Last week, I observed various presentations to raise funding for software technologies to genome-data analytics. Virtually all failed to deliver an effective message to attract experienced investors. Ever since I.T. companies developed software applications that can facilitate putting together powerpoint presentations easily, anyone can stitch a slide presentation in a few days. Yet many fail to deliver their message effectively since the slides don’t follow the key ingredients to an effective presentation.
Let’s take an extreme example on how precise and key are the design of the slides prepared by major investment or publicly traded companies. A former Wall Street investment banker related to me that her former employer, Blackrock, one of the world’s largest fund, required that she only concerned herself with the color of the background for the slides. With hundreds of millions at stake, any error or defects on any slide could be a costly proposition, including the right shade of blue. I, myself, have witnessed many presentations from publicly traded company CEOs, who had to persuade institutional investors who had direct impact on the valuations of their stocks. They were well prepared with simple, great graphics, with legible and direct bullet points, and to the point. All were svelte and precise. Maybe neophyte presenters should take heed on how to put together such slide presentations that follow the same guidelines from publicly traded companies. Not doing so will not attract the attention from investors.
I need to highlight the major errors in the slides to young companies or startups. The most common error I noticed was a simple message – what does the company do? Some commentators prefer to ask what problem is being solved, but I prefer just to tell me what you are. And that should be done within the first 2 slides. Although a little wordy, I use as an example the first paragraph from S-1 registrations constructed by the company’s management team, its lawyers, and accountants that serve the same purpose. Since these introductions influence the investments for millions, they must be carefully crafted:
Big Data Software: “Cloudera empowers organizations to become data‑driven enterprises in the newly hyperconnected world. We have developed the leading modern platform for data management, machine learning and advanced analytics. We have achieved this position through extensive collaboration with the global open source community, continuous innovation in data management technologies and by leveraging the latest advances in infrastructure including the public cloud for “big data” applications. Our pioneering hybrid open source software (HOSS) model incorporates the best of open source with our robust proprietary software to form an enterprise‑grade platform. This platform delivers an integrated suite of capabilities for data management, machine learning and advanced analytics, affording customers an agile, scalable and cost-effective solution for transforming their businesses. Our platform enables organizations to use vast amounts of data from a variety of sources, including the Internet of Things (IoT), to better serve and market to their customers, design connected products and services and reduce risk through greater insight from data. A vibrant ecosystem has developed around our platform, and a growing range of applications is being built on it. We believe that our solution is the most widely adopted big data platform.” (Cloudera S1)
Content: “Snap Inc. is a camera company. We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate. Our products empower people to express themselves, live in the moment, learn about the world, and have fun together. In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones. This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard. This means that we are willing to take risks in an attempt to create innovative and different camera products that are better able to reflect and improve our life experiences.” (Snapchat S1)
OTT Hardware: “We pioneered streaming to the TV. Roku connects users to the streaming content they love, enables content publishers to build and monetize large audiences, and provides advertisers with unique capabilities to engage consumers. We do this at scale today. As of June 30, 2017, we had 15.1 million active accounts. By comparison, the fourth largest multichannel video programming video distributor in the United States had approximately 13.3 million subscribers as of June 30, 2017. Our users streamed more than 6.7 billion hours on the Roku platform in the six months ended June 30, 2017, 62% growth from the six months ended June 30, 2016. TV streaming’s disruptive content distribution model is shifting billions of dollars of economic value. Roku is capitalizing on this large economic opportunity as a leading TV streaming platform for users, content publishers and advertisers.” (Roku S1)
Note how carefully the company is described precisely in a few sentences. These sentences can be further summarized into bullet points and simple graphics. Nonetheless, each punctuation and word need to be sparse and direct in each introduction.
The second common error is too many words or too many graphics on a single slide. In the many powerpoints from publicly traded companies, I noted the large typeface, simple messages. Why? There are hundreds of analysts in the audience. Any message can be distilled with carefully chosen words. And, if a multi-billion dollar company can achieve that, I cannot see why any startup cannot deliver the same message with the same spartan style. Just last week, I saw a startup presentation from the founder of a company in the same space as Betterworks – an HR company. Problem? Too much information on each slide. By the time the presentation was completed, I had no idea about the specific strategy that startup would be implementing to differentiate itself from Betterworks.
The third common error I noted is presenting the most fundamental points addressed by the 5-Ts and strategic outline described in my earlier blogs. Every major information from the Team to Financials should be addressed in the slides. That information is key to persuade the investor to be interested in the company, who needs to know the essential elements of the company. And, if during the presentation any section is left out, the startup will fail to attract any investment. Again, a bunch of startup presentations never showed me any financials last week or how its strategy outperformed competitors.
And one must hit the most fundamental points in a ten minute to a 55-minute pitch. This point is mandatory. I myself got interrupted with various questions during a pitch. I still look at my watch and make sure I get to state the fundamentals. In other pitches, I noticed that even one member of the audience would make comments, sometimes not germane, but I never let that deter the completion of the presentation. To achieve that, one makes sure one has practiced for a 20-minute window, even in a one-hour time frame.
Again, the presentation is the best selling point for the company to show to potential investors why it is an attractive investment. Not placing enough focus on the quality of that presentation will be costly.