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"Returns matter a lot. It's our capital." — Abigail Johnson
This week during the Incubator Light Program we focused our attention on the Elevator Pitch, a 45 second easily understood introduction pitch of the founder's business. We then went over the pitch deck fundamentals as preparation for next week's exciting presentations.
An Elevator pitch is representative of those few seconds you would get in an elevator as you travel a couple of floors with an investor. You have the journey time to tell your project's story before they get off.
In principle this sounds easy, however the reality is very different. Being able to concisely portray your whole project, who you are and explain the ROI in such a short amount of time takes practice, bolstered with technique.
Rather than cover the Who?, What?, Why?, Now?, Why Now? And Return Milestones, I would like to take this opportunity to discuss the process of breaking down complicated ideas into simply understood ones. We work in an emerging industry, and it may appear foreign to outside investors, so it is important we can explain to them quickly how they will make a return.
When it comes to our own projects which we are familiar with, it can feel difficult to break down the structural processes into expressible information, this is a point we initially discovered during this week's incubator elevator pitches.
So what does it take to communicate expertise simply?
The first problem starts on your side of the table, you have a captive audience to start with. Eager to hear about your proposal, you are the expert, but it can be counterproductive to unload all that expertise on your audience unfiltered. Instead, make things easy for them to understand.
Avoid jargon – We use many acronyms in crypto and terms that do not yet leak out our sub-culture, so break the DAO's into decentralized autonomous organizations and pretend your audience has no idea about cryptocurrency terminology.
Tell a relatable story with analogies and metaphors - Investors understand finance, so if you can explain your crypto model in relation to any current financial model it will help make sense. We often hear comments like 'Oh so this is similar to a hedge fund pool'. Ultimately, communicate in a language investors will understand.
A clear structure - We have outlined the components which a good elevator pitch could include, depending on how you want to tell your story will determine the order but have your order lined up to serve a narrative with purpose.
The Key sentence (takeaway) - Once a person has stopped speaking we regularly have a few key points they mentioned which we use to round up what they have just discussed, we call these takeaways. What are the key takeaways from your pitch that will secure your investment? Bold statements typically stand out, and a properly projected return will always stick with an investor. Example - Amazon Web Services provides digital storage. At a fraction of their cost and with much greater speed and efficiency, we make their tech look antiquated.
Audience - Imagine explaining your technical model to an audience of children, is it still too complicated for them to understand? Then shorten it down, so it is more concise with more advanced language, and you should be ready to go while still avoiding all jargon.
Hopefully these pointers will help break down your ideas and make them easy to understand for anyone, perhaps practice on a people close to you, see if they understand what you're talking about. Remember to KISS - Keep It Simple Stupid.
Next week we will be doing 7-minute presentations from each of the founders demonstrating and implementing everything they have learned over the previous 4 weeks. With all our practice at brevity, 7 minutes will seem like a lifetime.
When it comes to a pitch deck, investors are hoping to see a project presentation that is Concise, Achievable, Believable, and Future-proof.
It is important to cover the Problem, Solution, and use of funding allocation. If you would like to recap any of those subjects, please see our previous weekly blogs.