Figure 11 Purpose And Clarity Template: Fill & Download for Free

There are two key documents you need when dealing with investors at the pitch stage. (More detail like your financial model is needed later, but at the pitch stage it is just two:I. A one page executive summaryII. A Slide deck or pitch deck.I will go over each in turn:I. Executive SummaryInvestors often talk about a "one-pager" and by that, they mean your executive summary. The executive summary is an at-a-glance fact sheet summarizing everything important about your business. Although it may be a hassle to create, it is vitally important.What is the purpose of an executive summary?
An executive summary serves several purposes:1 It provides a condensed quick reference guide to your business in a format the typical reader (an investor) is going to find familiar.2 It is a chance to demonstrate the clarity of your thinking and your communication skills.3 It is a piece of "collateral" that an investor can use to discuss your company with other investors and solicit their input--it reduces friction by saving investors the trouble of having to re-summarize the company themselves, keeping your description intact.4 It gives visual learners an easy way to quickly absorb your business vs. having to read many pages of documentation.How much weight do investors give the one pager?They count for a lot. Executive summaries are the basic currency of the startup investing world. They are often the only material a potential investor will read before deciding whether to engage further. Nothing beats a face-to-face meeting if you can get one, and the executive summary is often the ticket to that meeting. And it can create investor-to-investor traction because it is the tool investor's use to pass the opportunity along and seek input.Can I get by with just a slide deck?No. You absolutely need a one pager, and you also need a slide deck. You need them both for one important reason: the process and discipline of preparing a very good one page executive summary will really clarify and tighten your thinking. The process of writing it will make you far more cogent in talking about your business--both in person and when using your presentation deck.If the quality isn't great, does it mean I don't get a meeting?Yep, pretty much. A really strong endorsement can *sometimes* save you, but a sloppy or bad executive summary is a big red flag. And justifiably so. You have all the time in the world to prepare your executive summary. You've had access to mentoring and advice received through networking. If after all that, you cannot pull together a good one pager it raises questions. Investors will wonder--Do you care enough about this project to bother? Were you unable to network or do the needed research or be bothered to find help? Are you un-coachable? Are you a poor communicator? The list of potential negative inferences is long (and there are pretty much no positive inferences). Good investors worth having in your company see a lot of executive summaries and plans every month. The sheer volume teaches them to look for signals to help figure out where to most efficiently spend their time. A low quality summary is a strong signal to focus elsewhere.What needs to be in this thing?The executive summary should include most of the same topics from a basic slide deck (which I will cover in my next column), but the details are tightly packaged and sparingly worded to fit on one page, or at most, the front and back of a single sheet. The typical format includes a box on the right with the company name, logo, URL, number of employees, key players and advisors and important investors. Along the bottom of the page a short, wide box shows at-a-glance financials: gross revenues, expenditures and net for the current year and the next 3-4 years. The middle of the page includes short 200-400 character paragraphs on the following topics:• One Line Pitch• Business Summary• Management Team• Customer Problem• Product/Service• Target Market• Customers• Sales/Marketing Strategy• Business/Revenue Model• Competitors• Competitive AdvantageThe one-page executive summary isn't easy. In fact you may get incredibly frustrated trying to boil down your big idea into only one-page (here’s an example template I’ve created to illustate the layout). But taking the time to do it well is one of the most important things you can do. Remember, it just might be the one thing an investor reads right before deciding whether to move on, or to spend some time with you.II. Pitch DeckTo tell your story you will need to craft a great pitch deck. In my years as an angel investor I've seen hundreds and hundreds of presentations. Without a doubt the best investor presentations use consistent building blocks, have the right assembly and the components are arranged in a strategic flow (which will be covered in the next article). First things first.You Actually Need Two Versions of Your DeckSurprise: you should have two different versions of your deck--one that has lots of white space and relatively few words that you use as a back-drop to a live presentation, and one that has enough words that it can stand on its own if you need to email it to someone. Never email the white space one or present from the wordy one. And don't try to get by on just one version. Both mistakes are going to lead to bad results.Metadata MattersThe single most important data to include in your deck is your contact info--list every single means of getting in touch with you. Put it on the very first slide. Sounds like a given, but the stories I could tell you...Deck Building BlocksWhat does the deck need to have in it? After your contact information, it should cover the following topics