So you’ve developed a game-changing product, formed a business with a killer team, quit your job, and are rolling the product out to market. Your business is the next unicorn, and all is good in the world. Fantastic. Now only one thing is inhibiting your company’s growth: you have no money.
For many founders of high-growth startups, bootstrapping has limits. Through self-funding and the family and friends round your startup can establish its place in the market, but significant scaling and growth will often require outside capital. While Gust provides the platform to find and engage with investors, it’s up to you to sell them on your product and vision. The best tool for communicating this? Your pitch deck.
Understanding how to structure a pitch deck and deliver a strong pitch is important to successful fundraising, and founders frequently ask us what investors want to see. Before we break down the contents of a good pitch deck, you should understand the distinction between two types of presentations. Your “info-rich” deck, like the one on your Gust profile, needs to demonstrate your startup’s value solely through the content provided in your slides. Your “in-person” deck, used when you’re making a pitch, should be visually appealing but textually sparse. Investors must be drawn to you, and it’s up to you to deliver. Both decks, however, follow the same general arc:
The initial moments of your pitch are critical to catching and holding investors’ attention—this can often make or break the deal. Begin by introducing yourself and providing an overview of the business: Who are you? What problem does your product solve?
The overview is about establishing context. Gust’s founder and CEO David S. Rose describes it as “a picture on the outside of a jigsaw puzzle.” It lets investors immediately connect your business to familiar sectors, businesses, etc., while also providing a starting point to reference once your pitch gets more detailed.
Some founders deliver the overview in two slides: problem and solution. Regardless of how you do it, show why the problem is worth solving, and why your company is uniquely positioned to do it.
Next, introduce your team. Who are you? What are your experiences? Have you worked together before? How do your talents mesh? Investors need to see that you know what you’re talking about and that your team is capable of executing your business plan.
At the heart of the pitch, you’re really selling you. Investors won’t give thousands of dollars to a company lacking good leadership. They have to believe you’ve assembled the right people to make the idea a reality and get a sense that you’re easy to work with. This slide is simple in form, but it’s necessary to show that you’re qualified for the job.
Detail the market you’re entering. How big is the market? How much of it will you target? Especially important to investors is the total addressable market (TAM). TAM is the amount of dollars spent in a particular market per year, and it shows the potential scale of your operation. As noted by David S. Rose in his book Angel Investing, if the TAM is only $20-30 million, it’s improbable that your service addressable market (SAM)—the segment of the TAM that your product can actually reach—will deliver a worthwhile return on investment (ROI). Investors typically prefer market segments with hundreds of millions, if not billions, in annual revenue. On the other hand, they will also be suspicious of a market so generic that it lacks definition. The market should have narrow parameters, but large potential.
Next, identify your SAM and the target market of consumers most likely to use your product. Within your SAM, how large is your service obtainable market (SOM)? This is the portion of the SAM that you can realistically capture. How does your product fit in the market? Do you have market traction? How much of the market can you realistically retain? At this juncture, it’s important to temper expectation with reality. This is where validators are extremely important. If you fail to support projections with evidence of legitimate traction, investors will lose interest.
Investors need to see what your product looks like and how it works. A live demo is risky, but provide screenshots of the product or do a short canned demo. An effective demo helps to legitimize your financial projections by quickly and clearly differentiating your product from competitors.
Once you’ve demonstrated how your product works to solve your customers’ problem or fulfill their desire, investors also need to understand how it reaches customers and is monetized. What’s your business model? How does it work on a per-unit basis? How do you acquire customers? Investors want to see your sales channels. You can’t expect to smoothly scale your operation—or get funding to do so—without knowing exactly how your company acquires and interacts with individual consumers.
To prove your product’s viability to investors, you must clearly communicate why and how your specific business model is well-positioned to turn a solution to a specific customer desire or problem into revenue. Investors prefer businesses that solve a problem to those that simply improve upon an existing solution. Again, market validation is the best determinant of your product’s efficacy and further potential and, ultimately, is the easiest way to draw the attention of investors.
Even if you’re competing against the “old way” of doing something, you can’t have a unique product without knowing what you’re up against. Claiming that you “don’t have any competitors” is a huge red flag for investors. Describe who or what you’re competing against. How do customers solve the problem today? What differentiates your product from the existing solutions? How does your business fit within the marketplace? Be realistic about your product’s advantages over competitors. For an example of how to represent this visually, check out this reproduction of AirBnB’s original pitch deck.
Investors will be skeptical of a product that’s easily replicated. Explain what prevents a competitor from launching tomorrow and eating into your market share. Does your company hold intellectual property rights? Be sure to describe any proprietary technologies and how they give your company a competitive edge.
Investors need to understand how your business works. What’s your burn rate? What’s your company’s track record? What’s your customer acquisition cost? Detail your company’s expenses and revenues and how they will scale.
Early-stage investors are particularly interested in short-term revenue projections. What revenue do you expect to realize in the next 3-5 years? The average holding period of an angel investment is nine years. In that window, angels subsidize failed investments with the few that bring large returns (ideally around 25-30%). Therefore, your projections must show them realistic returns within a five-year window. Investors realize your projections won’t be 100% accurate. That’s not the point. They want to see how your company will grow and that you’ve put in time and due diligence planning for it.
