The slides from a class at General Assembly on the do's and don'ts of pitching for seed stage fundraising.

1. To all who attended Mon night at GA: Thanks! Hope you enjoyed it and gained something.
Feedback welcome. Know any great start-up or founders? I would love to hear about it.
If you send me an email, I will put you on my list for occasional updates. Follow me on LinkedIn
and/or Twitter for updates, etc. (Page 16 of this deck has my details) .Cheers, -TW
The Seed Stage Pitch:
Mastering the Art and the Science
Insights on successful pitching from an active angel investor
and fellow entrepreneur
General Assembly Seminar
Tom Wisniewski
RosePaul Investments
Monday, April 15th, 2013

2. Agenda
I. Kick-off and Introduction
II. Pitching to Prospective Investors
III. Additional Q&A, Feedback and Beverages
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3. I. Kick-Off and Introduction
Seminar Rationale: Why are we hear?
What’s the Problem?
The odds are against you as an entrepreneur pitching investors: the "1 in 100 get
funded” ratio is a reality. Raising seed-stage money is tough.
Poor communication is perhaps the most important driver of the dreaded investor
"pass", the "ding", the un-returned email.
Having experienced (and delivered!) a lot of *bad* pitches, I have become a
"student" of the pitch and of effective communication generally.
Entrepreneurs make a lot of avoidable mistakes and miss opportunities.
Pitching is more than a good 10-page PowerPoint.
There is *no* shortage of advice on how to pitch, but it is often conflicting and
overwhelming. (WTF????)
What would help?
Understand the basics.
Review some examples the good and the bad.
Understand the rationale, the "why”
Study. Practice. Pitch. Repeat.
Everyone can improve their pitch. Channel some energy and become a "student" of
the pitching
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4. What would I like you to walk away with?
Better understanding of pitching.
A set of specific insights that will *change* your pitch.
A “to-do” list: starting point(s), actions, things to try.
A set of recommended resources to consult and learn more
from.
A few new relationships with others in the NYC start-
up/fundraising ecosystem: fellow entrepreneurs, investors, etc.
Answers to specific questions about pitching that you might
have.
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5. Tom Wisniewski: My background
Born in NYC; grew-up in Montclair, NJ
Physics and Philosophy major undergrad
(Clark University); MBA at Tuck School
(Dartmouth)
1st Job: Programmer at Morgan Stanley then
moved to Investment Banking
After B-school: joined a start-up management consulting firm Mitchell Madison
Group; focus on Strategy/Operations/IT for financial services, tech, outsourcing,
private equity/VC clients (1993 to 2000)
Walker Digital: helped set-up and run an early “internet incubator” (2000)
Independent Advisor / Turn-arounds: Advised VC and PE Firms on portfolio
company strategy and new investments; joined the management team of two
companies
Currently:
• Early stage investor and advisor to start-ups
• Investor and advisor to VC and PE funds
• Member and director at New York Angels
Recent Investments: LiveLook (Saas, live collaboration, co-browsing); Movio
(Digital “RedBox” ); Bizodo (Saas, paperwork automation); Wanderu (“Kayak” for
Ground Transportation), Social Starts (seed fund for start-ups); Brooklyn Bridge
Ventures (Charlie O’Donnell); Entrepreneurs Roundtable Accelerator (ERA)
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6. So .what questions do you have about Pitching?
Jen How detailed financials ?
Olga: How to pitch before reves and product
Ranjan: How much focus on team vs. ???
George: What’s more effective call or email?
Alex: How should a deck be?
Maury: How not to get screwed?
Deekron: Exit scenarios?
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7. II. Pitching to Prospective Investors
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8. Communication is Critical Why?
“Finding Diamonds in the Rough” problem. There is no shortage of supply:
lots and lots of ideas, pitches, people, etc.
• The problem for investors is finding the “diamonds”.
The “first minute” problem. If you loose someone’s interest in the “first
minute”, you usually loose them.
• “First minute” = “first minute” sometimes first 30 seconds!
• “First minute” = a conversation, a meeting, anything
• I need to quickly figure out whether I should “spend” more time/effort with you,
or move on to something else.
The “0 to 60” problem. Potential investors (or potential employees, customers,
etc.) usually start out knowing nothing about you or your venture.
• Getting someone “from 0 to 60 mph” is very challenging: too much to say,
don’t know where to start.