in a 10-15 slide deck that can be delivered in 10-15 minutes, no more no less.1. Customer Problem: description of customer pain and how you solve it--concept & key elements2. Product Overview: what you do, for whom and why it's compelling3. Key Players: founders, key team members, and key advisors, with industry backgrounds and expertise4. Market Opportunity: market size, growth characteristics, segmentation5. Competitive Landscape: competitors and competitive feature sets, plus your sustainable competitive advantages6. Go-To-Market Strategy: how you will sell your product7. Stage of Development: product development, customer acquisition, partner relationships8. Critical Risks & Challenges: what can go wrong and how you plan to manage it9. Financial Projections: how much time and money it will take to get to cash flow break-even and five year projections (best to show Yr5 mid-case, worst case and best case with key assumptions)10. Exit Options: categories of likely buyers, rationales, list of specific likely buyers and comparables with valuation multiples11. Funding Requirements: how much, what you will use it for, what milestones you can hitThat's it. Trying to do much more is not going to make your pitch more effective--it is merely going to increase the likelihood that you will not get through it, which can be the kiss of death. Details can be drawn out in the Q&A or during subsequent due diligence. Instead you should focus on covering all of the key elements to ensure you get the next meeting. If you have extra material, stick it in an appendix in case you need to flip to it during Q&A.Tips on Mechanical Construction and DeliveryMechanics matter too in successfully presenting your deck. Consider these points:• Consider avoiding complicated animations or builds in your deck--they make it very hard to go backwards if you need to. Do not build in any videos--it is an AV disaster waiting to happen. Plan ahead to avoid last minute changes to your deck--swapping and fumbling while everyone waits for you makes an unprofessional first impression and wastes your presentation time.• You may want to avoid exotic presentation programs like Prezi. Even PowerPoint can be pretty buggy on some machines, so you may convert to PDF, but check the conversion before sending to make sure it didn't introduce any embarrassing formatting glitches.• Do not plan to spend time on product demos--just a couple screenshots if necessary.• Plan for the worst in terms of screen size: no small fonts. And finally, bring multiple memory stick copies, as well as your own remote.• If it makes more sense to use the remote that is provided, get familiar with it before starting so you don't get flustered and make a hash out of your presentation.With some time up front and some practice, you will be well on your way to having an effective pitch deck.For more on how to write the pitch deck and make it flow, see: Getting Your Story Straight - Pitch Deck Flow. For more on fund-raising in general, I’ve covered a ton of topic in my Inc. Magazine column.

Step 1: Identify and Name the ProcessFigure out which process you are going to document first. Determine its purpose (why and how the process will benefit the organization) and provide a brief description of the process.Step 2: Define the Process ScopeProvide a brief description of what is included in the process and what is out of the process scope, or what is not included in it.Step 3: Explain the Process BoundariesWhere does the process begin and end? What causes it to start? And how do you know when it’s done? Get these boundaries well defined.Step 4: Identify the Process OutputsEstablish what will be produced by the process or what result the process will achieve once it is completed.Step 5: Identify the Process InputsList down what resources are necessary to carry out each of the process steps.Step 6: Brainstorm the Process StepsGather all information on process steps from start to finish. Either start with what triggers the process or start at the end of the process and track back the steps to the starting point.The brainstorming session should involve those who are directly responsible for the process tasks or someone with extensive knowledge of it, as they can provide precise data.Step 7: Organize the Steps SequentiallyTake the list of steps you’ve come up with and put them in a sequential order to create a process flow.Keep the number of steps to a minimum and if a step includes more than one task, list them under the main step.Step 8: Describe who is InvolvedDecide each individual who will be responsible for the process tasks. Define their roles. Keep in mind to mention their job title rather than their name.Also be considerate about those who would be referencing the document. Write it in a way that any employee with a reasonable knowledge can read and understand it.Step 9: Visualize the ProcessThis is to improve clarity and readability of your documentation. Using a process flowchart, neatly visualize the process steps you’ve identified earlier.Step 10: Note down Exceptions to the Normal Process FlowA business process may not always follow the same flow due to various reasons. Mention these exceptions and what steps will be taken to address them.Step 11: Add Control Points and MeasurementsIdentify where risks could occur in the process and add control points to help the process owner when monitoring the process.Establish measurements to determine the effectiveness of the process and to help improve it.Step 12: Review and Test the ProcessGather everyone involved and review the process flowchart you’ve mapped. Are there any missing steps? Is everything in order? Once done, test the process and see if you’ve missed anything.