Drumroll please… This is the pivotal moment of your pitch where you tell investors how much capital you’re seeking and at what valuation. They’ll want to know your capital structure, who’s already invested in your company, and if you’ll be seeking further rounds of funding in the future. In the eyes of investors, your valuation is the product of a risk/reward analysis. If your company shows more risk, its valuation will be lower (and vice versa). The objective of your pitch up until this point? Temper the presumed risk of this investment.
Think of the life of your business as a stepwise trajectory. What’s the next step for your company? Specifically, what are your financial and sales goals, and what constitutes success? Break down your long-term vision for your company with defined, measurable milestones. Then, describe to investors what their money will be used for and how it will help you reach the next milestone. They will then decide whether the percent stake you are offering is “worth it” to them after an exit.
The final slide summarizes the important points of your pitch. You need to drive home why your business (and you) are worth the investment. Be sure to include a CTA (call to action) with your contact information. During your “in-person” pitch this should be the climax, not a boring recap. This is how they’ll remember you.
When making your pitch deck, be sure to continually think about these three question:
- Why is this problem worth solving?
- Why are you and your team the right people to solve it?
- What prior validation do you have to prove that your business can grow and scale?
Remember: the content of the deck is really only half of the equation. You’re selling yourself just as much as the product. Having the confidence and charisma to own your pitch and impress investors is the most important—and challenging—part of the pitch. After all, this isn’t a simple transaction; it’s the first step in a relationship.
For more on how to make a great pitch to investors, check out David S. Rose’s TED Talk, “How to pitch to a VC.”
Is coronavirus a prelude to war? New video surfaces of China’s nuclear-capable H-6 bomber carrying a large hypersonic missile
Is coronavirus a prelude to war? With this question, we’re not suggesting that coronavirus was engineered in a lab as a bioweapon or being used as a bioweapon. The point is more about the lack of preparedness and the fact that […]
Is coronavirus a prelude to war? With this question, we’re not suggesting that coronavirus was engineered in a lab as a bioweapon or being used as a bioweapon. The point is more about the lack of preparedness and the fact that everyone was caught off guard. Not many people saw it coming.
Now, something bigger may be on the horizon–China’s war with Taiwan. As Professor Li FEI of Taiwan Research Institute of Xiamen University (China) pointed out, “China’s war with Taiwan is much more likely than a military confrontation with the United States. As the rest of the world battle with coronavirus, China continues to arm for war, becoming ever more dangerous.”
Back in September, we wrote about China after the Chinese Air Force released a two minute and 15-second video showing its H-6 bombers carrying out a simulated attack on what appears to be Andersen Air Force Base on the U.S. Pacific island of Guam. The video, which was released on Saturday on the People’s Liberation Army Air Force Weibo account, came as China carried out the second day of drills near Chinese-claimed Taiwan, to express anger at the visit of a senior U.S. State Department official to Taipei. The video is called “The god of war H-6K goes on the attack!”
Now, a little over a month later, a new video circulating on social networks shows a Chinese H-6N bomber with a weapon system. Since the new type of X-6 bomber debuted only last year, military insiders said the new weapon system is a new hypersonic cruise missile. As China stepped up its war preparations with Taiwan, the Chinese Air Force is deploying hypersonic missiles at several military bases across from Taiwan. This new type of missile gives the Chinese Airforce a significant advantage over Taiwan’s anti-ballistic missile shield due to the glide vehicle’s unpredictable ballistic trajectory.
A Chinese civilian recorded the bomber as it was landing at Neixiang Ma’ao air base in central China. In the video, the H-6N bomber is seen carrying a large missile with the telltale nose shape of a weapon that can travel faster than Mach 5. The missile itself appears to have a sharp, wedge-like nose similar to those seen on a new Chinese hypersonic weapon system. The weapon may even be nuclear-armed, making the blazing-fast projectile particularly deadly.
— OedoSoldier (@OedoSoldier) October 17, 2020
In another social media video, China military aviation researcher Rupprecht Deino wrote:
“For the first time a H-6N was seen landing with an air-launched Anti-ship ballistic missile (ALBM/AShBM). This missile so far labelled as CH-AS-X-13 is often referred to the DF-21D but here it looks almost to feature an DF-17 like hypersonic glide vehicle (HGV) on top the rocket”
For the first time a H-6N was seen landing with an air-launched Anti-ship ballistic missile (ALBM/AShBM). This missile so far labelled as CH-AS-X-13 is often referred to the DF-21D but here it looks almost to feature an DF-17 like hypersonic glide vehicle (HGV) on top the rocket pic.twitter.com/yOugsjkkhx
— @Rupprecht_A (@RupprechtDeino) October 17, 2020
In 2018, Chinese researchers successfully tested its first hypersonic missile named XingKong-2 hypersonic aircraft. XingKong-2 or Starry Sky-2 is an experimental waverider hypersonic flight vehicle that gains its lifting power via the shock wave created by its own flight. According to the China Academy of Aerospace Aerodynamics, Xingkong-2 reached an altitude of 30 kilometers and a speed of Mach 5.5-6. The Xingkong-2 is still in the trial phase and more tests are expected.
