A Canvas That Tells a Story: KISS Canvas (v3)

[This is part of a series on the KISS Canvas]

Why

30-page business plans are great for established businesses and terrible for startups that need to iterate quickly. 15 years ago the Business Model Canvas (BMC) changed everything by giving us a 1-pager (or 4×3 foot poster) to help you quickly document and test the key hypothesis behind your business model. The BMC was a quantum leap forward.

However, my students and I often struggled with the structure of the canvas. While it was superior to a business plan it was relatively hard to read & use. You literally needed a map to show you how to read it – start here, jump to there, then jump down to here…

In a Nutshell

And so was born the the KISS (Keep It Super Simple) Canvas. Each key stakeholder (payers, users, channel partners, etc.) gets their own row. Read the columns in each row from left to right and you’ll find the facts of the business model layed out in a logical narrative structure. In fact, it tells the story of your business, as you would in a good pitch. The bottom of the canvas holds the “beard of learning” where you store your invalidated hypothesis, so you can easily remember and tell the story of what you’ve learned in your startup journey. No map required.

At the highest level, this KISS canvas tells the following story just by reading from left to right: We help [key Stakeholders] by providing [value proposition]. We find, earn, and retain their trust by [relationships]. This is economically sustainable because of [financials].

Example:

We help the blind and visually impaired by empowering them to connect with their fully sighted friends and family as equals. We find, earn, and retain their trust through word-of-mouth and strategic partnerships with nonprofits that serve the blind. Customers pay us an $8 monthly subscription.

And today, after 3 years of field testing, I’m proud to roll out version 3! It has two variants. The first is…

KISS Canvas (Lite)

This variant is for people at the “I have an idea” stage.

KISS Canvas (Lite)
  • Key Stakeholders – Who do you serve?
    • Segments – Name each of the groups of people you will deliver value to: payers, users, channel partners, etc. Each gets their own row.
    • Deciders – Describe the actual people (COO, front-line employee, Head of New Products, etc.) who make the decisions for each segment.
    • Pains – What problems do they have?
  • Value Proposition – What do you offer?
    • FeaturesHow will you solve their problems?
    • Benefits – What promises are you making to your customers?
    • Competitors – Who else is solving the problem?
    • Competitive Advantages – How are you superior at solving the problem?
  • Relationships – What kind of relationships will you have with each segment?
    • Marketing – How will you make people aware of your solution?
    • Sales – Once aware of you, what process will they go through to use/pay for your solution?
    • Retention – Once someone is using your solution, how will you retain their loyalty?
  • Financials – How does the money (and value) flow?
    • Value Model – What value does each segment provide you in return for your product (money, attention, referrals, etc.)?
    • Pricing – How much do you charge?
    • Cost Structure –  What are the costs associated with running your venture?
  • Beard of Learning – When you disprove a hypothesis, move it vertically down into the Beard Of Learning. If you’re using sticky notes they will eventually form chains and completely cover the bottom of your canvas and stretch down close to the floor. Each sticky in that beard represents a hypothesis you thought was true… and found out it was not! My students noticed this and one day said “It kind of looks like our canvas grew a beard… a beard of learning!” Thus the name :).

KISS Canvas (Full)

If you are past the I-have-an-idea stage and ready to really develop your business model, then you’ll need to start answering much more detailed questions in each section. If that is you, then check out the full version of the KISS Canvas, where just about all the top-priority questions for a startup have been laid out in step-by-step, fill-in-the-blank fashion…

KISS Canvas (Full)

Examples (inspired by real startups):

Get Your Own (free!)

If you would like to use the KISS Canvas, you may do so completely for free as they are licensed under creative commons :).

Check out more KISS Canvas Content.