Thanks for the A2A.Rather than address the merits of this type of business, let me instead focus on the question of investor expectations in terms of pitch documents.Business Plan Is Not A Communications ToolYou may not be invoking the term of art “business plan” on purpose, but just for the sake of clarity, most people think of a business plan as a 50+ page detailed plan for exactly how you are going to go about developing the business. Not everyone does such a document (MBAs are probably far more likely than others to do so), but it can undoubtedly be a helpful planning document to flush out the many details associated with your business development.However, it is a planning document, not a communications tool. Investors do not want to read a long business plan like that - they do not have the time or the interest to read something like that as part of their assessment of whether they want to spend time with you.What do they want? Two things: (1) an executive summary or “one pager” that gives a quick overview of your business opportunity and (2) a powerpoint style slide deck that provides a visual walk through the key issues.How do do those things? Lets start with the executive summary.The executive summary is an at-a-glance fact sheet summarizing everything important about your business. Although it may be a hassle to create, it is vitally important.What is the purpose of an executive summary?An executive summary serves several purposes:It provides a condensed quick reference guide to your business in a format the typical reader (an investor) is going to find familiar.It is a chance to demonstrate the clarity of your thinking and your communication skills.It is a piece of "collateral" that an investor can use to discuss your company with other investors and solicit their input--it reduces friction by saving investors the trouble of having to re-summarize the company themselves, keeping your description intact.It gives visual learners an easy way to quickly absorb your business vs. having to read many pages of documentation.How much weight do investors give the one pager?They count for a lot. Executive summaries are the basic currency of the startup investing world. They are often the only material a potential investor will read before deciding whether to engage further. Nothing beats a face-to-face meeting if you can get one, and the executive summary is often the ticket to that meeting. And it can create investor-to-investor traction because it is the tool investor's use to pass the opportunity along and seek input.Can I get by with just a slide deck?No. You absolutely need a one pager, and you also need a slide deck. You need them both for one important reason: the process and discipline of preparing a very good one page executive summary will really clarify and tighten your thinking. The process of writing it will make you far more cogent in talking about your business--both in person and when using your presentation deck.If the quality isn't great, does it mean I don't get a meeting?Yep, pretty much. A really strong endorsement can *sometimes* save you, but a sloppy or bad executive summary is a big red flag. And justifiably so. You have all the time in the world to prepare your executive summary. You've had access to mentoring and advice received through networking. If after all that, you cannot pull together a good one pager it raises questions. Investors will wonder--Do you care enough about this project to bother? Were you unable to network or do the needed research or be bothered to find help? Are you un-coachable? Are you a poor communicator? The list of potential negative inferences is long (and there are pretty much no positive inferences). Good investors worth having in your company see a lot of executive summaries and plans every month. The sheer volume teaches them to look for signals to help figure out where to most efficiently spend their time. A low quality summary is a strong signal to focus elsewhere.What needs to be in this thing?The executive summary should include most of the same topics from a basic slide deck (which I will cover in my next column), but the details are tightly packaged and sparingly worded to fit on one page, or at most, the front and back of a single sheet. The typical format includes a box on the right with the company name, logo, URL, number of employees, key players and advisors and important investors. Along the bottom of the page a short, wide box shows at-a-glance financials: gross revenues, expenditures and net for the current year and the next 3-4 years. The middle of the page includes short 200-400 character paragraphs on the following topics:One Line PitchBusiness SummaryManagement TeamCustomer ProblemProduct/ServiceTarget MarketCustomersSales/Marketing StrategyBusiness/Revenue ModelCompetitorsCompetitive AdvantageThe one-page executive summary isn't easy. In fact you may get incredibly frustrated trying to boil down your big idea into only one-page. But taking the time to do it well is one of the most important things you can do. Remember, it just might be the one thing an investor reads right before deciding whether to move on, or to spend some time with you.OK, now that we have tackled the executive summary, let’s look at the slide deck.There are really two questions with the slide deck: (1) what to include in it and (2) what order to put those topics in.