Demonstrating to investors why this is the right time and the right company is key.
When talking to investors, you are answering what (product), why (mission), where (if relevant), and how (strategy and go-to-market). But founders often ignore another important question: Why now?
Why wouldn't it have been possible to build the company five years ago? Why would five years from now be too late? The answer is often related to something that is changing and changing, either in the market or with the technological layer. Anchor the company with a good “why now?” slide it is a great addition to the presentation.
Successful companies often have these things in common: They were the right company, solving the right problem at the right time. As an example, all the new companies that emerged during the first years of the pandemic that were solving specific problems related to access to medical care or the presentation of meetings.
Showing that you know why you are launching now rather than any other time will create a sense of urgency: investors will not want to miss a business that is solving what they see as an immediate problem. It's your job to highlight ways your business can address those issues, and why now is the right time to do so.
It is often possible to see some major market trends converge, but when it comes to timing, you are basically trying to read the future. In the words of Wayne Gretzky, you want to skate to where the puck will be, not where the puck is. The "why now?" The question can be answered in a number of ways, but it usually boils down to at least one of three things: technology timing, market timing, and/or regulatory timing.
For example, consumer photography drones. Why did they arrive on the scene when they did? After all, RC planes and helicopters have been around since the 1970s. Compact video cameras (like GoPros) have been around since the early 2000s. It's not that the technology didn't exist; it's that the required technology was prohibitively expensive for consumer equipment.
However, Apple's iPhone changed that. As the smart phones became ubiquitous, small camera modules, solid state accelerometers, radio and GPS chipsets became very cheap, available to hobbyists, and well documented and hackable. Once the technology got small and cheap enough, building camera-equipped drones was the next logical step.
The most successful startups of our era did three things: They caught a trend early and developed a solution to take advantage of it. Google, Facebook and Apple are good examples here: they were not the first search engines, social media or smartphone/computer manufacturers, but saw an opportunity to make the technology easier to use. They were able to build solutions that were better than anything else available. They then ended up defining the industries they entered, riding the wave to the top.
Regulatory changes can also be a powerful market driver. In the MedCrypt presentation, the company explains a change to the US Food and Drug Administration's data security requirements that makes the company perfectly positioned to solve that problem for the millions of medical devices that already exist.
The "Why now?" from MedCrypt perfectly captures the urgency that comes with investing in this business.
You can use your timeline to reiterate some of the startup's biggest strengths. You need to explain the macrodynamics of your space, how the market is evolving, and how new technological innovations They make your business possible when it wouldn't have been possible before.
Remind investors how changes in regulatory frameworks are opening up new opportunities. That includes demographic changes (the population as a whole is aging); technological changes (autonomous vehicles, solar energy, electric vehicles, 5G mobile phone networks); market changes (home ownership numbers, market boom/bust times); significant changes in the way work is done (the gig economy, work-from-home, early remote companies). Many of these trends are somewhat predictable, and the best startup founders know how to spot and harness them to their advantage.
It's an opportunity to remind investors how long your team has been in this industry. Something like, "We saw all these changes when I was vice president of investment banking at Goldman Sachs for 15 years," is a great way to remind investors that has experience and deep domain knowledge.
The "why now?" it's partly about history, but remember that it's not a history lesson; it's about trends. You can use past data and innovation to chart a trend line for the future. Combine that with what your business is doing and where it's headed. The perfect "why now" slide has a fast-moving puck and start moving at breakneck speed to intercept where it will be in five years.
This is the kind of thing that makes investors salivate; The biggest opportunities in the world are high risk, high reward moves. Think big and weave a story of how you are in the right vector to be in the right place at the right time.