RVI’s Guide To Running a Virtual Angel Group Meeting

This post contains our up-to-date set of best practices on how the River Valley Investors angel group runs our meetings online. Last updated on: 5/22/2020

Technology of choice:  Zoom

  1. Prep
    1. Updated 5/18: We send all likely attendees this online meeting etiquette guidelines (kindly shared by the Keiretsu forum).
    2. Before the event, we ask everyone to log in with a device with a camera so we can see each other. They all have been invited to a google calendar event with the link embedded in it.
    3. Created Breakout Rooms from the get-go. I’ve used Zoom for over a year and hadn’t even realized it was built into the pro plan I was already paying for! If you haven’t used breakout rooms before check them outUpdated 4/15: we name the breakout rooms after spots in our area where people like to meet in person. Updated 5/22: We assign some of our trusted regulars to facilitate breakout rooms and help make our new attendees feel and home and meet new people.
    4. Updated 4/15: We also enabled the waiting room feature. This gives us a very easy place to park entrepreneurs and proved to be better than using a dedicated breakout room.
    5. The group Manager and assistant manager make sure to have the Participants & Chat subwindows open (do this by clicking on the respective buttons).
  2. Troubleshooting & networking
    1. Updated 4/9: As our members logged in, once we are sure we can see & hear them and vice versa, our Manager will invite them to head into one of the  Networking breakout rooms to socialize. We aim to put 3-6 people in each breakout so the interactions remain personal. This way people who are ready to go don’t have to listen to others getting tech support :).
    2. As the entrepreneurs login, we have them hop into one of the breakouts room where our assistant manager makes sure the entrepreneurs are ready to share their screen and has their questions answered.
  3. Setup to best re-create in-person meeting
    1. Updated 4/15: Our Manager messages everyone via zoom’s integrated chat when networking time is about up. He then closes all the breakout rooms. This causes all members to be automatically dumped back into the main area in one minute, with a handy countdown. This helps people wrap up their conversations.
    2. With everyone present, we ask people to switch to Gallery mode, this shows a grid of as many people as can fit on one’s screen. It helps recreate (as close as we can) the feeling of all of us being around the same table.
  4. Meeting start & entrepreneur presentation
    1. Updated 4/9: Remind members…
      1. There are bio breaks systematically placed in the meeting, so please stay until the breaks if at all possible.
      2. “Pass a note” to the Manager via Zoom’s Private Chat feature. We discourage people from sending messages to the whole group.
      3. Use the “raise hand feature (click the “Participants” button to find the “Raise Hand” button) to signal you’d like to ask the entrepreneur a question.
    2. Go through our introductory agenda (quick intros, explain the process, etc).
      1. Updated 5/22: Intros in a large meeting can take a while. Instead, we have attendees change their name on the zoom call to reflect their organization or expertise.
    3. Manager mutes everyone (except the presenter) to minimize background noise.
    4. Presenter shares their screen (where they already have their presentation in full-screen mode, ready-to-go). This puts their slides in full-screen mode for everyone.
    5. Updated 4/15: We have presenters confirm that they have a 10-minute timer, that makes noise when complete, ready to start. We set one up as well and if the company runs over time the Manager discreetly private-messages the entrepreneur. Once the entrepreneur has confirmed they are ready to start their timer, we tell them to begin.
  5. Q&A
    1. With the presentation complete we ask the entrepreneur to stop screen-share so we can all see the grid of faces.
    2. Updated 4/9: The Manager uses the list of raised hand symbols visible in their Participants” subscreen to identify who is next in line to ask a question.
    3. Updated 4/9: Manager unmutes the person who’s turn it is (saves a lot of time of people forgetting to unmute themselves), announces something to the effect of “Mary has our first question, and Jim is next in line.”
    4. Updated 4/9: The manager mutes themselves.
    5. Repeat until Q&A time runs out (for us it is usually 15 minutes).
  6. Closed-Door Session
    1. Updated 4/15: When Q&A is complete the Manager politely moves all presenters to the Waiting Room.
    2. The closed-door session continues as normal. At RVI we follow a particular format with the discussion going in three parts…
      1. “Why might this be a great investment opportunity?”
      2. “If you were on the due diligence team, what questions would you recommend they think through carefully?”
      3. “Who wants to be on the due diligence team?”
      4. Updated 4/15:
        1. If there is a due diligence team then the manager asks the team to stay present and releases everyone else to go on break for 10 minutes. The entrepreneurs are brought in from the Waiting Room. The Assistant Manager then coordinates the date & time of the next due diligence meeting.
        2. If there is no due diligence team, the entrepreneurs are sent to a breakout room where the Manager joins them and gives the bad news and a very brief summary of why we did not have the critical mass to proceed. We believe a fast, respectful no with an explanation is the only appropriate and fair thing to do for an entrepreneur. We also offer to have a conversation after the meeting if they want more info. If they are a local company we sometimes invite them to rejoin the meeting at the end to get some targeted advice from the group.
  7. The rest of the meeting
    1. Rinse-repeat for other presenters.
    2. Do end-of-meeting wrap-up (portfolio company updates, upcoming ACA meetings, etc).
    3. At the end of the meeting, invite people to use the breakout rooms if they would like to continue any conversations or otherwise take advantage of the fact a bunch of us are in one (virtual) place at the same time.