A Pitch is a “Sale”. You not just trying to “describe”, you are “selling”. Easy to
tell people what you are doing; harder to get them to ‘buy”.
• You are selling your “product” to prospective “customers”. Product = your
company and the opportunity it presents.
• You are interviewing for a new job. Product = you and your team.
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9. Principles of Communication: A Starting Point
To start, lets use a simple framework: Audience, Messages, Storyline, Goals, Situation.
Audience. Who is the audience? Who are you selling to? If you don’t
understand someone's “perspective” you will be ineffective
• For example: “they have 6 Saas investments vs. they can’t spell Saas”
• People generally understand things by association (to things *they* know).
Messages. What points you are making? What is the single key thought you are
trying to impart with each page?
• “the market is huge and growing” is a message; a chart, some stats, some
explanation is what makes up the page
Storyline. What is the narrative story you are building with the collection of
messages? Does the story flow well and get to your conclusions?
Goals. What is the goal of this specific meeting?
• Unlikely it is getting a “check”. Getting to the next step in the process.
Situation. What the format of the pitch? What are the constraints?
• 2 minute elevator pitch vs. 10 minute Power Point pitch vs. email attachment
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10. The Communication Pyramid
Level of Detail in
Level of Detail in a Different
Document Documents
The Executive 1 page summary
Summary
First Page of Each 10 –page deck
“Chapter”
Each Chapter 20 –page deck
Each Chapter with 20 page deck, +++
all the Back-up
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11. “Good” Pitch Deck
From “Triple Play” of VC Presentations by Adapted from “10 Slides to an Awesome
Mark Suster (former entrepreneur, now VC) Pitch” by Dave McClure, 500 Start-Ups
Slide 1 – Team Bio 1. Elevator Pitch
Slide 2 – 50k foot view of your company 2. The Problem
Slide 3 – Problem Definition 3. Your Solution (Demo Here!)
Slide 4 – How do you solve the problem? 4. Market Size
Demo Web Version and 5. Business Model ($)
a Demo Video Example 6. Proprietary Tech
Slide 5 – Market Sizing 7. Competition
Slide 5 warning: (Market Sizing Pitfalls) 8. Marketing Plan
Slide 6 – Competition 9. Team / Hires
Slide 7 – Customer Adoption / Traction 10. Money / Milestones
Slide 8 – Team
Slide 9 – Financial projections
Slide 10 – Use of Proceeds
Slide 11 – Fund raising process / Next steps
Appendix – Back-up slides
How to deal with the dreaded question of
valuation?
http://www.bothsidesofthetable.com/pitching-a-vc/ http://www.slideshare.net/dmc500h
ats/how-to-pitch-a-vc-sept-2010
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12. Examples of “Good” Pitches
http://bitly.com/bundles/royrod/2
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13. Common “Forms” of Pitch Communication. What are they? Which should I use?
“Document” Simplistic Description Common Situation/ Use
1-pager “1 pager Exec Summary, Word • Email attachment or handout
doc” • Online platforms e.g. Gust, AngelList
Email Brief “Teaser paragraph of text / bullets” • “In the intro email” (w/ attachments)
Business Plan “10-40 page Word doc” • Detailed discussions (similar use)
• Stand-alone, due diligence
Pitch Deck “10 page PowerPoint • “15 minute stand-up presentation”
presentation” • Email attachement
Long-Form Pitch “20-40 page version of 10 pager; • “60-90 minute follow-up meeting with
Deck PowerPoint presentation” smaller group”
Elevator Pitch “No document, just you talking for • Your quick intro after you meet
60 seconds” someone in person
“Video” Pitch “10 minute video of your deck/ • Email attachment
demo w/ you voice” • Online platforms e.g. Gust, AngelList
Due Diligence Docs “All the detailed spreadsheets, • For detailed discussions with
data, etc. that back-up your pitch” interested investors, usually post-
e.g. Financial Projections, Sales term-sheet
Funnel, Legal Docs • Online platforms e.g. Gust, AngelList
The Good News:
• you don’t need to have all of them (maybe ever, certainly 1 or 2 to start is fine)
• much of the content, messages, storylines can be shared and reused
September 2011 Preparing thoughtful docs
• refines your thinking and your venture. 12
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14. Key Success Factors and Take-Away’s
Find Fit. Does this investor have “fit”? Do they invest in ventures like
mine?
