Creating an Early Stage Series A Pitch

We see hundreds of early stage pitches every year. While some are good, many could be improved with better structure and content. Series A pitches have a different emphasis than pitches for later rounds. In early rounds, you need to convince investors that there is an attractive market opportunity when there is often very little real world validation around your business. You also need to convince investors that the team can execute in what is often the most difficult (or rephrased risky) time of trying to build a company.

If you search the web, you will find lots of resources on what to include in a pitch – however, here are some of the basics (these need to be adjusted as appropriate for your type of business and industry):

Market: the market should be described in such a way that it makes it interesting for the group of investors you are targeting. Sometimes it’s about bringing a disruptive innovation to a large established market (think Dell in PCs) or an emergent market that’s showing explosive growth (think YouTube in online video). All investors focus on the size of the market – basically the bigger the ultimate market, the more attractive it will be, but that does not mean you should throw out wild estimates (that has the affect of questioning your credibility which will hurt you more with investors than any small market size estimates)

Team: (a major focus for investors) — do they have right skills, experience and credibility?

Product: the product/solution should flow naturally from your analysis on the market i.e. it meets a critical need in the market; customers will want to buy (as opposed to you needing to convince them that they need this); and for business customers, the economic value is real and quantifiable.

Customers and market entry: as a Series A round its unlikely that you have many customers (if any). This is a very tough place for new startups and one of the major areas of risk for investors. You need to show investors you understand cold who your initial target customers are, their buying process, and how they will likely use the product (note: consumer Web 2.0 applications are different — its about the user experience rather than ROI). If you don’t know these or at least have some well grounded, working assumptions around them, then its like sailing in a fog. Based on these assumptions flow your target customers, channels, sales models, and product roadmap. The product direction and market focus is likely to change (almost always does) as the company grows and the market shakes out, but you need a starting point in which to rally the team and allocate your scarce resources.

Revenue model: product or service? price points? who pays? revenue sharing?

Competition: present and future, substitutes?

Financials and milestones: how much, how big, and how quickly are all questions that investors will ask around your financials. In addition, what milestones will you achieve with the money you want to raise? Now that you have the key points, organize them in a way that logically tells the story. Start with a summary slide. Your audience’s attention is at its highest level at the start, so look for an opening that hooks them in to the story you are about to tell! Avoid clichés and buzzwords.

To help get you started, click here for a sample template.

Good luck!