How to Come up With Great Ideas

Hand holding light bulb and cog inside. Idea and imagination. Creative and inspiration. Innovation gears icon with network connection on metal texture background. Innovative technology in science and industrial conceptIf your startup/organization/team struggles with ideation (the process of coming up with ideas), you fall into one of two camps:

  1. Those who struggle to come up with any ideas.
  2. Those who come up with plenty of ideas but struggle to identify which ones are worth pursuing.

What follows is a step-by-step guide for solving both problems.

The Short Version

  • Step 1: Get MAD – Remember your Mission, assess your Assets, document the Demand.
  • Step 2: Ideate – Use your MAD to inspire ideas.
  • Step 3: Select Criteria – Determine what is important to your decision-making process.
  • Step 4: Score – Score each of your ideas based on the criteria.
  • Step 5: Decide –  Review the results, make sure your scores are correct, and determine which idea(s) are the highest priority to pursue.

The Details

At the heart of the solution is a simple canvas-style tool: The MAD Ideation Canvas. Like other “canvases” (such as the KISS Canvas or Business Model Canvas), this canvas replaces big, complex ideation systems with a fast, fun, and easy-to-iterate tool. Nothing fancier than a pen, open-mind and sticky notes required!

Here is what the 4×3 foot poster looks like:

MAD Ideation Canvas Template - Poster_ 4 x 3 feet

Download & print the 4×3 ft poster, grab some sticky notes, and follow along. If you prefer to do things on a computer then use our digital version. If you don’t the canvas format then try our worksheet version.

Let’s get started, and as we do, we’ll fill in the canvas with an example from the fictitious Montessori School of MyTown.

Step 1: Get MAD

The best ideas resonate with your personal/corporate/organizational Mission, leverage your Assets, and meet Demand from customers/clients/stakeholders. MAD for short.

IdeaJam-MAD Venn Diagram

  1. M: Remember your Mission – This what drives, motivates, and guides you.
    1. Your first sticky note should contain the essence of your mission boiled down to 8 or fewer words.
      1. Empower children to be great global citizens
    2. Fill the remaining space with stickies that further illuminate your mission and/or values.
      1. Follow the child
      2. Peace
      3. Parent partnership
      4. Joyful environmentMAD - M
  2. A: Assess your Assets – Assets are resources you could put to work right away.
    1. Superpower – Your first post-it should be your superpower. Is there something you are one of the best in your part of the country at (or the whole country, or the world)?
      1. Anti-racism and inclusion curriculum this school’s curriculum is the subject of talks at national conferences.
    2. Physical assets that are not used 100% of the time such as: classrooms, labs, dorms, special equipment.
      1. Classrooms
      2. Playground
      3. Reusable classroom materials
    3. People who are awesome but only working part-time or who are not being used to their full potential.
      1. Teachers
      2. Staff
      3. Board members
    4. Relationships with people such as: customers, volunteers, alumni, other organizations/companies, government agencies, your community.
      1. Other independent school leaders
      2. Alumni
      3. Families of students/alumni
    5. Gravitas earned from places such as: media coverage, awards, reputation for great work.
      1. Multiple awards
      2. Speaker at national conferences
    6. Know-How your team has developed to solve your own problems such as: processes, curriculum, understanding of complex systems.
      1. Anti-racism and inclusion curriculum
      2. Nature curriculum
      3. Financial aid system
      4. Comfort w/ technologyMAD - A
  3. D: Document the Demand – List out any loud signals the market or your customers have given you of things they want.
    1. What have they been asking you for and you’ve said NO to? A subset of this can be something you offer and there is a waiting list to get in, or a long line, you are turning people away because there isn’t enough room, etc.
      1. Montessori for families to use at home
      2. More extensive after-school programming
      3. Year-round programming
      4. Keep asking us to speak at conferences
      5. Teachers elsewhere asking for our techniques
    2. What are similar orgs offering that you are not?
      1. Renting out their space to people who run classes in the evenings
      2. Running child-friendly co-working spaces
      3. Selling curriculum to other schoolsMAD - D

