Don’t let jargon ruin your investor pitch
My work requires that I look at a lot of startup investor pitches. The truth is that I love looking at investor pitches. I love the passion, the innovation, and the optimism of startup founders. That’s why I work with them.
Founders are smart people. So it’s not surprising that they do a great job with the basics of creating an investor slide deck. They have the right general number of slides, they have the right general categories for each slide, and the slides are generally in an order that makes sense. I say “generally” because most of these decks are created based on general information about how to put together a pitch deck. The internet is filled with pages and pages of general information and pitch deck templates.
Since each company and each founder are different, general direction only takes each founder so far. The specifics of what goes in the deck or in the script is more difficult to figure out. Founders know that they want their deck to impress investors. And what impresses investors more than anything? Buzzwords!
Are you impressed with my Buzzwords?
The Merriam Webster dictionary defines a “buzzword” as “an important-sounding usually technical word or phrase often of little meaning used chiefly to impress laymen.” The website, MarketingTerms.com defines a buzzword as “A trendy word or phrase that is used more to impress than explain.” YouDictionary.com’s definition is “a word or phrase used by members of some in-group, having little or imprecise meaning but sounding impressive to outsiders.” Finally, even Wikipedia says “Buzzwords often derive from technical terms yet often have much of the original technical meaning removed through fashionable use, being simply used to impress others….”
Note that the definitions all share 2 traits. The first is that the words are mostly used to impress, rather than to communicate, describe, educate, or persuade. The second this is that they are used to essentially impress rubes, outsiders, or laymen.
That should almost be enough of a reason to leave them out of an investor pitch. While you do want to impress investors, you want to do it the right way. Impress them with substance. Impress them with things like the quality of your team, the brilliance of your solution, or the amount of traction that you’ve gotten. In other words, impress them with facts, stated simply and digested easily and credibly.
The second common theme of buzzwords is that they are meant to impress outsiders. Investors are not outsiders. They are typically people who are savvy about your industry and have recently seen dozens of pitches. Buzzwords don’t bamboozle people like this. They don’t impress people like this. In fact, buzzwords can raise more questions than they answer.
How buzzwords backfire
I can understand the lure of tossing a few buzzwords into a pitch deck like a verbal seasoning. It can make your deck seem relevant, or sexy, or bleeding edge. But the reason that buzzwords seem to be all of those things represent things that are difficult to do well.
I’m not saying to never include buzzwords in your deck. If you really are developing an AI-based recommendation engine, bravo. Or if you truly have an interesting application for blockchain, bring it on. The people that this post is aimed at are the founders that are trying to slap a buzzword onto their concept to try and dress it up or to impress investors. Investors will want to know how AI will help, or what using blockchain adds to your solution’s effectiveness.
My advice? Keep your pitch clean, simple and engaging. If your concept happens to rely on something that is in vogue to work, or to create a competitive barrier, feel free to include it in your pitch. But also be fully prepared to explain how it helps.
If you think this is me overreacting, I watched a pitch where the founder was building a dating site and made sure to mention that unlike other dating sites, they were going to use blockchain. When asked how they were going to do that and how it helped, they said: “I’m not really the technical person, but I know that it will help prevent fraud.” Huh? Hopefully, I don’t have to tell you to avoid including things where you can’t explain the basics.
On another occasion, I watched a pitch where the founder kept using the phrase “machine learning and AI” without understanding that machine learning is a subset of AI. Make sure that you fully understand all of the words you use in your presentation.
If you’ve seen more than 2 pitches, you’ve seen at least one that uses the word “disrupt”. Goodness knows that everyone wants to use that to add some heroism to their venture. But if you are adding the word to elevate your venture, you should know that everyone is disrupting these days. Remember what they said in The Incredibles movie: “when everyone is special, no one is.” When everyone is disrupting, then disrupting doesn’t make you special, or memorable.
Before I go, I just want to leave you with a list of words that make my Spidey Sense tingle when I hear them in pitches. If you use them, be prepared to show that you understand the words and that you can explain how they are relevant to your concept.
Buzzwords to avoid
Here’s a sampling of buzzwords that can raise questions for investors (or just make them yawn)
- AI (Artificial Intelligence)
- Hacking (especially growth hacking)
- Paradigm shift
- Game changer
- Big Data
In spite of the fact that investors are sophisticated, they like simple. They really just want to know why you’ll be successful and how they’ll make money backing you. Buzzwords without substance don’t help with either.