25 Aug
2011
A CEO friend of mine, recently wanted my opinion about a new business plan, he was putting together. He is an expert in an area of b2b enterprise applications with great people and sales skills. I was excited to hear about his new ideas and help in any way.
He emailed me his deck earlier that morning before our meeting, so that I could have a chance to see it prior. As I opened the PowerPoint on my iPad, my excitement quickly turned to confusion, as I went from slide to slide of hundreds of bullet points and research background data. As I was seated early in our chosen meeting place I spent ten minutes reviewing the slides, it had many facts, but lacked the real story.
When my friend arrived, he was incredibly excited and I asked him to tell me about his ideas and this new business of his. As he talked to me about his ideas, he was clear, concise and passionate.
He described the market easily, the problems of how fragmented it was and how new technology and process innovations could dramatically change this multiple billion dollar market.
After listening to his ideas, I asked him, what he thought of his PowerPoint. My friend said that he was having trouble putting it together, in that he didn't want to miss anything, so he keep adding more things to it. He said that he had shown it to at least 10 people so far and that this latest release was version G of the presentation.
I asked my friend, if he saw this presentation, would he invest his own money in it?, would his peers invest, would his family invest? Knowing that he was also a musician, I mentioned what my music teacher had said to me early on, does the music I make sound good to my ears?
I reminded him of my simple 4 rules for raising money (see earlier post) and that he should simply take his passionate conversation and make that the PowerPoint. I suggested to him to consider the pitch like a classical orchestra movement, where the story crescendos at the high point and then finishes.
I then asked him what is your goal in these investor meetings? He said to raise money, I said of course, but what is the immediate goal?
He looked at me slightly confused and I said, for me the immediate goal is to leave the room having created a gut level potential sense of regret from the investor, that if they don't invest in you, they truly might miss out on the next Google.
Because if that happens, then you will get the traditional follow-on due diligence and partner meetings, which then hopefully lead to the term sheet.