Step 2: Ideate – Use your MAD to inspire ideas

So the whole MAD part of the canvas looks like…

MAD only

  1. Generate – Take five minutes to have each person on your ideation team privately & silently write down a list of ideas inspired by your MAD.
  2. Share – Have each team member read off their list. Create sticky-notes for each idea and add them to the Idea row on the canvas (the row that goes Idea 1, Idea 2, Idea 3…). Make sure to ask each other questions to be sure you understand each idea. Add any new ideas that are generated by the dialog.
  3. Simplify
    1. Combine ideas that are similar.
    2. Split up compound ideas.
    3. Some ideas were unclear. Rewrite their names/descriptions so everyone “gets” what the idea is about.
    4. If there are more than 14 ideas, the team leader should select which ideas go on the canvas today.
      1. Montessori @ home – Montessori kids cook for themselves, clean up their messes, and are kind & courteous. Not so much at home. Parents could hire the school to teach them how to have the Montessori behaviors come home :).
      2. Premium after-school – Current offerings are thrown together at the last minute and are basically glorified babysitting. What if we offered ultra high-quality programming parents would be willing to pay extra for and that might attract people from other schools?
      3. Year-round programming – Make it possible for kids to continue their standard Montessori education over the summer (vs going to summer camps). 
      4. Renting out space – Rent our classroom space (after hours) to consultants, yoga instructors, etc.
      5. Child-friendly co-working – Dedicate one of the empty rooms in our new building to be dedicated co-working space. Good for parents of current students and might attract new parents to the school.
      6. Teach teachers anti-racism curriculum (online) – Teachers/schools pay to become trained and certified in our curriculum. All done online so we can access people anywhere in the country.
      7. Nature curriculum teaching retreat – Similar to the previous idea, although as it would be nature-based the training would have to be in-person.
      8. Financial aid webinars for other schools – They pay to attend webinars run by our CFO.

Step 3: Select Criteria – Determine what is important to your decision-making process

Most people’s process for debating ideas ends up being “whoever makes the best argument.” This sounds meritocratic, but it really isn’t.

  • Sometimes people with bad ideas win the argument because they are great at arguing.
  • Sometimes people with great ideas lose the argument because they lack sufficient rhetorical skills.

That’s not how to make a decision. You want to make decisions based on good data. One way to get good data is to agree on the criteria by which the ideas will be evaluated. Then score the ideas and look at the how the numbers fall out.

  1. Generate – Take five minutes to have each person on your ideation team privately & silently write down a list of criteria important to them.
  2. Share – Have each team member read off their list. Create sticky-notes for each idea and add them to the Criteria column on the canvas (the column that goes Mission alignment, …, Criteria 5, Criteria 6, Criteria 7). Make sure to ask each other questions to be sure you understand each criteria.
  3. Simplify
    1. Combine duplicate criteria.
    2. Clarify criteria so everyone “gets” them.
    3. Each criteria should be worded so that high scores are Good Things for your organization. Example: if you want to make sure that ideas are not expensive, your criteria should be “Inexpensive.” If you are afraid of ideas that could hurt your reputation, the criteria should be “Good for Reputation.” For our fictitious Montessori school the list starts with the standard four and then adds some (bolded):
      1. Mission Alignment
      2. Have the assets
      3. Proof of demand
      4. Revenue potential
      5. Fast & Cheap to try
      6. Help us recruit more students
      7. <No 7th criteria selected>
  4. Weight – Some criteria are more important than others. Let’s select some criteria to be weighted twice as heavily in the final calculations.
    1. Generate – Each team member should privately & silently take 60 seconds to write down the 2 criteria they think are the most important.
    2. Share – Everyone shares.
    3. Decide – The team leader decides which criteria (no more than half the criteria, please) are the most important and puts a star to the left of the criteria title. For those doing this on the digital canvas, put an * in column A just to the left of the selected criteria.
      1. The Montessori School puts stars on criteria 4, 5, and 6

