9 out of 10 startups that I met always asked about fund raising… Even though it is important to have sufficient fund to growth your company, but if you Google around you will notice that funding is not on top of the list of the critical success factors.
Anyway, to touch on this hot topic, I would like to start off with the fundamental…
Just like going for your job interview, you need to have a resume first. Same goes with starting your fund raising exercise, you need to prepare for it. The first thing first is to have a business plan. From the business plan summarise it into what we called an information deck. From there create another deck – the pitching deck.
Business plan – a details document that lists out a 2 to 3 years business & product road map, financial forecast & expenses, sales & marketing plan, go-to-market strategies, expansion, milestones & achievements, funding requirements etc.
Information deck – a 20 to 40 slides of information summarising your business plan into something that is easy to consume & digest. Each slide should have about 30% to 50% text & the rest graphic information.
Pitching deck – a summary deck with 10 to 15 slides. Each slides should not have more than 10 words.
The pitching deck is for you to use when you are on stage to do your pitching session which normally only given 5 to 10 minutes. The objective is not to close the funding or to get the investors to understand your whole business model etc… but to allow you to present the important facts that allow you to capture the investors attention & curiosity to get you the next meeting where you can explain in greater detail using your Information deck which has more information. It is also a venue for you to impress your investors on your presentation & sales pitch on the stage, hence it is important for them to pay more attention to you than your slides. That’s the reason why your slides should not have more than 10 words. The intention is that the audience should not spend more than 3 seconds on the slide, after looking at the slide, they should be looking at you & expecting you to explain in more detail on the information you wanted to convey. The slide purpose is to give them the big picture & prepare them to listen to you & not reading from the slide & ignore you.
Most founders make the mistake of sending the pitching slides to investors which is not sufficient. They should send the Information deck instead. But most founders don’t prepare these 2 documents, they normally only prepare one deck that they use for both pitching & sending to investors which not appropriate for both occasions.
Finally the business plan is the most important document that map out the whole blueprint for the company growth plan. This document should be revised / enhanced frequently as the founders gained new experience, exposure & learned from mistakes running the company. This is the document that an interested investor will want to go through later on. So better have it prepared.
by Stanley Chong