The new elevator pitch: Now in five slides or less

Making that initial pitch to potential investors is an essential, and often terrifying step in the start-up process. Conventional wisdom encouraged a pitch of ten Powerpoint slides, but a new trend is pushing consolidation and concision, limiting entrepreneurs to just five slides.

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    Designer Anthony Grant works on his computer at Eventbrite headquarters in San Francisco, California in this May 2012 file photo. More than ever, technology entrepreneurs are choosing the urban charms of San Francisco over the sprawl of neighboring Silicon Valley. Dr. Cornwall suggests start-ups perfect a five-slide pitch to cleanly and clearly communicate their business model.
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Making a pitch for investment is one of the most important steps that many new business owners can make.  It can also be one of the most intimidating.  First impressions matter with investors, so the pressure is on to make your pitch to them a winner.

For many years the rule of thumb was to limit your initial pitch to investors to no more than ten slides in your PowerPoint deck.

But now there is a push to get entrepreneurs to consolidate their pitches even more.  The latest recommendation for pitches to initial investors is to limit the presentation to five slides.

Recommended: Top 5 myths about starting a business

“I am an advocate for communication in a clear, crisp way,” explains Mark Montgomery, founder of the Nashville consulting firm FLO Thinkery.  “Great ideas at the core should be simple.  If you require pages and pages to explain the concept, then perhaps the concept is not fully baked.”

Here is what I would recommend you put on five slides for an initial pitch to potential investors.

Slide One — Who are you?  When it comes down to it, investments are primarily made in people, not in business plans, concepts, or ideas.  The best idea in the world has no value to an investor if they don’t think the entrepreneur can successfully implement it.

Slide Two — What is your concept?  What problem does it solve or need does it take care of for your target customers?  This slide conveys your target market and the value proposition you offer them.

Slide Three — What is your “proof of concept”?   The more real and tangible this evidence is, the better.  Conduct market experiments and, if appropriate, develop prototypes that you can test on real customers.  A great way to get real data from customers is to give the first versions away for free.  The information you get from these first customers will be worth much more that what they might pay for the product.  And, you will have real live customers to talk about with investors.

Slide Four — What is the growth potential for this business?  Tell them what the business can become and what you will need to reach that potential.  Investors want to see growth – significant growth.  They want to opportunity to make their investment back several times over, which means you need to show how the business can grow into new markets or expand into new products.

Slide Five — What is the exit plan?   Investors want a path to get a return on their investment.  Demonstrate that there will be someone willing to buy the business to get them that return.  Find examples from your industry of other startups that have sold to larger companies as evidence.

Your presentation during these five slides should be genuine and passionate.  Show them you are committed, knowledgeable, and prepared.

If you can keep your initial pitch clear and concise, you have a much better chance of moving into more serious discussions with investors.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.drjeffcornwall.com.

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