An entrepreneur’s investor presentation documents and pitch will typically focus on the product or service, numbers, competition, sales strategy and team. What is often missing, however, is ‘how’ key stages and milestones will achieved. In other words ‘how’ the entrepreneur and his team will execute.
An entrepreneur can have an exciting idea with significant revenue potential, but if they fail to reassure the investor that they have the ability to execute, they will not get funded. I spent a couple of years working alongside a very experienced Chief Operating Officer who frequently managed projects worth over $100 million. Whenever a member of the team would state what they intended to do or what needed to be done, she would say ‘by who, by when’ and ‘how’. She even planned her vacations with a Gantt Chart!
When I first encountered Angel Investors and Venture Capitalists seven years years ago, I noticed that they asked the very same questions time and time again of entrepreneurs pitching them. The most common terms used in every meeting seemed to be ‘how’. How will you bring on board your first strategic partner? How will acquire customers? How will you find the CTO you urgently need?
Reassuring an investor that you have the ability to execute can be achieved in two ways. Firstly, by proving that you have previously launched other startups that are successful. A good track record counts for a lot. Secondly, by having thought through how you will execute all key stages / tasks and being able clearly explain this to investors.
It is not necessary for you to spell out the detail of ‘how’ in your Executive Summary or Deck, as that is not the purpose of these documents. You must, however, deal with ‘how’ at a high level in your documents and be prepared to give detailed answers to the ‘how’ questions that investors will inevitably fire at you.
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