When Facebook secured funding in 2004, they didn’t have a formal pitch. Instead, they had a media pack which demonstrated the platform’s reach and growth potential. The pack highlighted how their market was composed of 15 million college students with a combined purchasing power of $85 billion. The presentation also broke down the user growth rate, as well as the monthly traffic pageviews. The pack’s intention was to outline how advertisers could use the platform to reach a targeted audience.
Facebook’s media pack was grounded in data about growth, traffic and usership. This painted a clear picture for investors who were able to envision the company’s trajectory. This struck a chord with investor Peter Thiel who gave Zuckerberg his first investment of $500,000.
Investors do not invest in companies with the intention of paying off the CEO’s debts or giving him or her a generous salary – although this can happen if the business pitch is strong enough. When they listen to pitches, investors are looking out for a company’s growth trajectory. With this in mind, rebel entrepreneurs use their pitch as an opportunity to paint a big, clear picture of their business’ future. They point to deals they have gotten over the line so far on a shoestring, or they elaborate on their sales’ history and how much bigger it could get with an investment. They avoid being vague and break down their finances with as much detail as possible. This encompasses everything from market size to metrics to profits and expenses. The pitch’s intention is to invite investors to envision just how large the company can grow with their investment.
A financial page is often omitted from many entrepreneurs’ business plans, but this can be a big mistake as a study of over 200 pitches from DocSend and the Harvard Business School found that investors spend the most time looking at this page.
Investors and VCs listen to great ideas every day, but many entrepreneurs fail to secure funding because they are unable to show how their ideas will be executed. Rebel entrepreneurs will have a thorough financial page informing investors that their company has the potential to scale.