Step 4: Score – Score each of your ideas based on the criteria

  1. Generate – Each team member should privately & silently score each idea on each criteria. We generally recommend a scale of 0-2 with 0=this idea does not (or basically does not) meet this criteria; 1=this idea meets the criteria so-so; 2=this idea totally meets this criteria. You can do this by giving each team member their own unique set of colored sticker-dots (so later everyone can easily see who gave each score). Everyone will see each others’ scores, but we recommend you instruct people to ignore what their peers are doing at this stage.
  2. Sum – Once everyone has placed their stickers someone needs to sum up how many dots are in each idea’s column, remembering to count starred criteria twice. The sum goes in the bottom row. Those using the digital canvas don’t need to do this manually as it calculates it all for you.
  3. Highlight – Circle the 2-4 highest-scoring ideas. If you are using the digital version of the canvas, it should automatically color code the scores. Red=lowest scores, Green=highest scores.

It should look something like this…

Montessori scoring example

If that is hard to read, check out the google sheet the image came from.

Step 5: Decide –  Review the results, make sure your scores are correct, and determine which idea(s) are the highest priority to pursue

  1. Double-check your math so you avoid making decisions based on bad data!
  2. Where there any surprises? Did any ideas people thought were great/bad end up scoring the opposite? If so, is that because the wrong criteria were selected, there was miscommunication about the idea, or because people’s initial gut feeling was wrong? All of those are valuable things to learn!
  3. Engage in a lively team discussion about the top-scoring ideas. Focus the conversation around criteria where there was a lot of disagreement in scores. This is a chance to learn from your teammates’ perspectives. People may volunteer (don’t ask them to do it) to change their scores.
  4. Review the finalized numbers.
  5. The team leader uses these numbers as a guide to determine which idea(s) they want to prioritize, and to do so with confidence. In our example Montessori school, the Head Of School decides to invest resources in further exploring the top 3 scoring ideas and one that her gut says to explore more:
    1. Premium after-school
    2. Teach teachers anti-racism curriculum (online)
    3. Year-round programming
    4. Child-friendly co-working space

 

 

Selecting the Top Angel Deals in the Northeast… on Google Sheets

I am told that the angel groups of the Northeast have one of the best systems for syndicating deals in the country. There are many parts to making that happen. I have the privilege of running the nomination, application, and selection processes.

The process is efficient and fair and might be helpful to other angel groups, or to other groups who see a lot of applications from people seeking money (accelerators, foundations, government agencies, etc). And… no coders or high-tech talent required, we do it all with free/cheap tools we can easily modify to meet our needs!

None of what I am sharing would be possible without the contributions of the staff of the Angel Capital Association (ACA) and the participation of so many angel investors.

Process Overview

  1. Set the timetable
    1. The ACA selects a date for the regional event.
    2. 7 days before the event we announce which teams are presenting.
    3. 14 days before the event applications from entrepreneurs are due.
  2. Call for nominations
    1. Keep a canonical list – If you don’t have a canonical list, you are going to miss people. The Angel Capital Association maintains a Google Groups mailing list containing the leaders of all angel groups in the region and anyone who has served as a deal lead for a previously-nominated deal.
    2. People forget, so remind them – We send out “call for nominations” emails (and reminders) to the mailing list and personalized versions to each member of that mailing list 1 day before the deadline, 7 days, 14 days, 21 days, and 30 days. To keep it from being annoying we use features of MixMax so that anyone that writes me back doesn’t get follow-on reminders.
    3. Make it easy – Most angel investors do this as a hobby, so you need to make it easy for them. We, therefore, pack all the info they really need into the “call for nominations” email. Furthermore, the only things they have to do are:
      1. Forward that same email to the CEO of the company they want to nominate.
      2. Email the CEO a short endorsement blurb.
    4. Put the work in the hands of the people motivated to get it done – You’ll note in the prior step almost all the work is done by the startup CEOs. They are very motivated to get things done, done right, and on time. Even the email is very short so the deal leads can read it quickly and pass it on. Then the entrepreneurs click the link embedded in the email to get a full page of detailed instructions.
    5. Here is what one of our “call for nomination” emails looks like
      1. Subject: Paul, nominate deals by 3/15 for next ACA NE Syndication Meeting

        Request:

        1. Nominate deals by 3/15 @ 11:59pm for the upcoming ACA NE Syndication Summit by
          1. Forwarding this link (http://goo.gl/d4wgm) to deal CEOs.
          2. Sending the CEO a < 5000 character summary of your investment thesis (CEOs include it when they fill in the application form).
        2. Help select presenters by reviewing the best companies in the region. Sign up via this form to join the selection committee.

