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Rainmaker Securities Discuss How to Construct the Perfect Pitch

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Rainmaker Securities Discuss How to Construct the Perfect Pitch

PR Newswire

LOS ANGELES, July 25, 2018 /PRNewswire/ -- Often times raising the first few rounds of capital can be very difficult since many investors will be skeptical on how tangible your companies' products are and if your companies can truly disrupt the market. A compelling presentation will allow your company to gain credibility with investors right away. Your company needs to construct the perfect pitch since you often only get one chance when pitching an investor. By utilizing the following pitch structure and content you can maximize the potential for a positive investor response.

SLIDE 1 – Why are you here? This is your elevator pitch. The foremost item that needs to be addressed is a quick overview of the business and the investment opportunity. The overview of the business is composed of the mission of the company, business problem solved, products sold, the specific market, revenue model and list of locations. The investment opportunity should state the general terms of the investment in a concise manner.

SLIDE 2 – Who is our core team? The overview of the company's team is the subsequent item in the pitch. Lead with a holistic statement that states what most of the members have in common and how they plan to execute the business plan. Introduce the team by highlighting the work experience and academic background of 3 to 4 individuals that are instrumental to the success of the company and presenting pictures of each key individual.

SLIDE 3 – What problem do you address? Highlighting the business problem is critical. Identify a shortcoming in the market that the company addresses. Present statistics on the shortcoming and the impact of not addressing the shortcoming.

SLIDE 4 – What is your solution? Next, the company should provide an overview of the products by providing pictures of the products, describing what the products do, stating the price of the products, stating what makes each product different. In many instances, an investor may not be familiar with all the jargon present so either use clear language or add supporting text. Conclude this section by discussing how the company's solution addresses the business problem.

SLIDE 5 – How large is your market? Next, it is important to distinguish between the total addressable market and the served available market. Total addressable market (TAM) is the total market demand for products within the company's core competency, whereas served available market (SAM) is the portion of the TAM targeted by the company's existing products and within the company's geographical reach. Remember to explicitly lay out the assumptions for calculating the TAM and SAM which can be derived from online third-party sources or calculated based on assumptions. Lastly, gauge whether these market figures are realistic relative to other markets figures.

SLIDE 6 – How do you reach your market? Another critical element of the pitch is how your company is reaching the target market. In this section you should discuss the sales, marketing and distribution strategy. What are your most important venues for gaining market visibility? Will you hire in house sales staff or partner to gain distribution (or both)?

SLIDE 7 – How do you make money? Next, the company should discuss its revenue model. The company needs to maximize the revenue for each customer by assessing the demand and supply for their products based on its current business model. The intersection of demand and supply curves will yield a price and quantity which can multiplied together to obtain total revenue. Elasticity of demand and supply will heavily influence total revenue so justify slopes of these curves based on desire and availability of products in the market.

Lastly, support the revenue and profit projections by comparing your projections to the growth experience of similar companies.

SLIDE 8 – Who is your competition? There is always competition for any idea. Perform extensive market diligence to determine market share and fragmentation of the market. Provide a list of criteria that assess the performance of the product to gauge the effectiveness of the company's product verse the competitor's products. End this section with the company's competitive advantage beyond those criteria.  

SLIDE 9 – How will you monetize the investment? Investors want to assess their return by gaining insight into the company's exit strategy. For M&A exit, mention big players in sector and recent M&A transactions and discuss potential synergies that company can provide. For IPO exit, discuss timeline and plan for becoming a public company and mention recent IPOs that have occurred and their performance since their IPO.

SLIDE 10 – What are your offering terms? Provide details about the ask. For equity deals, answer the following questions:

  • How much is being raised and for what % of equity?
  • What is the use of proceeds?
  • What type of securities are being offered?
  • What are the preferences of these securities?
  • What price are these shares being offered at?
  • What is the current valuation of the company?

For debt deal, answer the following questions:

  • How much debt is being raised?
  • What is the use of proceeds?
  • How long is the tenure of the debt?
  • What is the interest rate of the debt?

SLIDE 11 – Recap. Why is your offering a compelling investment? Finally, recap why this investment is compelling by discussing offering terms, products, competitive advantage, financial highlights, milestones, and exit strategies.

By following the aforementioned presentation structure and content, your company can create a compelling investor pitch.

ABOUT RAINMAKER SECURITIES: RainMaker Securities has 50 seasoned professionals that can assist clients in creating a compelling investor pitch, as well as performing extensive valuation and financial modeling to ensure that our clients are selling equity or debt at a the most compelling price. RainMaker Securities can also assist our clients to get their marketing materials in front of the right investors by leveraging our extensive network of top venture capital, private equity, and corporate strategic investors from across the globe. Contact ganderson@rainmakersecurities.com for more details.

This document does not represent an offer to sell or a solicitation of an offer to buy any security. Any such offer must be made pursuant to a private placement memorandum or other definitive legal documentation prepared by the company offering the securities (the "Offering Documents"), and the securities are only available in states in which the offering of the securities is registered or is exempt from registration and only by a broker/dealer authorized to do so. This document contains excerpts from the Offering Documents, and should be read in conjunction with the Offering Documents prior to making any investment decision. The securities offered in the Offering Documents ("Securities") are offered through Rainmaker Securities, LLC – a registered broker dealer, Member FINRA/SIPC, 11390 West Olympic Blvd., Suite 380 Los Angeles, California 90064 ("RMS"). These Securities involve a high degree of risk, are speculative and involve a high degree of risk. The Securities have not been approved or disapproved by either the SEC or any state agency, nor has either the SEC or any state securities commission endorsed the accuracy or adequacy of the referenced Offering Documents. Any representation to the contrary is a criminal offense. An investment in these Securities should not be made by any person or entity that is not in a position to lose the entire amount of such investment, or one who needs liquidity of the investment. Only individuals and entities qualifying as "accredited investors" or "qualified institutional buyers," as defined by the Securities Exchange Commission ("SEC") are allowed to invest in these Securities. Potential investors in the company should carefully consider the risk factors contained in the Offering Documents to evaluate the company and its prospects before purchasing the Securities. This document and the referenced Offering Documents both contain forward-looking statements that are not historical facts, and are based on the company's attempt to describe the outcome if it executes well on its business plan. They are not guarantees of future performance and are subject to risks and uncertainties beyond the company's control or ability to predict. Potential investors are cautioned not to place undue reliance on these forward-looking statements, which reflect the company's management's view only, as of the date of this document and the referenced Offering Documents.

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SOURCE Rainmaker Securities

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