By this point in the VC pitch I know your teams bio’s, the 50,000 foot view of what your business does, the big problem that you’re solving. Now it’s time for the meat. I want to know in detail what you actually do and how you do it. I think this is where a lot of companies get hung up. It can be quite hard to tell me what you actually do in a concise way. I’m sure you have a million features and are solving a ton of problems. Many companies that pitch at this stage are “all over the map” in terms of explaining what they do. I think that it still boils down to giving me a simple explanation of how you solve that big problem you told me about on the last slide. Otherwise my brain is spinning wondering, “WTF do you actually do … and more importantly … why?” Honestly, about 20% of all meetings fall into this category.
Slide 3: Tell me how you solve this big problem.
To stick with the used car example problem from the last post, you need to tell me how you’re going to overcome the trust issue to allow consumer-to-consumer sales of cars. On the last slide you listed a graphic showing the flows of used auto sales in the US and the percentages that flow from consumer-to-business and business-to-consumer as well as the percentage that goes directly from consumer-to-consumer. Slide 3 shows the new flow of goods and information targeted at creating a trust based C2C auto sale.
You outline the following as your process and say “let’s start from the seller’s perspective”:
- Consumer who wants to sell their car finds your site and signs up
- We arrange for an inspection of their car from the national car inspection company that we did a deal with
- We have an online form that captures all of the relevant information that a seller needs to sell his/her car
- We did a biz dev deal to get car data that shows the seller the exact price range to sell based on car condition, options and geography
- We built a car CRM tools that enables the seller to publish his data to multiple website distribution partners (deals we have signed) and to monitor activities on these sites.
- We have signed 3 patents you have filed to protect our innovations
- We did 6 biz dev deals did and here’s why our partners are excited to help
Now let me explain how the flow works from the buyers’ perspective … and you walk back through your chart from the opposite direction (or if necessary to make this slide uncluttered you can tell me what you do in 2 slides).
Following this slide I should have a pretty detailed understand of what you do and how it solves the problem but I’m probably wanting to visualize it more. I personally believe that this is the perfect place in your presentation to dip out into a quick demo.
The classic mistakes people make on this page in the presenation are:
- Too much detail, too fast. I think you need to “peel back the onion” and get the VC engaged and make sure he/she understands what you do. Don’t assume a nodding head means they do. I recommend that you “test” their understanding a bit by asking a few questions. Anyways, VC’s (like most people) like to hear themselves speak (I’m no exception) ;-) so asking questions will also make sure that the meeting has two way dialog
- Too unfocused. In the excitement to tell me everything you know and everything you do, you end up covering too much and I don’t end up taking away the key points. I believe that describing your business follows the same advice I give people for resumes, “when in doubt, leave it out.”
- Not tying the “what we do” concretely enough to the “problem the market has”
- Finally, I think it’s a mistake to spend too much time on this slide. Keep in punchy and energetic. I think the sooner you get to your demo the better. If the VC gets too hung up on pedantic questions about what you do I recommend the following: answer the question briefly, take a note down and say, “hopefully I’ve answered your question at the basic level. If it’s OK with you, why don’t I show you the demo and I’ll circle back afterward to see if you still have that question.” Remember: meeting management is a skill that the best CEO’s possess.
Next post I will cover how to do a good demo. Surprisingly most people suck at demos. The next post is here