         

        Background:

        1. Nomination Requirements:
          1. Your group will champion the deal and serve as the central coordinator for follow-on due diligence efforts.
          2. Deals in due diligence or in term-sheet negotiation are certainly welcome. That said, preference will be shown to deals that at least have a term sheet from the champion angel group.
        2. Deal leads are strongly encouraged to serve on the Selection Committee so we can learn more about the company you are nominating. Time commitment is about 2 hours to read deals and 45 minutes for a con call. Please note that we have a simple and effective ranking system that removes conflict-of-interest issues while allowing us access to the personal knowledge of the deal leads. Sign up to help select presenters via this form.

        If there are any questions, do not hesitate to contact me.

    6. Provide clear instructions for entrepreneurs – This is obvious, but most of us goof it up anyway. We certainly did for years and are always striving to be clearer and more respectful of the entrepreneurs’ time. The “call for nominations” email features a link for the CEOs to click where they find all of their instructions.
  3. Collect applications – We collect applications via a google form. We configure the setting so that applicants get a receipt and have permission to edit their entry after submission. This turns out to be a gigantic time-saver, stress reducer and increases quality. Otherwise, you have panicking CEOs and/or deal leads calling and emailing you at all hours!
  4. Create packet – We have our google form dump its data into a google sheet (see a sample with dummy data here). Then by applying filters, some spiffy conditional formatting, and hiding some columns, we can have it display only applications that are for the current period.
  5. Send packet – This packet is sent to the mailing list so that the startups have maximum exposure to the investor community and to set the stage for voting.
  6. Selection – This is done in two rounds.
    1. Round 1
      1. Ask everyone – You want to leverage the wisdom of crowds by getting lots of smart people to independently assess the startups. So we ask all members of the mailing list, as well as all angels who nominated a deal this time around, to cast votes. The requirements are that they review all applicants and vote on all of them.
      2. Collect the votes – Angels are not asked to rate companies by how much they “like” the company. Instead, we ask them to predict how successful the company will be at raising money thanks to the event. The difference is subtle, but it is important. See the 1st round voting form (w/ dummy data). Angels have a set deadline to cast their votes.
      3. Normalize the data – Some people score generously. Some people score harshly. We adjust everyone’s scores so that each angel’s scores add up to 100 points.
      4. Adjust for conflicts of interest – We want people who are invested in one of the nominees to vote. But obviously, they are biased in favor of their nominees. To mitigate this we…
        1. Don’t let angels score companies they have a conflict of interest with (equating to an initial score of zero). As this would hurt their nominee, we then…
        2. Replace the 0 scores with the average score the other angels gave the company. In this way, an angel does not help or hurt their nominee.
        3. As each angel’s scores added up to 100 before, because of step 2 we’ve just increased their total contribution. So…
        4. We decrease the angel’s other scores proportionally to bring their total score back down to 100.
        5. You can see all the gory math here.
      5. Schedule the video conference for the 2nd round.
      6. Publish results of 1st round – The mailing list and everyone who signed up to be on the 2nd round video conference get an email that looks something like this…
        1. Subject: ACA NE selection, 1st round voting results [confidential]

          CONFIDENTIAL – DO NOT REDISTRIBUTE

          Okay, legal stuff out of the way, happy day all! Here are the results of the first round of voting. We’ll use this to inform our conversation later today <date/time/link info>

          1st round voting results DEMO DATA

          * Z Score: # standard deviations above or below the mean score. AKA how much better or worse is this company than the average company in the packet. Note that scores have been adjusted for conflict of interest.
          * Drop: # of standard deviations this company is below the next highest ranked company. AKA, how much “worse” is this company than the previous company.

          My initial recommendation is:
          * Accept the top 7 ranked companies.
          * We debate who the remaining 3 slots go to, accepting arguments from the next 5 highest-ranked teams. If there is a champion for any of the other companies, they will get a spot to advocate for the company.
          * I shoot everyone a poll to cast a 2nd round vote for who should get the remaining slots.

