ENTREPRENEUR
my money, frittered away before the business earns a dime in revenue”. Think about it… if you’re spreading your resources over a B2C app, B2B portal, data warehouse… and your competitors are focussing all their firepower on just creating a great consumer app, who’s going to win? Plus, you’ll need to hire more people, so you’ll run out of money faster. So, unless you have 50 developers, focus on one thing, and do it well. Stay focussed and aim to get revenue before you go wide. Don’t over-value the company One of the most difficult problems every founder will need to figure out is how to value the company. Get it too low and you’ll give away too much equity and dilute yourself excessively. Get it too high and investors won’t bite. But, what many founders don’t realise is that get it too high, and your next round may have to be a down round, which makes everyone unhappy. That’s a particular problem for companies doing crowdfunding, where a bubbly pitch deck may entice small investors to invest at a high valuation, but when it comes to the next round, VCs may not buy into that stellar valuation. This SeedLegals article shows benchmark valuations for UK companies. Avoid buzzwords and distractions It’s all too easy to sprinkle your deck with buzzwords. CAC.LTV. ARPU. GMV. You might know what it means, but don’t assume your investor does. Your investor may not engage in conversation about your business for fear of being embarrassed that they don’t know those terms. Or, if they’re industry-specific terms (e.g. medical buzzwords) you’re sending a message to investors who don’t specialise in just that segment that this isn’t for them. Also, investors are going to be looking at every single word, every image, trying to extract meaning. That graphic of a man climbing a rock face, you thought it was a cool way to show you’re up for a challenge, but racing through
your investor’s mind is “Why a man, not a woman? / OMG, no ropes, they could fall / Hey, is that Chamonix? I need to book for next year”. So treat every word and image as either adding value, or being a distraction that could lose the attention of the investor. Remember the ask! If your slide deck doesn’t end by saying what you’re looking for, your investor will be left thinking, “nice, but why are they showing me this?”. So make sure your deck ends with an ask, “Raising £300K, offering SEIS and EIS” and of course your contact details and web URL. You’d be surprised at how many decks miss that. Know when it’s time to stop I’ve seen pitches which had me at slide 12, then lost me at slide 30. A pitch deck should tell a story, and like a story it has a beginning (the problem you’re solving, what it is), a middle (market size, competition, unique advantages) and an end (revenue projections, traction so far, team, the ask). And, then, job done, stop there. Get the slides in the wrong order and you’ll miss building the desire and holding the attention of the investor. By Anthony Rose, CEO and founder of SeedLegals .