There’s a popular saying that ideas without execution are useless. 

Well, I have a new twist to this quote. I believe ideas that you can’t clearly communicate to others are useless. 

If you can’t communicate your ideas, no one will understand you. And if no one understands you, no one will buy your product or invest in your company. 

This means great communication is everything. And during our recent Founder Summit (which is a preview of what’s to come at Hustlers’ Retreat), hundreds of you joined us live for Eric Bahn’s talk on crafting your story for investors.

After reviewing thousands of pitch decks and raising $100 million for Hustle Fund, Eric shared the five essential things for a great pitch. 

1. team
2. problem
3. solution
4. market
5. traction

Your odds of success skyrocket if you have just these five slides nailed down. 

Team

The most important thing Eric cares about in pre-seed companies is the team. 

Since pre-seed startups often have no customers or traction, there’s very little to judge them on outside of the people behind the idea. Because at the end of the day, investors are not just investing in your idea; they are investing in you and your co-founders. 

Eric wants to see two main things:

1. Your team has the relevant skills and experience for solving the problem you’re going after. If your startup wants to create a cure for COVID but you and your co-founder have no medical experience, that’s a big red flag. Work on problems where your team has a competitive edge. Show investors why your unique backgrounds are ideal for your business.
   
   
2. Your team has a strong relationship and has experience working together. Maybe you co-founded a different startup together. Or if you’re just starting out, emphasize the projects you’ve collaborated on or the products you shipped together at a previous company.

Problem

It’s not enough to have a big problem statement. How you got to that problem matters. 

Imagine you’re a realtor and want to stage your homes with houseplants. But you don’t want to buy new houseplants for every showing. This gives you an idea – houseplant rentals for realtors. 🌱

You’re ready to start pitching this idea to investors, right?! Hold up. 

Sure, you’d pay for that. But will others pay for it? 

How many people did you talk to? Did you validate the idea? Have you researched companies that are already tackling this problem? Investors want to see that you’ve done your homework and can convince them that this is a massive problem. 

🔥Hot tip: Through these customer discovery conversations, you might discover a big market beyond realtors. 

Solution

If you’re super early stage, you may not have a fully built out product yet. 

But investors want to see something. Like a prototype, an MVP, or even a Figma design. 

Here’s why:

1. They want to know that you’re capable of building the tech… especially if your product is complicated software
2. They want to see that you’re making progress, even if the product isn’t perfect. 
3. They want to know that your product is (or will be) differentiated from the competition. If you’re not thinking about this differently from other entrepreneurs out there, the chances of you acquiring customers is quite low.

Market

At Hustle Fund, we have a simple question that helps us with all our decision-making:

Do we believe that you are a founder with the right team and market to support a 100x outcome?

Or in other words, if we invest at a $1 million valuation, does your business have the potential to exit or IPO for a $100 million valuation?

This means the market that you’re going after must be huge if you’re trying to raise money from VCs. 

However if you’re trying to raise money from angel investors, that’s a different story. 

Traction

Most early-stage companies won’t have much traction yet. But there are things you can include in your story to show progress. 

• Do you have a pilot program in place? Do you have any early users or customers? 
• What’s your go-to-market strategy? Explain your thought process behind your strategy. 
• What are your distribution channels? Do you have marketing experience in these areas? 

Investors want to see your thought process behind distribution and how you’ll execute your plan. 

Final thoughts

Eric gets a little concerned when he sees slide decks that are over 40 pages. If you follow Eric’s framework, these five slides will be the most essential.

For pre-seed companies, the “team” slide is the most important. When Eric evaluates pitches, he likes to see a team of resilient hustlers who’ve worked together before and have a shared vision in building something huge.

For seed+ companies, the “market” and “traction” slide is more important to investors. Eric likes to see if companies found product-market fit and have a path to scaling the business. 

We’re going to have a pitch boot camp with Eric at our event for founders, Hustlers’ Retreat. Join the Hustle Fund team and 70 other hustlers in person this summer. 🌞