The first thing every entrepreneur or business owner needs to have is his elevator speech.
What is an elevator speech?
It is how you will answer the question of what your business or idea is in the time it takes to ride an elevator with someone — roughly between 30 seconds and one minute. Your elevator speech may be the only chance you have to get someone interested in what you are doing so it has to be good. Your elevator speech should include what is unique about you, should be easy to say and understand and you must believe it and say it with passion.
When you are preparing a full presentation to give, most people tend to think more is better. We have to tell a potential investor everything we know in dozens of slides and we have all the time we need because they are going to be so spellbound by the greatest idea they have ever seen.
The reality is that investors see lots of presentations and are looking for good ideas presented well. Guy Kawasaki, former chief evangelist for Apple, Inc., and managing director at venture capital firm Garage Technology Ventures, has published his rules of thumb for a successful investor presentation.
10-20-30 is the rule of thumb everyone should use. Your Powerpoint presentation should have no more than 10 slides, last no more than 20 minutes and have no font smaller than 30 points.
Ten slides is a good number because it is difficult to comprehend more than 10 concepts at a time. More importantly, if it takes more than 10 slides to explain your business or idea, it is either not very good or you are not focusing as well as you should be, which is a sign of problems for your business.
Twenty minutes is generally a good time to use for the actual presentation. If you have an hour time slot you need time to set up and allow plenty of time for questions. This also goes along with the 10 slide rule. If you need more than 20 minutes, you are probably conveying too much information that won’t be absorbed.
Thirty point font is important for any presentation. When using Powerpoint, you do not want your audience to be reading and not listening. You want your slides to support the message you are conveying. People giving presentations want to try to put everything they know on a slide either because they think the audience needs to see it or because they need to read it for their presentation.
You never want to read information from your slides because when your audience realizes what you are doing they will be reading ahead of you and not listening. It shows that you are not really prepared to give a presentation and again that you are unable to focus on the most important elements.
Your 10 slides should talk about the topics an investor is most interested in. They should include:
1. Problem
2. Solution
3. Business Model
4. Technology/product/service
5. Marketing and Sales
6. Competition
7. Management Team
8. Financial Projections and Milestones
9. Current status and timeline
10. Summary and call to action
The time you spend on each slide should be evenly spaced. All of these topics are important. Most inventors and entrepreneurs want to spend most of their time talking about the product or technology, and skip over or minimize the other elements. If you are just inventing something that is important, if you are building a business, other elements are more important.
Practice, practice, practice your presentation until you are doing it in your sleep. Be prepared to give a dynamic, knowledgeable, passionate presentation and to answer questions. Find people who will let you practice on them so you are presenting to a real person.
There are also things an investor does not want to hear from you because it indicates that you really have not done your research and are more passionate than realistic about the business opportunity.
Never say your projections are conservative. You want to build financial projections that are realistic based on the research you have conducted.
Never say your market will reach $50 billion by 2013. This is a big, general number that shows you really don’t know what your market will really be. And no matter how big the market you have to know how much you can get and how. You also can’t say you only need 1 percent of this market to be successful. First, you don’t want to reach just 1 percent of a market and it is not easy building market share. You have to know what you can really do, not just general percentages.
Never say someone is going to sign a purchase order next week or as soon as we receive funding or any other timeframe. If it is not signed it doesn’t count.
Never say no one else is doing or can do what we’re doing. That either means there is no market or you haven’t done your research on competition.
Securing financing from an investor is never easy, nor is it guaranteed, but hopefully if you follow these guidelines you will be better prepared to make a quality presentation.
Loretta Daniel is director of the Murray State University Regional Business and Innovation Center. She can be contacted at 270-809-6071 or loretta.daniel@murraystate.edu.