          Details:
          You can see the gory details on this google sheet. Most relevant tabs are: “Summary”, “Chart of Scores”, and “Chart of Dropoff in Score”

    2. 2nd round – Goal is to allocate 8-12 presentation slots
      1. Save Time – The purpose of the first round is to save time for the 2nd round. We’ve all been in deal selection meetings that go on forever and aren’t even all that effective. When you see a chart like the one above, it makes the argument faster. The top-rated companies just get in, no debate needed. The bottom companies don’t get in for much the same reason. You can then focus the time on giving away the final 1-3 slots to the much smaller set of companies in the middle.
      2. Debate – advocates for the companies in the middle get to speak for 1-2 minutes. Allow a few minutes for Q&A. Move on to the next company.
      3. Final Vote – Using this free tool I create a ranked-choice voting poll while everyone is debating. When the debate is over I publish the voting link to the chat in the video conf and give everyone 5 minutes to cast their votes. As it is ranked-choice voting, the final selections are ones that have majority support, which is awfully helpful. I present my screen and show people the poll results, I also email them to the participants so everyone has an audit trail of the voting.
  7. Wrap up
    1. Startups (and their nominating angels) that did not get in receive a polite note letting them know. They also get copies of the feedback provided in the 1st round voting form so we can help them learn from failed bid to present.
    2. Startups (and their nominating angels) that got spots receive an email with a link to a google doc with detailed instructions on everything they need to maximize their odds of success.
    3. The list of nominating companies is announced to the Google Group mailing list.

 

 

Startup Pitching Checklist

This is the checklist/boil down of the techniques listed in the prior 3 posts in the “Startup Pitching” series. After you complete a draft of your pitch, go over this list to make sure you’ve applied as many of the techniques as possible. If you want any of the checklist items expanded just click on the section header (Beginner, Intermediate, Advanced) to go to the blog post that explains the details.

  1. Beginner (101)
    1. One rehearsed presenter – Pick one person to deliver your presentation, don’t tag-team your pitches.
    2. Know your audience – Customize everything about your pitch to meet the cultural norms of your target audience.
    3. Set your objective – Your objective is to get another date, not marriage/investment. Stop freaking out :).
    4. No jargon or acronyms – Use plain English accessible to a lay audience.
    5. Split up your slides – Turn a slide with X bullets into X slides with one bullet each.
    6. Make fonts readable – Minimum of 30 points. Period.
    7. No Math – Don’t show any derivations, just show the results.
  2. Intermediate (201)
    1. Dead seagulls – Put a large, immediately relevant image on almost every slide.
    2. Front load credibility – Put the 1-3 most credibility-establishing facts about your company right after your title slide.
    3. Plant seeds, don’t tell it all – You don’t have time to tell it all, so boil down each section of your business to the 1-3 most important parts.
    4. No BS Financials – Focus your financials on fundamental economic drivers of your business, not BS projections.
    5. The one number rule – Don’t have more than one number (maybe two) on a slide.
    6. Use relative values – Don’t give absolute values, instead convert them into relative values.
    7. Prep for Q&A – Before your pitch identify the most likely questions and have polished answers ready to go.
  3. Advanced (301)
    1. Timing is everything – Make sure that on the slides immediately before powerful images your speech prepares the audience.
    2. Tell a story – Don’t rattle off facts, weave them into a story.
    3. Inoculate the audience – Address any deal-killing objections right in your presentation. Don’t wait for Q&A.
    4. No complex issues – If there are any complex issues in your business that you know are not relevant, don’t bring them up on the 1st date.
    5. Results not resumes – Identify the 2-4 most critical skill sets a company like yours needs and then show examples of your team doing exactly those things… brilliantly.
    6. Risk reduction, not line items – Don’t tell us what things you are spending money on, tell us what risks you will mitigate.

Hungry for more? Here are 25 more tips from some of the top people in the angel investing world.


View all posts in the “Startup Pitching” series

Startup Pitching 301

This is the 3rd post in the “Startup Pitching” series. In this post, we’ll go over advanced-level (301) techniques.

1. Timing is everything

Once you get good at using Dead Seagulls on your slides you want to take a page out of the comedian playbook… dramatic timing. If the image on a slide is particularly powerful, you don’t want to bring the slide up and then explain it. That will confuse the audience or rob you of the emotional punch you could have achieved. Instead, prepare the audience during the prior slide and then advance when the emotional timing is right.

