Making your dream of running a successful hardware startup a reality will require cash. Unless you happen to have a huge stash hidden away somewhere, you’re likely going to be reliant on outside investment – which often means that you’re going to be in the position of presenting your hardware startup to a Venture Capitalist
This can be a scary and daunting process, and it can make you feel incredibly vulnerable taking an idea that you’re passionate about and getting someone else to believe in it. Not only do you risk rejection, but you risk being told by the experts that your idea is nothing but a pipe dream – which is perhaps worst of all.
But don’t let that put you off. If you’re truly excited for your idea and if you really believe in it, then it’s worth taking a shot. And while nothing can guarantee your success, here are some tips that can help you to stack the odds a little more in your favor when you pitch to those VCs…
What VC’s are looking for in your presentation
It is very easy to caught up talking about your crazy product or invention and all the great features that it has. In reality most investors are not really interested in this. They are really looking to have three questions answered, which are
1. Can this startup make money?
2. Is this the team that can execute and make the money?
3. How much money can we make?
Keep these questions in mind while making your slides. Knowing them will produce a more engaging powerpoint presentation for VCs because you will know what they want to hear. Really it comes down to you quantifying the greed and mitigating risk.
Get them hooked right from the beginning
Ever heard of an elevator pitch? You will want to be able to summarize what you do in a neat, succinct manner. The very first slide of your presentation is the place to explain why the should listen to you for the next 20 minutes. This is when you have their attention. Don’t leave them guessing what it is you’re selling – start with the big picture and then narrow in on the details. Otherwise they’ll just feel like you’re wasting their time and you will lose interest very quickly.
Know your numbers!
You really only have 20 minutes to present your company. If you spend all your time talking about features and your market you will never make it to the most important slide which is your financial model slide. This is where most investors will pay attention and this is your time to show you know how the business can make them their money. You need to show that you’ve thought about your manufacturing process and your overheads, and you need to be able to project your profits and have a rough of idea of when you’ll break even. You will want to include a 5 year financial outlook in this slide.
Remember: you’re asking for an investment – not a giveaway. You need to be able to demonstrate how your business is investable. And you need to show that you’re taking it seriously. Anyone can come up with an idea, knowing how to execute that idea is another matter.
Present Yourself Well
And this brings us to the next point: VCs don’t just invest in business ideas, they invest in businesses. And at their core, businesses are made up of people and a great team.
In other words, they’re investing in you and so you need to demonstrate that you have the capabilities of following through on what you promise. This isn’t a popularity contest or a fashion show, but being well dressed, confident, and pleasant to deal with are key points to consider as ultimately they’re going to have to work with you!
Likewise, it also doesn’t hurt to bring along the rest of your team especially if your team is a main reason why VC’s should invest in your startup. If you can show you’re part of a well-balanced team that all get along, this will do wonders for your credibility.
Practice Practice Practice
You will want to practice your pitch just like an actor would practice memorizing their lines. Everything should be easily recalled from memory cause you have rehearsed the pitch numerous times. You should go to meetups where you can demo your product/company and get practice pitching in front of people and receive feedback. Get in front of family and friends. Practice rehearsing in front of the mirror. Record yourself and watch it. You can practice a thousand times in your mind, but if you don’t practice actually performing it out loud then when the day comes to present, it might not work out the way you intended. All in all, having clarity of mind is key when seeing the difference between someone who is prepared and non-prepared.
More important than all of this though is to have passion for your product. If this comes across, it can go a long way to helping you win over your audience. Enthusiasm is contagious, so don’t be afraid to show some excitement.
If you’ve had any experience – positive or negative – in pitching hardware startups to VCs, then we’d love to hear about it. Share your stories in the comments section below! Do subscribe for similar updates and latest hardware news.