Alchemist entrepreneurs - congratulations on approaching demo day! You'll soon be surrounded by interesting people, inundated by emails, and distracted by countless potential conversations that you'll need to prioritize carefully. Having been involved with Alchemist for a couple years now, and seeing more than a couple "demo days" across various incubators, here's a couple tips I hope you'll find useful:
1) Remember that 5 Minute demo day presentations are NOT enough time (usually) for listeners to decide whether to invest or not. Your goal for the demo day presentations, therefore, is to attract the attention and trigger the NEXT CONVERSATIONS with the individuals in the audience that could be the best sources of feedback / investment ($) / advice / or customer introductions.
* Sometimes all of these dimensions happen all at once, usually feedback and "advice" happens first as a precursor to investment + introductions.
* None of these dimensions, however, will happen if the listener (for whatever reason) decides they are not interested in having a follow-up conversation.
* If you think someone or some firm could be a good fit for you - then be prepared to find the right balance of being persistent without being annoying (or unprofessional) in getting their attention.
2) The demo day presentations are only 5 minutes! Since they are so short, you need to present in "broad brush strokes" that capture the most important highlights. You have to prioritize what content to present and what details to highlight most efficiently.
* Sometimes the slides you already have for "full" 30/60 minute conversations with investors are good ones to reuse. Usually you'll need to edit carefully to ensure that the best top-level take-a-ways or "aha moments" are the ones you present.
* Pay special attention to feedback from listeners who are hearing your pitches for the first time, domain experts who know your space, and non-experts who don't know your space. Each of them will give you different types of feedback, and you'll need to decide who to optimize for carefully.
3) In my opinion, the most important questions you want to answer in the 5 minute demo day pitches to trigger follow-up from the right people (individual angel investors, or VCs) are as follows.
Strong demo day presentations usually weigh heavily towards A + B + C, with lighter treatments of D + E + F (due to time constraints). Follow-up conversations, and deeper diligence from potential investors will go deeper into areas B + D + E + F, and you can identify individuals/VCs who are a better "fit" for your companies on the basis of how well they already understand A + C, and how deep they can dive into discussing D + E + F. Individuals/VCs who don't already share your opinions about A + C are either going to be a waste of time, or are going to require a lot of time investment from you to be convinced (so prioritize your time investments with them accordingly!).
a. Why now? Compelling answers to this usually involve something significant changing in the market, with new/different customers or pain points that are growing, or new technology breakthroughs enabling problems to be solved, or something else encouraging different behaviors (such as government regulation or customer psychology).
* All of you are smart and talented - articulate (in simple terms to someone who is not an expert in your field) why you are excited and passionate enough to be dedicating your life to your companies right now.
b. Why you? The big opportunities and major inflection points across industries will be discovered by several, usually many different teams. What makes your insights unique or authentic?
* What experience or exposure do you have to the domain? Have you or your co-founders been entrepreneurs before, or have you had other exceptional experiences in your life that will make you succeed when others give up?
c. Target Market. What subset of the market and subset of customers are you going to start targeting first, and how big can that "slice of the pie" get as you grow your product / team / business?
* Most VC's focus and talk about $Billion dollar markets because its difficult to build large businesses in small markets, but it's VERY rare that new products and new companies can target actual $Billion dollar markets from the start. Usually, whether limited by feature set, market awareness, or geography, most startups have to start by focusing on small pieces of big markets to grow into bigger markets and bigger companies.
* I prefer to see a tighter focus and deeper understanding of smaller markets as precursors to bigger / quickly expanding markets rather than claims to HUGE markets that are crowded with competition or demonstrate lack of focus or deep understanding of target customers.
d. Product (or service). What are you building, creating, or enabling? A single sentence that clearly articulates (again in simple terms that someone who is not an expert in your field can understand) is best. That single sentence will keep evolving and getting better, and it will get more detailed when you explain it to people with more expertise, but you should aim to distill the core of what you are building to a single sentence that can be communicated and remembered as UNIQUE.
* What signs of customer validation, or market adoption, or business potential do you have?
