Week 5 Update
- Week 4 Recap
- The Due Diligence Package and the Executive Summary
- Pro-Tips On Pitching
- Midpoint Retrospective
- Taking Care Of Yourselves
Week 4 Recap
Last week we talked about several core elements for planning your business. In particular, we discussed the importance of having a sound understanding of your business’ unit economics and capital requirements. We also discussed the importance of traction. We are moving far beyond the scope for business plan competitions – we are looking at the realities of building a business. Real data from paying customers is what we are looking for.
We also talked about what happens when your market data invalidates a hypothesis so central that it invalidates the fundamental premise of your business. If that happens, that’s totally ok. Watch this video from Eric Ries, author of “The Lean Startup”, that explains what “pivots” are about and also how companies like Youtube and Flickr pivoted to their current success. A pivot is a change in strategy, not a change in vision. Pivots are good for a new venture’s long term success because it means that the founders are staying close to the market and the customer, and taking action based on data.
The Due Diligence Package And The Executive Summary
The Due Diligence Package
The midpoint of the accelerator is a very good time to start thinking about assembling a due diligence package for your venture, starting with revising your venture’s Executive Summary.
What is a due diligence package and why should you make one if you are not actively fund raising? Very simple. The due diligence package forces entrepreneurs to look at their own venture through the eyes of an external appraiser as if they are raising money or pursuing a merger-and-acquisitions deal. It is largely a process of data curation and data presentation (hopefully). More importantly, in the process of preparing the package, it is almost guaranteed that entrepreneurs will find things they need that they don’t have. It might be market validation they don’t have. It might be documentation about a clear path to the necessary intellectual property they are trying to license. It might be documentation about noncompetes and non-solicitation agreements that protects the business from leaching company secrets and talent to the competition. Putting together a first-pass due diligence package will help entrepreneurs prioritize their activities to fill in the gaps.
Due diligence packages vary in level of detail and content based on company stage, maturity, and purpose of the due diligence. For new venture builders, we recommend that you consult Docsend’s Due Diligence Checklist regarding what goes into an early stage growth-style startup’s due diligence package. Here is a top level summary of the components of this checklist.
- References (personal and professional). This covers references for the venture’s product, services, and people.
- Corporate records and documents. This includes any organizational documents, meeting notes, organization charts and the like.
- Business plans and financials. This describes the business case for your venture and explains how it is a financial sustainable enterprise.
- Market research. This includes primary and secondary market research data that supports your hypotheses.
- Intellectual Property. If you are licensing a patent OR you have a new invention that is patent pending or patented, be sure to include that. this also includes IP protection on trademarks.
- Shareholder information and agreements. This is very important – have you raised equity capital? Have you issued stock options or grants to employees? This determines ownership of your company.
- Material agreements. Do you have letters of intent or contracts proving purchase intent from your paying customers? Do you owe money? Do you have license deals to use technology from another company?
- Risks and potential litigations. Is there any potential lawsuits or regulatory investigations?
- Employment relations and benefits. What is the full list of employees with their compensation packages? What do the templates for the offer letter, benefits etc look like? Is there an employee handbook?
- Equity grants. What percentage of common stock are you holding back for employees and how much equity have you granted?
Most very early stage ventures will not have all of the above. We have created a streamlined, minimalistic Due Diligence Package Checklist for our accelerator cohort. Have a look.
The Executive Summary
One document that is an excellent start to creating this due diligence package is the Executive Summary. It forces you to go through a majority of the above items and provides a high level summary of what the venture is about, and what progress it has made to date. Consult the Executive Summary Instructions. Create, or revise, your executive summaries to take into account the latest data and knowledge.
Pro-tips on Pitching Your Venture
The Executive Summary helps people read about you, and the pitch allows you to convince them with your passion. Following are some pro-tips to help you develop and deliver the best venture pitch possible.
Get to know the audience
When you are delivering the pitch, your goal is to communicate your passion and vision to the audience in the room (whether in-person or virtual). It is important for you to understand who is in your room.
For most private meetings you will know who you are talking to. You can do research on Google to understand who they are, what they know and what they care about, so you can tailor your pitch to speak to their interests.
For networking and Demo Day events, you usually won’t know who is coming ahead of time. You will need to make some educated guesses about the types of personas in the audience and what they are looking for when they come to see you pitch.
