Don’t Make These NDA Investor Mistakes – 6 Things You Should Know

Don’t Make These NDA Investor Mistakes – 6 Things You Should Know

by | Jul 27, 2017 | Pitch

Many entrepreneurs are scared.

They have the most brilliant idea and are scared that it gets stolen. Sure, ideas get stolen every now and then and you don’t want that to happen to you.

Many entrepreneurs see the NDA as the golden solution to this problem. ‘If I can get somebody to sign my NDA, my idea will be safe’. Although that might be partially true, sending out NDA’s usually is a bad idea.

What is an NDA?

NDA stands for non-disclosure agreement. It’s a contract which states that the receiver will not use or share the mentioned information with others.

 Why you shouldn’t send an NDA

There are multiple reasons why you shouldn’t send NDA’s, especially not too investors.

  1. You look like an amateur

It’s generally known that investors and VC’s (venture capitalists) don’t sign NDA’s. If you do decide to send an NDA it shows that you have little experience and which makes you lose credibility.

  1. It puts too much focus on the idea

Yes, it sucks if your idea gets stolen. But the idea isn’t the most valuable asset of your company (if that’s the case, you got some work to do). Your team, experience and traction should be more important than simply the idea.

By focusing too much on the idea, you create the impression that the idea is all you got.

  1. Investors don’t have the time to steal your idea

Investors are often experienced and/or retired entrepreneurs. They have some cash in the bank and want to be involved in fun and profitable projects. There is no way these investors are changing their lifestyle back to the 60 hour workweeks of an entrepreneur. Investors are investors, and it’s unlikely they will go back to being an entrepreneur.

  1. It’s not necessary to discuss everything

Instead of asking for an NDA and coming out with all the (sensitive) information you got, you can also tell about your company without revealing the sensitive information.

  1. It annoys investors

Investors don’t like signing NDA’s for various reasons. The main reason is that your competitors might have similar ideas. The investor doesn’t want to be limited to only you.

  1. They don’t hold up in court

Unless you are willing and able to spend lots of money in court, you’re most likely going to lose in court. Investors and VC’s have lots of resources and will put the best lawyers in place. When your company raises $300.000,- it would be a shame to allocate $80.000 to lawyers for a case like this.

When you should send an NDA

Of course there are a few scenarios where you should send an NDA. If the potential investors wants an external party to dive into the technical specifications of your company, it’s not strange to ask for an NDA.

In the case you don’t trust the other party you can also ask for an NDA. However, if you don’t trust the other party you should ask yourself if you want to do business with him or her anyway.

Conclusion

The damage of sending an NDA is usually greater than the benefits it can bring. Be careful with sending NDA’s. If you consider sending an NDA, please consider alternative options before you ultimately decide to do so.

Pitch Deck vs. Business Plan – 3 Differences You Should Know About

Pitch Deck vs. Business Plan – 3 Differences You Should Know About

by | Jul 27, 2017 | Pitch

Pitch deck vs. business plan

Before we start the big pitch deck vs. business plan comparison, we need to understand the basic information.

What is a pitch deck?

A pitch deck is a number of slides which summarizes your company. A pitch deck is not something you present, but rather something you send to potential clients or investors. Because of this, you should make sure that the pitch deck includes all the information required, since you can’t add information during a presentation.

 

What is a business plan?

A business plan is a detailed description of your company. It explains what your company does, how things are going and what your future plans are. A business plan can be as long as anywhere between 10 and 100 pages.

A business plan usually has two functions:

  1. You send it to investors, to give them information about your company
  2. You can use it later as a reference guide for yourself, to see if you’re still on track

 

So now you know a little bit about the differences between a pitch deck and a business plan. Does this mean you should only create one of them?

No. For your company you should always have both of them. I’ll explain why.

 

Why should you create a pitch deck and a business plan?

It’s not always pitch deck vs. business plan. In fact, you should create them both.

Since a pitch deck and a business plan have a very different set up, you should also treat them differently. A pitch deck is used when a potential investor, partner, or client wants to know the basic information about your company. Since it takes a long time to read a business plan, this one is usually sent over only when an investor is seriously contemplating investing in your company.

Because of this a pitch deck is usually the way to go. The ratio ‘sending a pitch deck’ vs. ‘sending a business plan’ will probably be around 10:1. As a rule of thumb, you only should send a business plan when somebody explicitly asks for it.

 

What is the difference between a pitch deck and a business plan?

Pitch Deck Business plan
Length 10-20 slides 10-100 pages
Design Try to minimize the text and use a good amount of visuals. To create your pitch deck you can use PowerPoint, Prezi or Keynote. Describe the details of your company as good as possible. A business plan is usually created in Word.
Timing You send over a pitch deck when you want to have a meeting with an investor, partner of client. You send over a business plan when an investor considers an investment, or when somebody explicitly asks for it.

When do you send a pitch deck or a business plan?

Pitch deck: As descried, a pitch deck can be sent early in the process. This can be done through cold ‘acquisition’, but preferably from an introduction via a mutual connection.

business plan: As described, a business plan doesn’t get sent too often. You need to have a business plan for yourself as a reference guide, but also for cases when an investor asks for it.

What is more important: a pitch deck or a business plan?

Since you’ll be sending a pitch deck way more often than a business plan, you might say that a pitch deck is more important. However, a pitch deck is usually created after creating your business plan. The business plan is the foundation for your pitch deck, and therefore is equally important.

