The first rule of sales is to conclude your presentation with the ask – buy my product, hire my company, give us a chance – it’ll be the best decision you ever make. Every web page has a call to action at the bottom, and usually at the top, too, and in an annoying pop-up: buy our product, sign-up for our newsletter, download your free trial. So why do most pitches end with a wimpy “thank you for your time”? Come on, people. Never forget – your pitch is a sales pitch but instead of selling products, you’re selling equity in your company. Wrap up the pitch with your ask – buy our stock now, it’s the best investment you’ll ever make!
But you can’t just ask us to buy the stock; you have to give us the key deal terms, the most important of which, by far, is the valuation (or cap). It’s essentially the price you’re selling the stock at. It’s impossible to evaluate the investment opportunity without it, so please, please, please include it in the deck. A great investment at a $5M valuation may be a lousy one at $15M. It’s no different from real estate – in my neighborhood, if you list a house for sale under $1M, you’ll have a hundred offers within the hour. At $5M, it’ll sit on the market forever. Just saying it’s a wonderful house on a big lot has no meaning without the price.
Other terms you should include here are:
- Amount of raise
- Pre-money valuation
- Liquidation preference
- Board representation
- Any non-standard terms
For a convertible note or SAFE:
- Amount of raise
- Valuation cap
- Interest rate
- Maturity date (convertible note)
- SAFE type
But don’t stop there. Additional details will help provide clarity and make the deal more attractive. List the following if they apply:
- Previous funding rounds, amount and valuation
- Target closing date
- Amount already committed
- Lead investor
- Any prominent investors
Congratulations! You’ve just completed a great pitch. Now it’s time for the Q&A where we put all your assertions through the wringer.
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