Thursday, April 24, 2008

Pitching Your Numbers

Presenting financials by Powerpoint is difficult. It is a great example of where the "Curse of Knowledge" can hurt you. You know the numbers, so you flash them up on the screen and move on to the next slide. The problem is that your audience isn't as familiar with your business and financials, and you have just lost them. That's not good.

Here are a few ideas that I think will help:

1) Think "essence". What is the headline for each slide? Does it convey that you are building value with your venture? Consider a "text box" at bottom that also gives a key point ("we break even after 14 months of operations" or "revenues from carbon offsets and our organic twill caps will exceed the federal budget deficit in 2 years").

2) What are the KEY numbers that demonstrate how your business is sustainable (in a Triple Bottom Line kind of way) and the scale it achieves? Can you show these over the relevant projection period (usually 3-5 years). Think 3x5. Three rows x five years. Or 5 rows x 3 years.

3) Pick a period that shows your business becoming at least a teen, or maybe a grown up. Projections that show losses for a number of years, followed by one year of marginal profitability get an "L" for "Loser". Investors aren't interested in just seeing your "baby pictures" for the business. What does your venture do when it's a grown up? (For those of you who are parents, you know now why no one believes an entrepreneur's story, since we have no idea what our child will be when they grow up, or our business. But we know our dreams, and those may indicate what type of parent/founder we will be.)

4) DON'T put up a slide with a lot of numbers unless you plan to talk about all (or at least most) of them. If you don't plan to talk about a number (or at least that series of numbers), why is it there?

5) Graphs help, but again, you need to talk about them, and tell the audience what the essence is.

Following Kawasaki's 10/20/30 rule, and his Art of the Start recommendations for the 10 slides for a pitch, you really should be able to cover the financial aspects of your business in 2 slides. More detailed discussions of financial projections will occur at a later date, IF you connect with your potential investor with the initial pitch.

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