We can help you with your pitch deck

If you don’t have experience with creating a pitch deck it can be a tough ride to create one. You want it to have a slick design, but even more important, it should communicate the right things. We can help you with this. Drop your information at https://pitchskills.com/pitch-deck/ and we’ll create one for you!

What Is A Business Plan?

by | Jul 27, 2017 | Investor Pitch, Pitch Fundamentals

What is a business plan?

A business plan is a detailed description of your company. It explains what your company does, how things are going and what your future plans are. A business plan can be as long as anywhere between 10 and 100 pages.

A business plan usually has two functions:

  1. You send it to investors, to give them information about your company
  2. You can use it later as a reference guide for yourself, to see if you’re still on track
The Official Investor Pitch Template Of 2017

The Official Investor Pitch Template Of 2017

by | Jul 26, 2017 | Pitch

What is an investor pitch?

An investor pitch is a short story about your company. The goal of an investor pitch is to convince the investor to invest money into your company. You can use this investor pitch template to create your own investor pitch.

When do you use an investor pitch?

An investor pitch is usually done in front of a group of investors. Think about a startup event, or a pitching contest. This type of pitch should not be executed when you pitch to an investor one-on-one.

When you are in a one-on-one meeting with an investor you usually already sent over the pitch deck. In this case the investor already knows a lot about your company, which changes the situation completely.

This investor pitch should therefore be used when you talk to a group of potential investors, or when you participate in a startup contest.

Are you looking for an investor pitch deck template? Read the article on the 40 best pitch decks of 2017

The importance of a great investor pitch template

An investor pitch is important when your company is looking for funding. Nowadays many people have a high quality camera on their phone, which makes it easy to record your pitch. If you are capable of pulling of a great investor pitch, you have a chance of being shared online, which could get you funded quicker than you’d expect.

 

The Investor Pitch Template

I want to enable you to create your own investor pitch simply by following a few steps.

There are 3 main steps, which will be divided into small tasks:

  1. Outline the topics of your pitch
  2. Fill in the exercise
  3. Formulate the results of your exercise into smooth sentences

Let’s make this more specific.

1. Outline the topics of your pitch

Since most investor pitches won’t last longer than two minutes, you should keep it short. You don’t have time to go over every detail. Therefore, it’s best to stick to the following 6 topics.

  1. The opening– A few words which catch the attention of the investor
  2. The problem– What is the problem your company is trying to solve?
  3. The solution– How do you solve this problem?
  4. The business model– How many potential customers are out there? And how many have you already captured?
  5. The team– What are is the skillset of your team? Do you have experience in this field?
  6. The call to action– What do you want from the investor? What does he get in return?

2. Fill in the exercise

Below you will find an exercise which helps you to craft your investor pitch. Simply answer the questions and use them for step 3.

  1. The opening

During the opening of your pitch is important to grab the attention of the listeners.

  • Do you have an unexpected fact about your company?
  • Did you gather 1500 downloads on the day you launched?
  • Or is there a celebrity which is using your product?

 

 2. The problem

After you opened your pitch, it’s time to present the problem to your listener. During this part your only goal is to make the listener feel the problem.

You should describe it in such a way that your listener experiences the pain of the problem.

  •  What is the problem you saw before you launched your company?
  • Can you describe a person you actually know who has this problem?

 3. The solution

During the solution part you explain your solution to the problem you described earlier. This is the moment where it’s your job to make listener excited.

You should describe the solution in such a way that the listener sees the opportunity and starts believing in your idea.

  • How does your solution work?
  • What are the benefits for the person you described if he uses your product?

4. The business model

During the Business model part of your pitch you explain how you are planning to generate revenue. In this part it’s your job to convince the listener of the financial opportunities of your idea.

The listener must get the feeling that there is a possibility of a serious financial advantages if he becomes part of your idea.

  •  Who pays for your product?
  • How much will he pay?
  • How many potential customers are there in your target group?
  • What is the size of the market? (price * potential customer)

 

 5. The team

So you made the listener excited about your idea and the possibilities. Now it’s time to show him why you are the right person to execute it.

 Do you or your team members have experience in this industry?

  • What did you achieve in the past few years?

 

6. The call to action

During this part you tell your listener what you want him to do. Do you want him to invest? To partner up? To make a deal?

Be clear about your call to action and focus on only one. Research shows that mentioning multiple call to actions reduces the success of your call to action.

  •  What do you want from your listener? And what does he get in return?

3. Formulate the results of your exercise into smooth sentences

Combine the answers you crafted during step 2 and make them into smooth sentences.

On average, a human being is able to speak around 260 words in two minutes. However, since you want to leave room for a pause every now and then you should aim for 240. You should practice your pitch and see how long it takes you to go from start to finish.

Make sure to end your pitch a few seconds early, since this will make sure you don’t have to stress about finishing in time.

 

Concluding thoughts

Use this investor pitch template and make it your own. Do you want to learn more about becoming a great pitcher? Get the Ultimate Pitch Guide.

Did you like this investor pitch template? And do you know fellow entrepreneurs who could use this? Share this with the buttons below.

 

FREE CHEAT SHEET

Do you want to kickstart your pitch with 40 actionable pitch tips?

GET 40 PITCH TIPS