5 Best practices to ace your demo day startup investor pitch
Demo Days offer an excellent platform for upcoming startups to showcase their business to prospective investors and the entire startup community. Winning at Demo Days offers you much needed confidence and lots of free publicity. But is it easy to ace your Demo Day startup investor pitch?
Not really. Demo Day startup investor pitches are extremely difficult because of the paucity of time. Startups are allowed no more than 5 to 10 minutes.
How do you communicate so much information in such little time? How do you make a mark in just five minutes? The usual tips for presenting to investors do not apply to Demo Days, because usual investor pitches are 20 minutes long. Good presenters know that and make their pitches more like movie trailers. They share a small amount of information that excites and fascinates their audience.
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Here are five best practices I have uncovered while watching and attending Demo Day startup investor pitches, from Y Combinator and TechCrunch Disrupt in the US to Microsoft Accelerator and CIIE in India.
1) Start strong
Attention is a scarce commodity in every presentation. No one pays attention to anything nowadays. I have seen investors checking their smartphones even during five minute Demo Day pitches.
You win or lose your audience in the first 60 seconds. Smart founders start strong and earn the attention for the rest of their pitch in the very first minute. Here is an example of a good start by the startup Player’s Health at the Google Demo Day 2016.
“There are over 46 million athletes playing youth sports in the United States today and we do a horrible job at managing their health and wellness. When injuries occur, parents are often kept out of the loop entirely and coaches are making their best guess to determine what actually happened and whether it would (be) safe for athletes to return to play. And when they guess wrong, it’s never good. It happened in my case; when a serious neck injury went unmonitored and forced me to end my professional football career years too early.”
Tyrre Burks, the founder, delivered this opening statement in 25 seconds. He was able to achieve three things with this.
- One: hint at the size of the opportunity (46 million athletes!)
- Two: build expectations as to how the story would unfold.
- Three: share his motivation behind all this through a personal story of loss.
Tyrre added one more story later where he talked about a young athlete who died. He highlights what ails the existing system through this story. This brings me to the next best practice – stories.
2) Tell a story
Stories are powerful. Bollywood is a multi-million dollar industry. Fiction is the most popular genre in books. Stories entertain and inform us. Yet, the power of this medium is highly underleveraged in the field of business.
Using a story in your Demo Day pitch will get the audience to pay attention, make it easier for them to understand you and ensure that the message will remain with them for a long time. Such is the power of a good story. Here is an example of a well narrated story.
“In our journey as a startup, all of us have that inflection point from which everything else changes. In our life, that happened about a year ago, when I received this call from the CIO of a major automobile billion dollar company. He had heard about us from a Gartner Cool Vendor listing that we received earlier that year and wanted to discuss whether industrial IoT could truly help him scale faster. As you would imagine, this was music to my ears, running an industrial IoT platform company… We were able to drive a 75 lakh bottom-line improvement per plant per annum for this company. What that translated to was a revenue increase opportunity of 3.5 crores per plant per annum.”
Vinay Nathan of Altizon Systems started his pitch with this story. Through this, he talked about who his customer was, what problem he was solving and what the benefit to the customer was. Contrast this with the alternative route most other startups take. Slide 1: Problem. Slide 2: Solution. This is boring, and does not create any excitement in the audience. Tell a story and see the difference.
3) Share three remarkable things about your startup
You cannot share everything about your startup in five minutes. You need to prioritise. Your audience can possibly remember only three things from your presentation. What do you want those three things to be?
The answer will vary from startup to startup. Successful startups will include traction in the list. A young startup at an idea stage will talk about the unique solution and validation of the idea. Some other startup will show you the names of its famous clients to ‘prove’ that they are on the right track.
The aspects which you will have to cover are the following:
- The problem you are solving
- Your solution
- What is unique or special about your solution?
- Who is your customer?
- Traction and client names (if applicable or worth sharing)
- Team (the best presenters never spend more than 45 seconds on this slide)
- Your vision / motivation (to rally the audience behind your cause)
- The stage of the company (when it was started, whether it is funded or not, and is it seeking funding?)
4) Clarity trumps everything
You may have been in this business for a year, but your investor is meeting you for the first time on Demo Day. He/she is totally clueless about your business and is not an expert in your industry either. In this circumstance, it is imperative for you to aim for clarity above everything else. Ace Silicon Valley investor Vinod Khosla has said,
“80 percent of the presentations… you don’t even know what the problem is till 15 minutes into the presentation.”
You can understand how serious and pervasive this problem really is. This happens due to what is known as the ‘Curse of Knowledge’; you do not know how it feels to not know something. That’s why you complicate things and talk in abstract terms.
5) Show don’t tell
Demo Days got their name because they started as platforms where tech startups could demo their cool stuff. While a demo is not compulsory, if you can, you must have one.
A demo can be live, recorded or a series of screenshots. Live demos are the best, but you run the risk of a technical snag. The alternative to a live demo is a recorded demo. You can pre-record your demo and run the video instead. If your product is not ready, a few screenshots will go a long way in making people understand and getting them excited.
A good demo can help your audience understand the problem, the solution and the unique features and benefits of your product / service. If you want to see how it’s done, go and watch the startups at TechCrunch Disrupt. The duration of your demo will depend on your product. Vurb, a tech startup, showed a demo for 4 minutes of its 6 minute and 30 second pitch.
There are many startups for which a long demo does not make sense. A startup which makes board games for teaching mathematics need not have a long demo. They can have a very short demo and carry the game in their hand. They must also give a sample piece to the judges and let them touch and feel it.
To summarise, you need to start strong and capture the audience’s attention right at the outset. Share a story to make your pitch memorable; it could be a personal story or a customer story. Focus on three things you want the audience to remember from the pitch; never try to say everything about your business. Remember that clarity trumps everything; if they don’t understand you, nothing else will matter. Finally, try to show your work through screenshots or a demo.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)