......if not, then move on. (or at least prioritize accordingly)
Prepare! Don’t be lazy; invest some time.
• Steve Jobs: 30 hours to develop, 30 hours of practice 30 minutes of
presentation.
• For example : “Audience”. What have they invested in? Recently?
What can you find out about their background? Interests? Hot
buttons?
- How? Duh .Google: Blogs, Quora, YouTube, CrunchBase; talk
to people they know, better talk to those they have invested in.
Pitch, Get Feedback, Revise. Repeat. No venture idea was built in
a vacuum. The ONLY way to develop business ideas is to share them,
solicit feedback, make adjustments, develop/refine/add and ..DO IT
AGAIN!
• 1 part “studying” pitching, 1 part “doing” pitching, 10 parts repeating
both this is becoming a “student”
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15. What would I like you to walk away with?
Better understanding of pitching.
A set of specific insights that will *change* your pitch.
A “to-do” list: starting point(s), actions, things to try.
A set of recommended resources to consult and learn more
from.
A few new relationships with others in the NYC start-
up/fundraising ecosystem: fellow entrepreneurs, investors, etc.
Answers to specific questions about pitching that you might
have.
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16. III. Additional Q&A, Feedback and Beverages
Feedback on this class:
What did you like most about this seminar?
What could be added and improved to make it better?
What other topics would you like to see a seminar conducted on ?
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17. Thanks!
Thomas Wisniewski
Contact Info
Email: twisniewski@newyorkangels.com
LinkedIn: http://www.linkedin.com/in/thomaswis
Twitter: @thomaswis
This presentation: http://www.slideshare.net/Thomaswis/
New York Angels www.newyorkangels.com
New York Angels Educational Meetup: http://www.meetup.com/NY-Angels/
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18. Additional Slides
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19. II. Pitching to Prospective Investors
Sources of Investment: Seed Fundraising, Angels and VC’s
Earlier Stage “Seed” Later Stage
“You” Friends and
aka Bootstrapped Angel Investment Venture Capital
Family
“Seed” VC “Traditional Series A” VC
Round Size $: • $10’s of K • $100’s of K • $500K to • $5M-$15M
to $100K to $1M+ $1.5M
Investment Size $: $5K – $10’s of K • $25K – $75K • $250K-$750K • $3M – $5M
Valuation (Pre- • < $1 M • $1 – 5 M • $5-10 M • $10 – 25 M
Mon):
Stage (Pre-Round): • An idea, initial/rough • Detailed b-plan, • Significant variation among firms
• Expected to b-plan • Key founders (bus & tech) full-time but . Angel req. +:
have: • Initial founders, key • Prototype/alpha done and tested, - Anchor clients on board, revenue
advisors • Some piloting (paying?) growth (B2B),
• Path to ??? customers, some revenues?, - Growing base of users, with strong
• All legal documentation in place, usage trends (B2C)
board of directors - ..Growth potential! Credible
• Path to break-even or next funding path to $100M Rev
• Don’t Expect: • $ Rev, Customers, • Income (e.g. cash flow positive); • Income (e.g. cash flow positive)
Minimum Viable all key management ; completely
Product (MVP); full developed business model (e.g.
legal documentation understand it will change)
Who/what are • People you already • Experienced early stage • Firm with multiple professionals that
they? know, that trust investors (individuals or a group) raises, invests and manages
you, and (maybe) • Accredited Investors. individual funds (other people’s $)
understand your • Angel investing is not their “job”; • Working F/T (this is their job )
venture may not be F/T endeavor • E.g.: Greycroft, RRE, Union Square
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• E.g.: NY Angels, GoldenSeeds
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20. Given this landscape, how do I get to the pitch?
Who are the “right” investors? Where is there a “fit”?
• Reality Check. “people invest in things that they understand and have experience with”
- Target find Fit: Find investors that come from industries, sectors, business models
etc. that are same/similar to your venture and your customers
How to “get” a pitch meeting?
• Connect. The hard part.
- Avoid “cold-calls”; look for “warm introductions”
- Networking. Who do you know that knows them?
- Find them at an event. (Email sucks!)
Really you should be thinking How do I build a relationship first?
• Pitching by its very nature can be awkward. “This guy wants something from me.”
• Most investors mean-well, and would like to help but are busy
Solution: Build a relationship before you need to pitch. OK, How?
• Give, don’t Ask: what can you do for them?
