in industries with established practices. Healthcare is a prime example, where doctors often adhere to tried-and-true methods they consider the "gold standard." Changing such ingrained practices can be one of your most significant challenges.

Presenting Financials with Confidence

Here’s everything you should cover while discussing financials in your presentation:

Important Numbers: Provide supportive documentation for your valuation. Recognize that there are multiple ways to calculate valuation, and no single method is definitively correct. This is often a point of negotiation, so be prepared to discuss it in depth.

Provide 3–5-year forecast income statements, including revenue and costs. Be sure to differentiate between sales and grants. While grants shouldn't be included in revenue, they are valuable to highlight in other income as they represent non-dilutive funding, which investors appreciate.

Forecasts: Avoid overly precise forecasts, as experienced investors can identify inflated numbers. Remember, these are projections, not certainties. Instead, focus on rounded, reasonable estimates. Include up-to-date actuals, as investors are keen to understand your burn rate. Be prepared to disclose your current bank balance. The disclosure helps investors assess if you're in a "fire sale" situation or operating from a position of strength. The assumptions behind your financial projections are often more interesting to investors than the numbers themselves. Ensure these assumptions are realistic, sensible, and aligned with the rest of your presentation. Be prepared to explain and defend your figures.

Founder’s Salary: Be mindful of how you allocate funds, particularly founder salaries. While it's understood that founders need to be compensated, ensure that a significant portion of any raise goes towards growing the business rather than primarily supporting founder salaries.

Use of Funds: Clearly outline your funding ask and how you plan to use the funds. These plans should be reflected in your financial forecasts, creating a cohesive narrative.

Sales Projections: If your projections show a dramatic increase in sales (the "hockey stick" curve), be prepared to justify these figures. While rapid growth can occur, especially when starting from zero, you need to support these projections with solid reasoning.

Consider investing in a temporary or fractional CFO to help professionalize your financial presentation. Their expertise can add credibility to your numbers and help you navigate investor questions.

Keep in mind that the financial section isn't just about showcasing big numbers. It's about demonstrating your understanding of your business model, your realistic approach to growth, and your ability to use investor funds effectively. A well-prepared financial section can significantly boost investor confidence in your venture.

Introducing Your Credible Team

Your team is a crucial element of your pitch, directly impacting your credibility and ability to execute your business plan. Here's how to effectively present your team to potential investors:

Focus on Relevant Expertise: When introducing your team, concentrate on professional expertise directly relevant to your business. Highlight experiences and skills that align with your venture's critical needs. This isn't the time for lengthy personal anecdotes or to showcase friendships; instead, emphasize how each team member's background contributes to the company's success.

Highlight Diverse Skill Sets: Showcase the range of expertise within your team. Ideally, you want to demonstrate that you have established professionals covering various critical areas of your business. This might include technical expertise, industry knowledge, marketing skills, financial acumen, or operational experience.

Acknowledge Gaps Honestly: It's okay to have gaps in your team - most early-stage companies do. Be upfront about areas where you lack expertise. This honesty can work in your favor, as it shows self-awareness and strategic thinking. You might even frame these gaps as opportunities for potential investors to contribute their expertise.

By thoughtfully presenting your team, you demonstrate to investors that you have the right mix of skills to execute your business plan, the self-awareness to recognize your limitations, and the strategic thinking to address gaps.

Crafting a Compelling Investment Proposition

When presenting your startup to potential investors, it's crucial to articulate the terms of the deal clearly. Start by clearly stating your ask and ownership type (convertible note, SAFEs, or equity). Be specific about the terms, including the valuation (or valuation cap for convertible notes) and other key details like discount or interest rates. Transparency about the timing of the funding round is also important—investors want to know if you're just starting to raise funds or nearing closing the round.

Talking about your lead investor can bring you significant credibility. Also, be clear about how much of the round is still available. This information can create a sense of urgency for interested investors.

One of the deal's most critical aspects for investors is the exit potential. Will you aim for an IPO? Is there potential for acquisition by a strategic investor or competitor? Provide realistic estimates of your expected price upon exit under different scenarios. While it's understood that these are projections and not guarantees, investors appreciate that you've seriously considered exit strategies. It demonstrates that you're focused on building the business and providing returns to your investors.

Q&A: The Final Hurdle in Your Investor Pitch

The Question and Answer (Q&A) session is critical to round off your pitch. It's your opportunity to demonstrate your depth of knowledge, your ability to think on your feet, and honesty. Here's how to navigate this crucial part of your presentation effectively:

Listen Carefully: The first step in a successful Q&A is carefully listening to the questions. It's easy to fall into the trap of answering the question you think was asked or the question you wish was asked rather than the actual question. Remember Socrates' principle: understanding the question is half the answer.

Be Concise and Relevant: Be succinct and directly address the question while answering. Rambling answers not only waste precious time but can also give the impression that you're unsure or trying to hide something. Stay focused and to the point.

Manage Your Time: Be mindful of the time allotted for Q&A. Brief, clear answers allow for more questions, giving you more opportunities to showcase your knowledge and address potential concerns. If you run long on an answer, consider offering to discuss the topic in more detail after the session.

Offer Follow-Up Opportunities: Include your contact information on the final slide of your presentation. Invite anyone with additional questions to reach out to you directly. This shows that you're open to further discussion and gives interested investors a clear path to continue the conversation.

Be Honest About What You Don't Know: If you're asked a question you can't answer, it's far better to admit this than to guess or invent an answer. You could say something like, "That's an excellent question. I don't have that information, but I'd happily research it and get back to you." This approach demonstrates honesty and a commitment to providing accurate information. Stay Calm and Professional: Even if faced with challenging or skeptical questions, maintain your composure. Your ability to handle tough questions calmly and professionally can be just as impressive to investors as the content of your answers.

Approaching the Q&A session with these principles in mind will help you turn this potentially nerve-wracking part of your pitch into a powerful tool for building investor confidence and interest in your venture.

Summing It Up

Here are the important tidbits you must remember for an impactful pitch:

The pitch is pivotal in fundraising – It’s your chance to build relationships and generate interest.

Presentation matters as much as content. Smile, focus on storytelling, body language, eye contact, and voice, and don’t rely solely on slides.

Follow a clear flow – Present the problem, solution, market (including exclusivity/IP licensing), go-to-market strategy, and financials.

Financials should be realistic and accurate. Provide 3-5-year forecasts, include assumptions, and ensure calculations are correct. If possible, have a CFO or financial expert review them.

Present your team effectively – Keep it relevant to the business opportunity, be honest about leadership gaps, and avoid overhyping past successes. Investors may help fill these gaps.

Clearly state your ask – Define your terms, justify your request and valuation, discuss exit strategies, and show potential returns with comparable deals if available.

Emphasize transparency – Use the Q&A session to build relationships and foster dialogue with investors.

About the Speaker

Volker Hüther is a seasoned global CFO with deep expertise in financial strategy and international business expansion. He is currently the Managing Member of Global Bridge LLC and Principal of Huther Consulting. Volker has a proven track record of turning tough negotiations into win-win situations, liaising with commercial and investment banks, and transforming business operations in struggling ventures.

Watch his full keynote here .