Sep 17, 2021
3 Key Things to Watch Out For in Your Term Sheet
During fundraising, various term sheets may be offered from different investors.
Investor pitches for capital raising are one of the most challenging times for any entrepreneur. Delivering an impactful presentation requires substantial preparation, building a rapport, and connecting on a personal level with the investor to build trust. With the recent paradigm shift to zoom calls and virtual pitches, founders have to adapt to an additional challenge - Building trust and persuasion via a webcam and a video call!
While the transition to the remote presentation may seem like a disadvantage, Qapita has compiled a short note to equip you with a checklist ahead of your virtual pitch. There are elements of a virtual presentation (if played right) that give your pitch delivery an edge. After all, the entrepreneurial spirit – which charms VCs and investors – manifests best in founders that adapt to ever-changing circumstances and use it to their advantage.
Crisp and Concise
In retrospect to normal days, classic sales pitch follows a predictable template which resembles the following:
Intro to the idea → Intro to the team → Our Product → The market opportunity → Our GTM plan … etc.
An hour-long pitch may work in an in-person presentation format. Unfortunately, it is difficult to sustain that level of engagement especially when it is difficult to assess body language and switch between multiple speakers. For instance, one is not sure where on the screen a particular speaker is, what other receivers of the pitch are doing when you are addressing a question from another member of the audience.
Moreover, research shows that the average attention span of a typical audience is approximately 7 minutes before they start losing focus. Virtual pitches should be planned for 20 minutes and with a 10 minute product demo or video in between for capturing attention. Therefore, the content of the pitch has to be crisp and concise. Ruthlessly prioritize key information - a good thumb rule will be to retain only half the original slides you have planned (reserve the rest for Q&A as applicable). In addition, you can create a distinctive presentation overview to help you organize and prioritize. You can follow the model below:
Evince Engagement
Another simple and powerful refinement is to focus on the audience’s interest. This means transforming the slides from “what we need from you” to “How what we are doing is relevant to you”. That requires you to have a reasonable comprehension of your investors’ objectives (research on previous deals and track record). In the absence of such insights, you may articulate upfront and clarify their interest and knowledge on the subject.
To center the focus on the interest of investors, an effective method adopted by John Bowe (Speech Trainer and award-winning journalist) is to use the simple 15-word sentence:
As a result of my [talk], they will understand [this], and respond by [doing that].
For example:
“When I present the team slide, investors will understand the strengths of our team and respond by asking us [question 1, question 2, question 3]”
“When I explain our GTM plan, investors will understand our plan to create network effects respond by asking us [question 1, question 2, question 3]”
Qapita ProTip: Invite questions if you sense a lack of engagement. Prepare in advance what might interest your audience or help make a connection (a relevant anecdote, for example)
Connet to Communicate
In the era of disconnection, we may occasionally reminisce about the liveliness and ability to gauge personalities of people. Virtual interactions void the ability to form such judgments. Nonetheless, it is this exact reason that makes the ability to communicate effectively more important than ever.
A keystone of effective virtual interaction is reading facial cues. Hence, it will be apt to insert intervals during the pitch to minimize the presentation deck; establish eye-contact, and build rapport with the investors. “If founders can use the human element to establish rapport and trust digitally, chances are they can do that with prospective employees and customers”. Look into the camera. Make the right leading statements to ensure attention before making an important point.
Qapita ProTip: Scripts can serve as cues and add smoothness to the pitch. Practise with a script but deliver without a teleprompter.
Prepare and Organize
Recall the experience when we were the audience to a presentation with choppy audio, toddlers screaming in the background, and pixels of the presenters’ face filled the entire screen. How long did you last before you start scrolling your phone? Undoubtedly, delivering an impactful and polished presentation requires not only video-friendly techniques but also utilizing the proper equipment and setup.
If you are looking to impress your investors, you can prepare in the ideal presentation setup – investing in an external webcam, microphone, supplemental lighting, and non-distracting background. Your expressions, voice, and points can, therefore, be conveyed clearly and animatedly.
In addition, familiarize yourself with the communication interface. Practise using the sharing function, audio enhancement, and troubleshooting the connection. The most effective way is to engage in a mock presentation with your friends as the audience and prompt them to be as critical as possible. Subsequently, it will add refinements to your pitch, fortify your confidence, and prepare for any questions the investors may throw at you.
Peak End Presentation
According to Daniel Kahneman's peak-end theory, the human brain primarily evaluates and remembers peak experience and ending of the experience. You can create a lasting impression by closing your presentation on a strong note with an impactful recap or a bold vision. After the pitch, remember to send a thank you message and complete the follow-up actions.
Qapita ProTip: Ideally, the demo should be the peak experience and the big, bold vision or a relevant vital stat the closing experience.
The Silver Lining
Pitching is a skill and takes a lot of deliberate practice. The silver lining to abbreviated virtual pitches is that the process is inexpensive, can be done from the convenience of your home / office. Moreover, it is proven that stories, motivation and passion can be communicated on digital media (think televangelists). Motivation and passion come from within - with sincerity. Embrace the change, even if it appears difficult at the outset.
Our finishing line is a quote from
Franklin D Roosevelt - "Be Brief. Be Sincere. Be Seated"
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