10 Slides to Funding Success
The Problem Slide
Part 2 of 10
Startup Capital: 10 Slides to Funding Success – The Problem Slide
One of my responsibilities as an Executive Coach is helping company founders with the creation of their Investor Pitch Deck. Throughout my career, I have created and helped create many Investor Pitch Decks. Some of our team’s Investor Pitch decks, especially early in my startup career, upon reflection, were “horrible”. Sometimes our teams were successful in raising monies from investors. Many times they were not. I never thought that the content and presentation style of the investor pitch deck might be hurting us. Boy, was I ever wrong! By working with many investors, I’ve learned what they want in an Investor Pitch Deck. In my last company, we raised $87M over rounds A, B and C. Today I will discuss “Startup Capital: 10 Slides to Funding Success – The Problem Slide – Part 2 of 10”.
When an Entrepreneur is putting together their Investor Pitch Deck, they usually assemble a hoard of information. Sadly, often what they assemble is a “book” that is 20, 30, even as much as 80 pages in length! Most of us humans have a very short attention span. Even ad networks know that most ads longer than 30 seconds in length don’t work with consumers. For Investors, the successful length of an Investor Pitch Deck is about ten pages and 7-15 minutes in presentation length.
This 10-part series covers the ideal content, order, and verbiage of the ten Investor Pitch Deck pages. You’ll have learned how to craft your story into a successful ten-page Investor Pitch Deck that can get you funded!
The Problem Slide – Why Is It Important?
Last week in Part 1 of “Startup Capital: 10 Slides to Funding Success“, I spoke about the Cover slide and its importance. This week I’m speaking to the Problem Slide, the second page of every presentation and its importance. After your introductory Cover Slide question and related verbiage, you should immediately launch into describing the “Big, Hairy Problem”.
Why? First, this is where you are confirming your reason for being in front of your audience after your opening introduction. Second, I said “Big, Hairy Problem” because no investor wants to hear about a problem that is small. Small problems don’t merit lots of customers or revenues, so an investor is unlikely to see a big payday.
Nearly every investor wants to invest in billion USD and larger market sizes. An investor’s big payday only happens if the company can find a buyer. A buyer who pays 5x to 50x what your investor paid to buy your stock. Small market products and services typically won’t give a return in that range, leading to greater difficulty in finding investors.
The Problem Slide – Content
Most Problem Slides I see from entrepreneurs are all over the map in terms of content, format and even non-existent. I’ve sat in pitches where founders went 10+ slides and I still had no idea what problem they were solving! Please don’t let this be you!
Your Problem Slide should convey to your audience a strong idea on what you are going to be talking about. Let’s say your product is a large item delivery service for consumers and businesses. You might create a slide background image of an unhappy consumer with a questioning look on their face. They would be looking at a large newly purchased item. Their facial expression is saying “How the heck to I get this home?”. Show three cloud-themed “thought” shapes above the consumers head. One with a grizzled looking delivery driver in one. Another with their small vehicle with the large item strapped to it. A third of a calendar showing a six-week delivery marked on it. With no text at all, your audience has a strong image to the “Big Problem” your company is tackling.
The text you should be a few words, or bullets, supporting the image and stating the Big Problem (NO SENTENCES!). That’s it! Remember, you’re only trying to be clear on what “Big Problem” your team is bringing a solution to. There’s a temptation to give a “tease” as to your “Solution” as part of your storyline – DON’T! The Solution you will speak to in some detail in the fourth slide which I’ll cover in a later writing. See the image associated with this article to see a great Problem slide example.
The Problem Slide – What’s Your Story?
So, what do you say while your Problem Slide is visible? In pitching to investors, I advise presenters to always start their talk with a question. Starting with a question does several things. By nature, most people in an audience will stop talking when a question is asked. Audience members also engage a different part of our brain than when they were chatting with others. Your audience is now focussed on YOU and what you are saying. This is what you want them to now to be doing!
The question itself, along with the wording and delivery, is key. Ideally, the question needs to be one that your audience can draw a personal experience towards. The question and its answer should directly tie to the “Big Problem”. Allow me to give one example.
“How many of you have been shopping and bought some large item like a TV or couch? Now you’re faced with “how do I get this thing home?”, right? The store salesperson says “We can deliver in 6-8 weeks. We’ll need you to be home in a 4 to 8-hour window to accept delivery”. Ugh, no thanks! Your second thought is to try to tie it to the top of your vehicle. OUCH! Your third thought is to hire that scruffy looking guy down the street that has a pickup truck. YIKES!”
I hope this illustrates that starting things with a great question that your audience relates to is key. Virtually every audience member can remember a personal experience where such a service would have made their life better! Create a similar “Problem” story to describe the problem your company is solving that your audience can relate to.
Presentation: We Can Read or Listen – Not Both!
Most of us humans can either “Read” or “Listen”, but cannot do both at the same time. Your Pitch Deck slide presentation exists to support “the story” you are going to be telling your audience. Does your Investor Pitch Deck has a lot of words, charts with numbers, or distracting images? Then your audience is going to switch their brain into “reading mode” and out of “listening mode”. As soon as that happens, you’ve lost your audience and will struggle to get them back to listening to YOU! To avoid this, use mostly images and as few words as possible, usually in bullet form. So absolutely, positively NO SENTENCES!
So, I suspect many of you were surprised with respect to the importance of the Problem Slide. If you’re starting you create your first investor presentation, congratulations! You’re going to be starting off on the right foot if you follow my recommendations above. Go back and look at your Problem slide and apply what you’ve learned above. If possible, you should wait to read the remainder of the series before you present again. I can almost promise you a better reaction from your audience.
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If you subscribe to my FREE Business Coaching Newsletter, I’ll also offer you a discount coupon to my book “Startup Capital: 10 Slides to Funding Success”. In the book, I do a more detailed dive into each of the ten slides. You’ll see both good and poor examples of each of the ten topic slides. I’ll also discuss good and poor examples of presentation techniques. You’ll learn how to identify “Lookie-Lou” investors from “serious investors” who will really write you a check. I’ll teach techniques for how to overcome nervousness, stuttering and “brain-freeze” during your presentation. You’ll learn appropriate attire and why showing up even a minute late can doom a presentation.
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Next time …
In the next blog post, I will write about “Startup Capital: 10 Slides to Funding Success! The Market Slide – Part 3 of 10”.
Read a Previous Post: “Startup Capital: 10 Slides to Funding Success! The Cover Slide – Part 1 of 10“
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