At our mentor capital consultancy, one of the most frequent needs our clients bring forward is the need to achieve funding. While we can direct them to a variety of sources, founders can still be stymied by the process of writing a strong investor presentation or pitch.
We listen and review a myriad of pitches from our clients and prospective clients on a weekly basis. There are certain skills that will help any investor presentation get further ahead. From the financial side, however, here are two brief suggestions about what to include:
1. Basic financial questions. Beyond the hockey stick projections, what is your basic financial strategy in terms of revenue and margins? What is your path to profitability? When will you be cash flow positive? Why does your revenue increase year-over-year? How predictable is the revenue, how much visibility do you have into the sales funnel? What does your linearity look like? Most important, you need to show that you have exceeded the historical financial projections.
2. Funds needed and use of proceeds. State how much you are seeking and what you will do with the money. Discuss future rounds of capital needed and what the investor’s exit strategy will most likely be. It is also helpful for investors to understand that the management team is invested and that the proceeds are going to be used for future activities rather than to repay old debt or employees.
There are many aspects to writing an effective financial strategy pitch—but covering these basic financial questions well will put you on a much stronger path to success.
Steve Erickson
Partner
Sage Creek Partners
Alpine, Utah
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