Creating the Elevator Pitch and the VC Presentation 211 Understanding and Preparing the Elevator Pitch What is the Elevator Pitch? The elevator pitch is a concise but comprehensive description of the business proposition that you wish to make to your potential investor. It should be about 150 words or so and should take about 60 to 90 seconds to deliver. It should describe your company and products, you and your management team, needs that your products or services satisfy, your business model, competition and differentiation. Why is Elevator Pitch Required? The elevator pitch is required to hook a potential investor’s interest. It is akin to an appetizer before the main course, or the spark that kindles the fire. It should whet the VC’s curiosity and comprises all the elements, which interest him enough to make time to listen to your proposition in detail. VCs are busy people. They get hundreds of plans and venture summa- ries everyday. They like to protect their time and apply it fruitfully. The elevator pitch works well for them as it paints a picture of the venture opportunity in a minute or so and helps them to make up their mind on whether or not to explore the possibility further. If the VC gets inter- ested in your venture, he will proceed to ask you to present your busi- ness plan. If not, you may never hear from the VC again. Why is it Called Elevator Pitch? The elevator pitch is so called since it is required to be concise enough for you to communicate it in as short a period of time as possible, say as a co-traveller with a VC in an elevator. Imagine yourself in an elevator with a potential investor. And both of you are together till the elevator reaches the building’s tenth floor. This elevator ride is a perfect opportu- nity for you to get the VC’s attention without getting disturbed by any- one. The elevator pitch would be perfect for such occasions when during a short, unscheduled meeting you have an opportunity to make a funding case for your venture. The opportunity may come through industry fo- } 212 Smooth Ride to Venture Capital rums, venture meets, while travelling, or any other time where you meet and interact with people formally and informally. Whatever the forum, the elevator pitch will come in handy to open doors for you. The trick is to prepare and practice it well enough to deliver it without the need for your laptop, overhead projector or any other visual aid. Tips for Preparing the Elevator Pitch The main point to remember here is that the material for the elevator pitch is already there with you once you have made an executive sum- mary of the business plan. Consider the elevator pitch as the executive summary of the business plan’s executive summary! The executive summary is usually about 500 to 1,000 words. The ele- vator pitch creates its précis in about 150 to 200 words, maybe even fewer, if possible. Basic questions it should answer are: 1. What does your company do? How old is it? What stage of develop- ment is it in now? Is it generating revenues and, if yes, how much? What is the order book position? . 2. Who are you? Give your background and your credentials. 3. Who are your customers? What needs of theirs do you satisfy? Why do they choose to work with you? 4. What are your current products? Who hold the IPRs? 5. What is the scale of the market opportunity? 6. Who is your competition? How do differentiate yourself from the competition? 7. What is the management profile of your company? Has the company entered into any strategic partnerships? 8. Have you already been funded? If yes, who has funded you, how much, and at what valuation? The VC Presentation To present your funding case to the VC, you will require a pithy presen- tation explaining your business plan. You may use Microsoft PowerPoint or any other software which you are familiar with to prepare this presen- tation.
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