For example, for a university accelerator Demo Day, we typically see other student and alumni entrepreneurs, advisors and mentors, potential funders, and the general public in our ecosystem who are interested in what Tufts entrepreneurs are creating. They will come from all sorts of backgrounds. Most of them will not know you and many will not know your industry domain. You will need to make your pitch emotionally interesting so you make a connection, and build up each idea you present based on something else you presented early on so even complete strangers can follow your pitch and be inspired by you.
As a rule of thumb, your audience for short venture pitches do not need technical details on how you implement things. What they need to know is why you are in business, what the problem is, how you solve it, what is special about your solution, you and your team and therefore, why you are the team to solve this problem.
“Think, Feel, Act”
What do you want the audience to think, feel, act? Write this out first and it saves you a lot of time.
You want to open with something that really captures the imagination of the audience. 2 pro tips from Professor Beth McCarthy, Lecturer for Derby Entrepreneurship Center:
- Always remember your why – your underlying passion for the problem you are solving
- Start with the user / customer and go light on statistics. Make it relatable.
Develop a narrative structure
For 60 second pitches we like:
For a 5 minute pitch you can do
- Who is the customer / what are their pain points
- Solution / how it’s better
- How big can your impact be / what is your path to a much bigger market
- How it can be financially sustainable
- How is the world a better place / how are your customers in a better state once your solution exists?
For a 5 minute, Demo-Day pitch, consult the Guy Kawasaki template.
However, please use this as inspiration only. Make sure the requisite information is covered – but in a flow that is authentic for you. It is your story – tell it your way!
End with an ask or call to action, or a “mic-drop moment”
People will remember how you start and how you end more than the details in your pitch. One way is to end with a call to action so people have something to do / think about. E.g. “If you also care about X, come talk to us afterwards and together we can <do wonderful thing together>” or “We are looking for advisors in area X – help us do <ABC>”
Another way to end the pitch is to end with an aspirational vision that lifts everyone and inspires them to think of a better future.
Either way, make sure you “stick the landing”. Some teams are so pleased to arrive at the end of their pitch that they rush the ending – don’t do that! People remember how you enter and how you exit and it is very important to take the time to reiterate your call to action and/or restate your tag line, and end strong.
Start strong, finish stronger
People remember how you start, how you finish and how you make them feel in the middle.
Make sure you start strong, make an emotional connection with a “hook”, tell a compelling story then end stronger. Especially the ending – make it intentional and memorable – a lot of people sound like they are relieved to get to the end. That detracts from your ability to make an impression. Instead: End the pitch on a high note then go into the Q&A.
A lot of teams end with a call to action: “I ask you to get out your phone right now, go to the App Store or Google Store and download X. It only takes a moment! Thank you!” or a repeat of their tag line: “We are Company A. We <insert amazing thing you do that makes the world better>. Thank you”. Then, they pause. Then, mic drop.
Create beautiful slides
The current look for pitch deck is a highly visual, simple, clean look with very few words on them. Consult Hubspot’s “How to design a slide deck that doesn’t suck” for pro-tips.
Have a look at the 2022 TechStars Boston Demo Day and watch a few videos to see how the professionals do it. We do not expect you to be at the level of maturity as these startups – but you CAN have the same stage presence – use this as a style guide and source of inspiration for your own pitch.
Not a designer? Canva.com is a free graphic design service that offers a lot of slide templates to make it easy for you to achieve that clean look. Just know that a lot of people use Canva so if you don’t customize your template, you may end up with the same exact colors as someone else’s deck.
Slow down when delivering your pitch
Most presenters rush. Don’t. You want to be talking at a rate that is slow enough for good verbal comprehension for the audience. We find that pitches that go faster than about 100 words a minute are hard to understand.
Also, research shows it takes 7 seconds for people to get used to a new person’s style and accent. Make sure you don’t overload the first 7 seconds with a lot of super important details – this is especially true for people who speak English as a second language.
Pause before and after your pitch
Most of these events are recorded and we typically trim the videos so each team can have their own video clip of their main pitch.
For this to work successfully, please show your first slide, get ready, then pause for a moment, smile, then start. Complete your pitch up until the mic drop moment, stop strong, pause for a moment, then invite questions. This simple pro-tip will also give you a much stronger start and end to your pitch.