• “Ask for advice, not money”
• Debate / Discuss a topic, Ask opinion about X.
• Find ways to “show” rather than “tell”:
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21. Who are these “Angels”? What do they look like?
Experienced, successful entrepreneurs: frequently multiple exits
• Some from “tech-start-ups” some from other businesses
• Usually some link to
Successful “corporate” business people: CEO or CxO-types
Older: most are in the 40-60 age group. But there are also notable angels
in their 20’s and 30’s e.g. newly minted start-up millionaires
3 – 10+ Angel Investments
~10% of investible capital in Angel Investments
Differ *widely* in: Industry/Functional Experience, Investment Expience,
Interests, Target Sectors/Stage, Investment $, Risk Tolerance, personal
do’s/don’ts and hot buttons.
Lists? Not many. All are partial. AngelList? Gust? Other?
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22. NY Angels Profile
www.newyorkangels.com
Member Profile: ~80 investor/members; several early-stage funds; Member
backgrounds are generally representative of the tech / entrepreneurs / industries in NYC:
software, e-commerce, ad-tech, finance, media
Sector Focus: Internet, e-commerce, new-media, software; B2C and B2B. Mostly NYC
Area.
Stage. Mostly early stage (with some customers/revs), some seed stage (pre-revenue)
Valuations/ Investment Size: NYA pre-money valuations tend to range from $1M – 4M;
investments tend to range from $250K to $1M+;
• For larger rounds, NYA often leads the deal and helps find the rest of the capital by
sharing/syndicating the deal with other Angel Groups
Group Structure / Investment Decisions. NYA core structure is as a group of individual
investors. Individual investors “opt in” to deals and make their own investment decisions.
• Typical member invests $25-50K in a deal.
• In addition to the core “opt-in” model, NYA has just closed a small seed fund that will
operate in parallel (using a “democratic model” for investment decisions)
History/Background. NYA has invested $45M+ in 70+ companies.
• We are very active in the NYC entrepreneurial / early-stage ecosystem
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23. Variations on the Theme: Other Players
“Super Angel” (vs. Angels, Angel Groups). Sophisticated angel investor with a large portfolio
of early stage investments (30? 50?) and that is investing frequently (10 + per year). E.g. David
Rose, Fabrice Grinda
Microfund or Micro VC Fund. Small VC fund ($1-10 M) often run by a single person typically
making “angel” size investments in early stage companies.
Seed Fund. VC fund focused on “seed” (aka Angel) stage investments: often pre-revenue,
pre-product. Some VC’s that typically invest in “Series A” rounds will reserve a portion of their
fund for seed investments: e.g. $250 – 750K investments at $1-5 Million valuations
Incubator/Accelerator. Entity that provides non-monetary support/services (in addition to $’s)
to early stage ventures. Typical support/services can include: space, IT infrastructure, shared
admin service, advice/feedback, introductions/networking. Public vs. private, independent vs.
captive. Examples: TechStars, ER Accelerator, DreamIT, Y-Combinator
Strategic Partner/Investor. Some operating companies will invest in ventures. Typically it is
in an industry/ sector / product-space similar to theirs (sometime with an eye toward potential
acquisition in the future)
Crowd Funding Platforms. Currently this is financing via donation or “pre-sale” of products.
Equity financing under JOBS Act is TBD. Not obvious this will be a good match for most Tech
AngelList. Similar to an angel group, but without centralized control. More of a open
“marketplace” of individual investors and ventures to facilitate funding.
Gust. Software platform that most angel groups utilize (and many small VC’s) to run their
investment process and connect angel groups together to share deals.
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24. Additional Thoughts ..
Lots of start-up advice out there. Lots about the art of fundraising.
• Huge volume of blogs, articles, Quora-posts, etc.
• Well .that’s good, right? Yes.
• But why doesn’t it help?
- Overwhelming
- Conflicting
- Not specific
- Not enough context
- It’s just advice, ideas, ..not interactive, not experience.
• Need to understand the “why” behind it all and adapt it to your venture, your situation.
Beware of simple answers, absolutes. As you are reading and listening to all these
opinions, data sources
• For any “fact” “rule” “truth” if you don’t understand how it is both true/false, you don’t
really understand the point.
- Under what circumstances is this “rule for fundraising” “true”? Where does it apply
well With whom?
- How and when is it not true (Or less true)?
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