2. Tell a story

At least a hundred thousand years before science and logic were developed we humans communicated via stories. Our brains are hard-wired to digest information packaged that way. Stories center on people, not bullet points. They have a protagonist and often an antagonist. So take your facts and craft a narrative around them.

You might start with a set of facts like this…

Our website allows customers to find and play games with friends, family, and strangers. Like a play-by-play on the radio, our game reads aloud all of the action and text chat.

And turn it into something more like…

Jane invites her grandson to join her in a game of cards on our site. Minutes later they, and several others, are playing and chatting. No one can tell who is blind and who is sighted… they only know who is winning – Jane! 

And don’t just do it on one slide. Your protagonist should keep appearing in your story. Weave the narrative through as much of your presentation as possible. Here are some more advanced tips for adding narrative to your pitch.

3. Inoculate the audience

Most vaccines work by giving a person a weakened version of a virus/bacteria before they would normally encounter it. You can take the same concept and apply it to your pitch. If there is a certain kind of objection that comes up again and again during Q&A, that is a signal you need to address it right in your presentation.

For example, my first company made video games for the blind. It turns out that most investors thought that all blind people were also intellectually disabled. Once we realized this, we updated our pitch so that our narrative featured Jane (mentioned above) who clearly was not intellectually disabled. We made sure to introduce our blind teammate  wrote code and skied.

4. No complex issues

Continuing our dating example… imagine this situation. You are going on your 1st date with someone and, for completely legitimate reasons, your X is currently living with you. If you bring this up on the first date, is there a second date?

Heck no.

Why? Because there isn’t enough time and trust to go over something complex like that. The purpose of the first date is to get a basic understanding and decide if a second date is warranted.

So if there are any complex issues in your business that you know are not relevant*, don’t bring them up on the 1st date. They should be brought up when you have the time and trust to explain things fully. Often times company financials fall into this category as they are just too complex to go over in spreadsheet form at a pitch meeting.

* You’ll notice in the example I gave the X was living with you for legitimate reasons. If they were living with you because you two are friends with benefits… that seems like a legitimate deal-breaker for the person you are going on a first date with!

5. Results not resumes

This is a specific application of the Show, don’t tell rule. The team section is one of the most important (arguable the most important) part of your presentation. Almost everyone does it the same way, by telling the audience about the resumes of their team members. This is dumping data on the audience and asking them to connect the dots. Also, resumes tend to emphasize the wrong facts.

As you want their funding/support, don’t make the audience work that hard! Spell out for people why your team is right for your venture.

In general, you should ditch the names, titles, degrees, and previous employer info. Instead, identify the 2-4 most critical skill sets a company like yours needs and then show examples of your team doing exactly those things… brilliantly.

The ideal team slide sounds something like this:

[for a company making artificial-intelligence software for hospitals]

From what I’ve told you so far, I bet you can see a few critical skill sets our team needs.

  • The particular kind of artificial intelligence needed for this work is very rare. There are only about 1000 people in the world qualified to do it. We have five of them.
  • Selling software to hospitals is notoriously difficult. Fortunately for us, previous to founding our company our CEO sold $100 million worth of software to hospitals.

The presenter narrowed it down to the 2 most important skill sets for a company like theirs and then showed how their team has a track record that should put funders’ minds at ease.

6. Risk reduction, not line items

Entrepreneurs tend to explain to funders how they will spend money. Often in a graph that looks something like this…

How we will burn your money

This seems logical but it sends the wrong message. As a mentor once told me…

“Don’t tell me how much of my money you will burn. Tell me what amazing accomplishments my money will allow.”

A startup is a bundle of risks. Its valuation goes up as it mitigates those risks. So don’t tell us what things you are spending money on, tell us what risks you will mitigate.

Bad example: “This round of financing will be used primarily on working capital to keep us alive until we’re ready for the next stage.”

No one (except maybe your mother) cares about keeping your company alive :(.

Good example: “This round of financing allows us to get a commercial grade prototype into the hands of key influencers in our target market.”

This shows the funders that you A) know what your next major milestone is and B) this money will let you hit it. Staying alive to do so is understood :).


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