China-based EdTech startup Yuanfudao raises US$2.2 billion in funding for its online education platform; making it the world’s most valuable EdTech company
Yuanfudao, China’s leading online education platform announced it has secured $2.2 billion Series G1 and G2 funding to further boost its educational technology innovation, accelerate new curriculum product development and expand its online education service system. The G1 financing round was […]
The post China-based EdTech startup Yuanfudao raises US$2.2 billion in funding for its online education platform; making it the world’s most valuable EdTech company appeared first on Tech News | Startups News.
Yuanfudao, China’s leading online education platform announced it has secured $2.2 billion Series G1 and G2 funding to further boost its educational technology innovation, accelerate new curriculum product development and expand its online education service system.
The G1 financing round was led by Tencent, with participation from Hillhouse Capital, Boyu Capital, and IDG Capital. The G2 financing round was led by DST Global, with participation from CITICPE, GIC, Temasek, TBP, DCP, Ocean Link, Greenwoods, and Danhe Capital. The new funding brings the Yuanfudao’s valuation to $15.5 billion, making it the most valuable technology-driven education unicorns in the world.
Founded in 2012 Shuai Ke, Xin Li, and Yong Li, Yuanfudao is China’s leading online education platform that currently provides K-12 after-school tutoring, pre-school enlightenment, and adult education services to over 400 million users across China. Yuanfudao offers a comprehensive curriculum spanning from primary school English, Mathematical Olympiad to all-subject courses in secondary school. Its unique online feature and a large pool of quality teachers enable students to access live online tutoring at home taught by national renowned teachers, benefiting hundreds of thousands of students across the country.
Yuanfudao is the leading brand for China’s primary and secondary school online courses, while Zebra AI Class is the largest online course platform for preschool education in China. As of today, these two major online course platforms currently approximately 3.7 million students using their regular-priced courses, making Yuanfudao the largest online education company in China by the number of students.
Headquartered in Beijing, Yuanfudao has established a number of teaching & research centers and branches across China, including in Wuhan, Xi’an, Zhengzhou, Nanjing, Chengdu, Jinan, Changsha, Tianjin, Chongqing, Shenyang, Changchun, and Hefei with more than 30,000 employees. In March 2020, Yuanfudao announced that it would create 10,000 jobs across China and 5,000 jobs in Wuhan to support COVID-19 recovery efforts, as a part of the Company’s commitment to corporate social responsibility.
Hummer EV, GM’s first all-electric truck and rival to Tesla’s Cybertruck, sold out in the first 10 minutes of opening the pre-orders
Yesterday, General Motors unveiled its first all-electric Hummer, the GM Hummer EV. The Hummer EV line was launched in October 2020 through a live stream. The off-road luxury electric truck is a response to Tesla’s Cybertruck. The Hummer EV includes a pickup truck […]
Yesterday, General Motors unveiled its first all-electric Hummer, the GM Hummer EV. The Hummer EV line was launched in October 2020 through a live stream. The off-road luxury electric truck is a response to Tesla’s Cybertruck. The Hummer EV includes a pickup truck (SUT) and a Sport Utility Vehicle (SUV) that will be introduced in 2021.
Less than 24 hours after the launch, General Motors said it has sold out the first year’s worth of its hulking GMC Hummer EV electric pickup truck after a splashy video reveals on Tuesday, according to a confirmed report from Reuters. The GMC website showed a “reservations full” banner over the Hummer EV “Edition 1,” due to start production in the fall of 2021. The next version of the truck, the $99,995 Hummer EV 3X, is not scheduled to begin production until the fall of 2022.
The Hummer EV “Edition 1” is the sole model available for the first year and considered to be a limited edition that was available for pre-order by the end of the launch event on October 20, 2020. All Edition 1 are white with a black roof with bronze-colored wheels and a two-tone black and gray interior with bronze accents and Edition 1 badges.
Edition 1 has three electric motors with 1000 horsepower and comes fully loaded with the Extreme Off-Road package, which includes 35-inch mud-terrain tires, skid plates, and rock sliders. The Hummer EV Edition 1 broke records as it had sold out in the first 10 minutes of opening the pre-orders.
The least expensive Hummer EV, starting at $79,995, is scheduled to go into production in the spring of 2024, GM said. The Hummer EV was designed and engineered in 18 months, GM officials said during a presentation on Wednesday. The brawny truck can “crab walk” sideways on rough terrain using its four-wheel steering system, and has a “Watts to Freedom” mode that accelerates the truck to 60 miles per hour (97 kph) in 3 seconds.
The Hummer EV is very different from the Tesla Cybertruck but equally eye-grabbing design and a bevy of extreme performance features. The Cybertruck’s starting price is $39,900, though a model with 500 miles of range starts at $69,900. Tesla has begun building a factory in Austin, Texas to build the Cybertruck starting in late 2021.
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