* What is the longer-term product roadmap, and what will the pillars for competitive differentiation become?
* Are you 2x better or 10x better than the alternatives? Across what dimensions and subject to what assumptions?
e. Business Model. At the seed stage you don't need to have the worlds more comprehensive business model, nor a combination of 3 different business models. You do, however, need to have some ideas on how you might start to capture the value or benefits that you provide.
* Again, what signs of customer validation or business potential do you see? Deep understanding of how much customers are paying for alternatives, or inferior solutions, or notable competitors in the market are good proxies.
4) Have fun and stay positive! The demo day pitches and many conversations that will follow are a unique and special time for you as entrepreneurs. Build relationships with everyone you connect with, follow-up with the people that seem most knowledgeable or potentially helpful to your entrepreneurial journeys, and don't let the many NOs and countless lack of responses you will encounter discourage you from climbing up the path you are on, and are privileged to see where others are blind or where others are too scared to venture.
Onwards!
Try to have your decks cleaned up and close enough to the final presentation as possible. It will be easier for those giving feedback if they can focus on the pitch itself and not on the cosmetics of the pitch.
___________________________
Some advice / resources in crafting your pitch:
1. Less is More
On the Google Drive Folder (under Resources > Fundraising) you will see a folder of pitches that raised well (these are individual VC meeting pitches). What is striking about pitches that I have seen raise lots of money is that they are incredibly simple. For bold innovations you do not need heavy slides. You need compelling, simple points. If you use bullets, have no more than 3 on one slide and use large font, we suggest nothing smaller than 60pt.
2. Keep Things Visual
People should understand the takeaway of a slide in 10 seconds. All things being equal, visual representations are far more compelling in delivering information than text. Render data visually. Use images that will trigger you with the story you want to discuss for that slide. However, avoid using too many animations as it tends to get distracting rather than being effective in a short pitch.
If you need a designer, contact one of the Designers listed here. The sooner the better. Once you have a template, you can add content around it.
3. Use Fighting Titles
Use titles that make arguments, or points, not expositions. E.G. Use: Our Market is Gigantic, not "Market" on your slides
4. Structure / Deck Format Details
Great Demo Day pitches are movie trailers, not movie summaries. That is, you just need to tease the audience with enough info to get invited to a 1st meeting. You don’t need to condense a 1st meeting pitch into the shortened time frame of a Demo Day Pitch.
To that end, list out the top 3 most compelling aspects of your venture as an investment for the investor. Next, list out the top 3 risks -- and then, how you are going to mitigate these risks.
With these six pieces, compose them together into a story. People remember stories, they don’t remember facts. Stories have protagonists, antagonists / tension, and a resolution. They have an emotional component - and an Arc. Form a story around these pieces.
Watch other pitches, and model how your 6 pieces would fit if you followed their arc.
On the Google Drive under Resources > Fundraising > Fundraising Materials > Demo Day Decks & Videos..., watch these pitches for how to tell a story:
Raised $2m on a $6m pre without revenue.
Note: Airpost had no paying customers. Look at how they positioned the “customer development partner” in a way to give you confidence on the product / market fit. Also look at how the CEO’s word choice made him feel like an expert in the space.
Probably one of the most successful Demo Day videos. Assemblage had $1m wired into their account three days after their Demo Day (the pitch was on a Thursday).
Raised $2m on a $12m pre.
Podcast
Model Slides
Jack Fuchs’ Financial Projections - slide 27
This is all you need -- just Revenue, Gross Margin %’s, Cash Flow, and Revenue Drivers
A good team slide: Wise.IO
See how they combine the Advisory Board with the Team to make it look bigger. They de-emphasize people’s names and titles. They emphasize accomplishments.
*Deck Format Details:
The ideal aspect ratio for your presentations to look best on the big screen is 16:9. (If you’re unsure of how to do this you, follow the instructions here.) Please format your decks in PowerPoint only. A short video or pre-recorded demo are acceptable ways of getting your message across and can be used in conjunction with the presentation. Please have your decks set up this way by the on-stage rehearsal.