In just about any TV police drama, detectives have a way of cutting through the clutter when interrogating a witness – they want just the facts. In other words, don’t waste time on irrelevant information or pumped-up descriptions. Eliminate distractions. Just the facts.
Startup entrepreneurs can take this same advice when approaching funding sources. Hopeful business owners may not be as confident in building a case, so a flashy PowerPoint presentation gets assembled to cover their tracks. Or maybe they overemphasize or underplay the wrong aspects of their pitch, missing the mark in the end. The potential for disappointment can be enormous.
It helps to speak the language of the people and organizations writing the checks. Here’s why.
Funders are looking for indications – as strongly and clearly conveyed as possible – that a startup business is more than just a good idea, because an idea is just that. It doesn’t make money yet. It’s not real yet. And it’s not going to get any funding yet.
Funders are looking for certain criteria before they will commit. Is the business in an industry they typically fund? Is the financial “ask” within a suitable range to generate the returns the funder expects? Can the business win in its competitive space, and why, and how? Can the business prove that others believe in it as much as the entrepreneur? What has been done already, before receiving additional capital, to prove commitment to the concept – such as development of a working prototype, sales achieved to date, and hiring key talent?
Funders are looking for the right fit. The business must appeal to some inherent, many times unspoken, intangible that’s important to the funder. It could be a shared interest in the field that the business addresses, or the markets it will serve, or maybe a personal connection of being fellow alumni of a university. The business seeking funding certainly must offer tangible, measurable, objective evidence that it’s worthy of financial support. But the funder also needs to feel good on a subjective level about the decision.
The Pittsburgh Life Sciences Greenhouse works with startup entrepreneurs seeking early-stage funding. We’ve seen presentations that worked and those that didn’t. Bottom line – lose the extraneous stuff. Stick with just the facts.