Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about
how to send a pitch deck to friends and family. Before we get started, make sure that you
hit that subscribe button, and this way, you will never miss out on any of the videos that
we roll out every week. Ultimately, friends-and-family, it’s going
to be the first money in. It’s going to be the first people or the first potential
investors that you’re going to be coming across. In today’s video, we’re going
to be breaking it down as to how you’re able to get in front of them in a powerful
way and close them. With that being said, let’s get into it.
Pitching friends and family. Essentially, the main reasons why you’re going to be
pitching a friend or a family member is going to be because you want to 1) Practice, 2)
Gain money from them, 3) Have them open the doors to other contacts that they have in
their network. The number one is to get money from them.
It is the best and the easiest money that you can get. It’s essentially people that
love you. It’s not going to be a full-blown due diligence that you need to go through
in order to get that money, and it’s going to allow you to get that first trench in of
cash that you can deploy to build something into something meaningful that later on, you
can use to convince the more sophisticated institutional investors like venture capital
firms or even angel groups. The next one is, obviously, to practice. The
last thing that you want to do is to go to a very sophisticated venture capital firm
or an angel that has invested in hundreds of startups that could make it or break it
for you, and you’re not buttoned up. So using your friends and family as a way to
crowdsource the process, to get them to give you feedback, to get them to help you uncover
those holes that were there, that you didn’t even know were there, is going to be a great
way for you to practice, for you to optimize and iterate the story, the packaging, the
positioning. Then, being in the position of strength when you get in front of people that
perhaps don’t know you, they’re not familiar with your story and don’t really care about
you at all. So your friends and family are going to be really helpful in terms of thinking
how to package this and position this in a better light.
The next thing, at the end of the day, is that they can have a great network. Maybe
your friend or your family member has access to someone that could be a gamechanger for
you, someone that can help you with access to distribution, to subsequent rounds of financing,
to an M&A opportunity of someone else looking at acquiring you. So you want to take a look
at who can they introduce you to that can come in and be a gamechanger for your business?
In terms of the place of the friends and family round, this is going to be the very initial
trench of money that is coming in. Before you even think about a seed round, a Series
A round, where you have angel groups, angel investors, and venture capital firms, friends-and-family
is really the first money in. That’s before anything.
Again, this is going to be small amounts for the most part. It can range between maybe
like $100,000 or $50,000 all the way up. I’ve seen friends and family all the way up to
1 million or 2 million. Essentially, those are the amounts that you’re going to keep
in mind. Again, this is the absolute first round of financing that happens.
Remember that typically, rounds of financing are going to happen every 18 to 24 months,
and as you mature as a business and you unlock certain milestones, then also, you’re graduating
to a different financing cycle. In that other financing cycle, you’re going to have a
completely different set of expertise, skillsets, and profiles that are required from investors.
Who are friends and family? Friends and family are, obviously, immediate family members.
This could be your parents; it could be your cousin, your brother, your sister; it could
be college classmates; it could be high school classmates, maybe people you used to work
with like your former boss. In many instances, I’ve seen a former boss giving a lot of
money to the entrepreneur when building the business. And it could be people in your social
media environment. It could be people that you are connected with on LinkedIn, Facebook,
Instagram, whatever that is, but there’s that direct type of relationship. This is
your first and perhaps even second degree of connections.
When it comes to the pros and the cons of friends and family, the pro is ultimately
that these people love you, they trust you, they care about you, and they want you to
succeed. They’re not going to ask for a lot of due diligence, a lot of questions,
a lot of documents because they already trust you. Trust is present. And believe it or not,
trust is everything when you’re looking to raise money. That’s definitely a pro
that is going to allow you to get that money in quickly so that you can deploy and execute
very fast. When it comes to the con, your Thanksgiving
dinners and your Christmas dinners are going to be all about conversations around the business;
they are going to be all about following up on how the valuation of your business is growing
over the course of time. Don’t forget that if you’re not able to deliver on your promises,
and the business doesn’t perform, and perhaps it’s even failing, some of those relationships
may be hurt and affected. So you want to be very careful and really consider this when
you’re taking money from your friends and family.
Curating your pitch deck for your friends and family. When you’re curating your pitch
deck, keep in mind that you’re going to be keeping it from 15 to 25 slides, so it’s
going to be very straightforward stuff. You can even use the pitch deck template below,
that you can see on the comment section below. It’s for free, and it is used by founders
all over the world to raise millions. You can literally grab that and optimize it to
whatever you’re looking to accomplish. Remember that those friends and family members
are people that you know very well, that you understand their interest, what drives them,
what motivates them. Perhaps you can package that pitch deck with a story that really enrolls
them in that you’re putting some of that magic that is going to get them super excited
to jump into this and share the journey with you.
When we’re talking about how to send and how to share your pitch deck with friends
and family, what you want to do is avoid putting that file into an email as an attachment because
then that could be super big from a size perspective. That could trigger a certain flagging from
some of those email providers, and that could land you on the spam folder of those friends
and family members. What you want to ultimately do is put it on
Google Drive or Dropbox and grab a link and use that link in your email to be what you
share. Maybe it could be something along the lines of, “See below or here’s the link
to my pitch deck,” and whatever you want to put in the email, rather than just attaching
it. The next thing that you want to do is, remember
that this is sales, so you’re never going to close it on that first touchpoint. You
always want to constantly follow-up. Follow-up because the sale always happens in the follow-up.
What you want to do is, rather than continuing on the follow-up via email, take it to text,
MMS, or WhatsApp, because those are underused methods and channels. This could be a way
for you to filter through the noise on their inbox so that you are always on their top-of-mind,
on their priority. That could be something to push things forward and to share the important
document with them. In terms of next steps, once you’ve gotten
that money from your friends and family, you should never go out to celebrate and have
a tremendous party because raising money is never a milestone. Raising money is a stepping
stone. Now you have the people that love you that are trusting you with their money. What
you need to do is work on delivering on your promise, on providing returns for them and
their family. They believed in you. You owe it to them to really give it back to them.
To give them that money back with returns. I would love to hear on the comment section
below how you’re thinking about sending your stuff or dealing and interacting with
your friends and family. Hit a Like to the video as well, and also subscribe to the channel
so that you don’t miss out on the videos that we’re rolling out every week. And if
you need help with your fundraising efforts, send me an email at alejandro@pantheraadvisors.com.
Thank you so much for watching.