(1) What to Include in an investor slide deckIn my many years as an early stage investor I've seen hundreds and hundreds of presentations. Without a doubt the best investor presentations use consistent building blocks, have the right assembly and the components are arranged in a strategic flow. But first things first.You Actually Need Two Versions of Your DeckSurprise: you should have two different versions of your deck--one that has lots of white space and relatively few words that you use as a back-drop to a live presentation you make, and another version that has more words - enough words that it can stand on its own if you need to email it to someone. Never email the white space one or live present from the wordy one. And don't try to get by on just one version. Both mistakes are going to lead to bad results.Metadata MattersThe single most important data to include in your deck is your contact info--list every single means of getting in touch with you. Put it on the very first slide. Sounds like a given, but the stories I could tell you...Deck Building BlocksWhat does the deck need to have in it? After your contact information, it should cover the following topics in a 10-15 slide deck that can be delivered in 10-15 minutes, no more no less.1. Customer Problem: description of customer pain and how you solve it--concept & key elements2. Product Overview: what you do, for whom and why it's compelling3. Key Players: founders, key team members, and key advisors, with industry backgrounds and expertise4. Market Opportunity: market size, growth characteristics, segmentation5. Competitive Landscape: competitors and competitive feature sets, plus your sustainable competitive advantages6. Go-To-Market Strategy: how you will sell your product7. Stage of Development: product development, customer acquisition, partner relationships8. Critical Risks & Challenges: what can go wrong and how you plan to manage it9. Financial Projections: how much time and money it will take to get to cash flow break-even and five year projections (best to show Yr5 mid-case, worst case and best case with key assumptions)10. Exit Options: categories of likely buyers, rationales, list of specific likely buyers and comparables with valuation multiples11. Funding Requirements: how much, what you will use it for, what milestones you can hitThat's it. Trying to do much more is not going to make your pitch more effective--it is merely going to increase the likelihood that you will not get through it, which can be the kiss of death. Details can be drawn out in the Q&A or during subsequent due diligence. Instead you should focus on covering all of the key elements to ensure you get the next meeting. If you have extra material, stick it in an appendix in case you need to flip to it during Q&A.Before moving on to how to build a good flow, here are some tips on mechanical construction of your deck and its delivery.Tips on Mechanical Construction and DeliveryMechanics matter too in successfully presenting your deck. Consider these points:Consider avoiding complicated animations or builds in your deck--they make it very hard to go backwards if you need to. Do not build in any videos--it is an AV disaster waiting to happen. Plan ahead to avoid last minute changes to your deck--swapping and fumbling while everyone waits for you makes an unprofessional first impression and wastes your presentation time.You may want to avoid exotic presentation programs like Prezi. Even PowerPoint can be pretty buggy on some machines, so you may convert to PDF, but check the conversion before sending to make sure it didn't introduce any embarrassing formatting glitches.Do not plan to spend time on product demos--just a couple screenshots if necessary.Plan for the worst in terms of screen size: no small fonts. And finally, bring multiple memory stick copies, as well as your own remote.If it makes more sense to use the remote that is provided, get familiar with it before starting so you don't get flustered and make a hash out of your presentation.With some time up front and some practice, you will be well on your way to having an effective pitch deck.