Hands and body
Some presenters touch their face or hair while presenting without realizing it. This is distracting and takes away from your gravitas. Try keeping your hands at waist level and gesture with the whole palm open, from the midline of your body outward.
Some presenters move around a lot – they may alternate their weight from one leg to the other constantly, or they may walk continuously. This is also distracting. Plant yourself, make eye contact with at one person (anyone will do), deliver a thought, then walk purposefully (if you choose to walk). Stop, make eye contact with a new person, and deliver another thought. Don’t keep moving – that detracts from your pitch.
Do not wring your hands – gesturing with your hands to help make your point is good, but do it a little more slowly than you would do in normal speech.
Make sure your body language is open and relaxed and your shoulders are down. Practice some power posing for 2 minutes before going on stage – it really helps.
Be intentional about how you practice
You don’t need to go top to bottom every time, in fact that’s not effective. Intentional practice with trouble spots is much more time efficient. How we do it:
- Go top to bottom a couple of times.
- Practice the beginning and the ending. Once more, with feeling: People remember how you start and how you finish, then they remember how you made them feel. The middle, not so much. So: Practice the first 15 seconds until you are comfortable. Once you are in the pitch your momentum will take over and you’ll be fine. Then repeat with the end.
- Go top to bottom again and find all the places you are getting stuck.
- Back up 1 sentence and practice that transition until you get it down – sometimes that means you need to change how you deliver that talking point, other times it’s just getting comfortable.
Be careful with scripts
Scripts are good, and scripts are dangerous. TED speakers work from a script – but they spend 6 weeks iterating it, writing and rewriting it, practicing until they are over practiced (the “uncanny valley” when you sound flat, like a robot), then they keep pushing past that point until they can emote at will over the script which has become part of them.
Most of us do not have this much time. A much easier thing to do is to write down a few talking points and then just give yourself the talk top to bottom a few times to get a hang of it, then just talk to the talking points. You will sound like your conversational self and you will not sound like you are reading from a literary classic.
Don’t worry if you skipped some points during the delivery
No one knows what you meant to say in the beginning – if you forgot a whole paragraph, that’s totally fine! Just keep swimming.
Congratulations! You are at the halfway point for the accelerator! You have just wrapped up the Foundational Sprint. Time to do a retrospective.
We encourage you to ask yourselves the following questions.
- What went well regarding your progress compared with your expectations?
- What could have gone better – and what did you learn from the process?
- What might you do differently in the next 5 weeks to accelerate your progress?
The overarching question is this: Are you on track to achieve your summer goals? Reflect on that – and reflect on whether your original goals are the right ones. Then take what you have learned and course adjust as needed.
You might find that the halfway point is a tough time for you. The novelty has worn off, you may not have achieved as much as you had hoped to achieve, and you may be feeling a little tired. Or you may be mid-pivot – and the future looks murky. Don’t get discouraged. Instead, think about all that you have accomplished thus far – and celebrate all that you have learned. Apply the learnings to accelerate your progress in the second half of the summer.
You might also find yourself dealing with team conflict, since this may be the first time you all have worked together at a high level of intensity. This is a good time to read “50 Questions to Ask Your Cofounder” by Gloria Lin, Cofounder of SitelineHQ, and “Founder’s Dilemmas” by Noam Wasserman.
All this is normal. Take the time and space to think strategically about how you, your team and your venture are doing. Reflect on the knowledge you have built. Then make decisions about whether to persevere, pivot or otherwise shake up your approach to not only achieve your goals, but to exceed them beyond your own expectations.
While making progress on your venture is important, taking care of yourselves is important too. Burnout is real. Make sure to create rituals and routines for rejuvenation for yourself and your team.
Some people are not great at taking care of themselves. You might find yourself running fast, and then burning out, cyclically. If that sounds like you, you may be a “catalyst”. Read “Move Fast, Break Shit, Burnout: The Catalyst’s Guide to Working Well” by Tracey Lovejoy and Shannon Lucas. Then create one new rejuvenation routine for yourself this week. Your brain, your team, and your venture will all thank you.
In the second half of the program, we will be piloting an exciting new program called “The Entrepreneur In Entrepreneurship” by Dr. Ali Hill, J98, Founder of Sound Advice Women, who is custom designing this program for our accelerator. Stay tuned for more information!