The purpose of a company presentation is to stimulate interest, not to cover every aspect of your business and try to answer every possible question they might have in relation to the funding you are looking for.
Your objective is to generate enough interest to get another conference call or a face-to-face meeting.
Thus, it is recommended to keep your presentation fairly short (up to about 10 slides). This impossibly low number forces you to focus on the absolute essentials. You can add a few more, but you should definitely avoid exceeding fifteen – the more slides you need, the more blurry your message is likely to become.
This article will:
- List all of the 10 topics that you should cover in your mezzanine investors pitch
- Walk you through the reasoning behind each slide and what to include there
- Let you download a free PDF summary containing all you need to know – boiled down to the essentials
The only 10 slides you need in a pitch to mezzanine investors
Title / cover slide
Provide your company name, your name and title, address, email and cell number. It is important that the investors can clearly identify your company, as well as know how to reach you and who the right contact person is. Make their life easier by including all of this information on the first page of your slide deck.
You don’t need to over-invest into the design of your cover page. Simple is good, although remember to keep it professional. After all this presentation is all about creating great first impression.
Company background and history
Give an introduction to the company. Mezzanine lenders want to understand where your business is coming from. Having the right context from the start allows them to integrate the information you provide in the presentation into a more coherent picture. Also, typically communicating that you have a well-established and mature business helps with getting the attention from the mezzanine funds.
You should provide information on what business you are in and how long the company has been operating. At the same time, you shouldn’t spend too much space on the historical financial statements, there will be better places for that (See slides 5 and 9). Still referring to high-level figures, such as your annual sales, EBITDA or EBITDA margin might provide a good starting point for the discussion.
Already at this stage you might consider highlighting some competitive advantage or strong point about your business that would gain further prominence later in the presentation.
Tell what and how you are doing to get the cash flowing from your customers’ pockets into your business. Be clear about your value proposition and the customer segment you are serving. Also, give an overview of the key partners, activities and resources that are needed to keep the business running. Overall, the primary drivers of cost structure and revenue streams should be visible here.
You might also want to give an overview of your growth strategy, as growth outlook might be one of the key drivers why mezzanine investors might be interested to provide capital to you business.
There are different ways to precisely define and present your business model. We like to use the visual representation of “business model canvas” from Business model generation by Alexander Osterwalder. It is absolutely not a requirement to use this framework. Whichever approach you choose, keep in mind that you are communicating with the outsiders, thus focus on keeping things fairly simple and straightforward. You can get into nitty-gritty details of your business model once you get the initial interest from potential investors.
Key competitive advantages
While this should a part of your business model, it is worthwhile to specifically highlight the drivers of your competitive advantages. This could be, for example, technology, customer base or a distribution network, to name a few possibilities. Just don’t get too much into creating long text – again, remember to keep it simple. Flowcharts or diagrams might come in very handy.
Mezzanine financing is typically provided for the period of at least 3-5 years and the mezzanine financing companies want to ideally see that your business can prosper during that time-frame. This means both competitive edge that will allow business to grow and unique feature, characteristic or capability that will allow you to defend your position if things turn out not so well. The second point links directly to the next slide.
Sources of business stability
You have to keep in mind that mezzanine financing providers have the mindset of lenders in the first place and equity investors only on the second position. What it means is that, first of all, they don’t want to put their capital at major risk. Therefore, they want some level of protection in the downside scenario. Elaborate on good visibility/stability of your future revenue, ability to scale back costs or sell some assets, if needed, to generate more cash.
You can get here to slightly more details, as mezzanine funds are going to appreciate that you understand their viewpoint from the outset. Having a very strong downside protection and resilience in your business will not only attract the mezzanine lenders to you, but will also be an important point when negotiating pricing.
Communicate if the market is emerging, consolidating, established or declining. Recognize the market size and indicate the key segments and your own positioning. List your key competitors. Overall, provide as complete view of the competitive landscape as possible.
It is likely going to be challenging to cover this topic with only one slide, but give it a try. You want to include the relevant information there to show that you really understand the market. This will help to establish your credibility, especially if the mezzanine firm happens to already have insight into your industry. Even if they don’t, this slide should inform them, so that they at least get the overall view of the competitive landscape.
Describe the key players on your management team, board of directors and board of advisers (if you have one). Tell what their roles in the business are and provide more information on their backgrounds and experience.
It is a matter of your internal policy and preference if you want to include photos of the key people. Ourselves, we like to include these, as business is done between people and it is easier to connect to people if you can see their faces. Remember that if you do decide to include photos, keep them professional and, if possible, visually consistent. They should add to the feeling of professionalism from your side, rather than take away from it.
Funding history and shareholders
Tell how much has been invested in the business so far and who the shareholders are. You can summarize it with a capitalization table.
Even though mezzanine capital providers are not entering directly into the circle of your shareholders, typically at least part of their pay-off will be linked to the value of your equity. Therefore, understanding the funding history and past valuations will be an important step in their due diligence process.
Furthermore, the shareholders are the ones who ultimately drive the decision-making in the company. Thus, mezzanine financing firms want to understand who might be acting, so to speak, behind the scenes.
Current funding needs
Tell how much funding you need in total and indicate what part of that should come as mezzanine. If relevant in your case, clarify what the other sources of funding are and in what proportions. Describe how the funds will be used and when you need to get the financing. Also, put this in the context of the business as a whole and indicate what it will enable you to achieve.
Depending on the situation, you will be looking to raise only mezzanine capital or it will be only a complement to other sources of funds. Whatever is the case, the mezzanine funds will need to understand the full picture. Keep in mind that the financing they provide is typically subordinate to all the other forms of debt. This means that they need to be clear about who will be in front of them in the line.
Also, from your business perspective, mezzanine lenders need to understand why you need the funds and have a good reasoning for the amount of funding. This is best illustrated with an overview of the use of proceeds together with clear statement about which strategic objective will be reached thanks to the funding.
Long-term plans for the company
Clarify your vision of the company for the upcoming years. What do you aim to achieve? Are you looking for an exit (for example, trade sale, private equity deal or an IPO)? Or, do you plan to maintain control of the business and continue growing it?
As mezzanine investors are mid-to-long-term capital providers, they want to understand your overall plans for the potential exit. They equally need to consider their pay-off in case of an exit, as well as for the situation where there is no such event. Clarifying your vision will help them assign more specific probabilities to both possible outcomes.
Other than direct financial considerations, your long-term plans will be also a very good indicator of your approach to running business and the type of decisions that mezzanine funds can expect from you. Overall, this slide will help mezzanine financing companies have a more holistic picture on the investment opportunity that you present to them.
Further practical comments on the use of the mezzanine investors pitch slide-deck
Although it is likely that you will not be showing your company presentation while talking with the potential mezzanine lenders for the first time, it is fairly common that they will ask you to send such presentation after the call. If this is not the case, then you will still show it during your next conference call or meeting. Therefore, you should have it ready.
The structure of this presentation helps you to focus on the right things when preparing for mezzanine fundraising. Still, there is a lot more that goes into the preparatory work that you should complete. For your convenience, we have compiled some additional material that will boost your progress and help you successfully land the funding you need. Please, check the links below.
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