(2) What Order to Put the Elements InThere is probably no one right answer here, because each company is different and each investor is different, but here is how I think about it.Decent entrepreneurs can succinctly explain what their product does. Good entrepreneurs can describe their market and their customer. Funded entrepreneurs can pitch their company in terms that an investor can relate to.For most entrepreneurs, it's neither easy nor intuitive to put the investor version of the story together. It is easy to talk product, customer, and maybe market. But when you are talking to investors, your company is your product, and you need to pitch in a way the investor can grab onto.Fortunately, there is an easy formula that works nearly universally. The key to this formula is that it covers all the required subjects (listed above), but strings them together into a coherent and engaging narrative flow.You need to cover all the building blocks, but the key is in the arrangement of those blocks. You need a framework that will allow you to build an engaging narrative flow. Here is a picture of what I think is an almost universally good framework, followed by a walk through its individual pieces:The astute may have noticed team is not first. Many investors say the team is the most important thing, and I agree, so some people recommend that you start with the team. They are wrong. We are trying to craft a narrative here--hook them with the story of the customer and the problem. Team is important, but as you can see from above it just comes later in the flow. Here are the building blocks, piece by piece, in order.Problem & CustomerEvery time I sit down with an entrepreneur for the first time, I always start the conversation the exact same way. Before we've even settled in, I'm already asking "who's the customer and what's their problem?" If you are telling a story, this is the logical place to begin. As an entrepreneur if you cannot describe who your customer is and what problem you are solving for them, you've got work to do.MarketThe next thing to do is to talk about how these customers make a market. What its size is, whether it is growing, if it is fragmented, is it ripe for disruption, who the other players are, etc.; in short, what makes it interesting.SolutionHere you want to talk about the solution. Focus on the pain relief, rather than the product. These are the attributes of the product that solve the problem. Highlight benefits, not features. Explain what the perfect solution looks like, not all the details about what you have built.ProductHere is where you say, "yeah, I've built a solution with those required attributes, and I've solved it in a cost-effective way." Given enough resources, anyone could solve virtually any problem. Emphasize how your solution is both practical and economically viable.PlanThis is the story of how you are going to get your solution to the customer. Your business model, your go to market strategy. What are you actually going to be doing and selling and what the key challenges are going to be along the way.Go To MarketHere is where you get more specific about your actual sales strategy. Are you selling with a direct sales force, over the web, through partners, through distributors? Where are these customers and how can you locate them, talk to them, and bring them on board cost-effectively? What is the customer acquisition cost going to be relative to the life-time value? (Hint: LTV better be higher than CAC, or you're in trouble.)Your AwesomenessNow that your listener has a handle on what you are doing, it's time to tell them why you have the stuff to pull it off. Yeah, you are super-smart and have the right education, skills and experience, but you also gel as a team. Keep in mind that a high-functioning team is very different from a group of high-functioning individuals. Investors are looking for 1+1=3.Company DevelopmentHere is where you talk about where you are, where you have been, what you need to do next, what resources it is going to take, and how long it's going to take. You are going to talk about a plan that makes sense, is realistic in terms of both time and resources and is sequenced logically.Financial ModelNow that your potential investors understand what you are going to do, let's talk about the resulting financials. What is the revenue model? What kinds of gross and net margins will this company generate? How fast can it grow? How much capital will be needed down the road?Exit OptionsLooking forward, let's assume your business starts to grow. Take time to consider who the potential buyers might be. Who will care about what you have built? Are there different kinds of potential buyers? What will they value the company for? What kinds of prices are they likely to pay? How much traction/revenue/growth is required before the company will be of interest to them?Call to ActionA great call to action needs to express that you know you need help and your desire to get them involved. Start the dialog by providing the details of your current fund-raising.This formula allows you to take an enormous amount of detail and weave it into a narrative that hooks the listener immediately with a human interest story about a customer and their problem, and starts an interesting discussion about solving it. The result has flow. Flow is key to telling a good story and is key to organizing your company's information into a cohesive investment hypothesis. Of course this is not the only way to do it, but it's a tried and true template that works well and has had proven success.I hope this helps. If you want more advice on how to pitch well, I’ve covered some of the issues here:When Teamwork Isn't Better: It's A Mistake to Tag-Team Your Pitch25 Mistakes To Avoid When Pitching InvestorsAvoiding The 9 Worst Pitching Thin Spots