Raising money is not an indicator of how successful your startup will be.
In fact, raising money can almost be seen as a necessary evil. It takes all your time, it comes with a lot of strings attached, and it starts you and your company on a treadmill that’s going very fast that you’re not gonna get off of for a while.
But let’s face facts. There are business opportunities that just can not be realized without the fuel of outside funding. I say this as a dedicated customer-and-revenue-first entrepreneur, and also as an entrepreneur who has been through the funding roadshow more than a dozen times. Because it was necessary.
A lot of entrepreneurs look at an investor pitch deck like a homework assignment they need to finish. I used to, then I realized that what I was pitching wasn’t a startup, but an investment.
In this post, I don’t intend to play VC-whisperer, but I will go over the basics of how to put together a pitch deck that makes sense if you’re raising money for the right reasons.
I’ll start with some don’ts.
Don’t Ask Randos to Review Your Pitch Deck
Please don’t send me your deck.
First of all, I don’t like to tell people if, when, and how to raise money. It’s for the same reason I don’t like to do fly-bys of an entrepreneur’s business plan or business model.
A pitch deck is personal, in the sense that it needs to be unique to the idea, the business, the company, and the company’s need for funding — it’s different for every single startup.
It’s also private, in that there should be a lot of confidential and sensitive information in a pitch deck. So if you want me to give you any advice worth having, I’d need to know a lot of very sensitive information about your business. No one should be doing that from a 10,000-foot level.
Don’t Create the Deck to Create the Deck
I’ve seen a ton of pitch decks that were just paint-by-numbers affairs with some of the right information randomly tossed into a slide-salad of sorts. Most pitch decks are overkill; they’re boring; and they make investors want to stop reading after the second or third slide.
Remember, a pitch deck is a selling tool. You’re trying to get someone to invest in your dream. Treat the pitch like that.
Don’t Copy a Winning Deck
I have a source who sends me awesome, winning pitch decks every once in a while (with permission and after the raise). They’re great, and I learn a lot from them. But I don’t ever copy them.
It’s fine to look at other pitch decks — many of them if you can — and extract qualities like cohesiveness, message, story, and information organization. But don’t copy any one model. Most investors will tell you: They can pick two companies they’re really excited about, and the pitch decks are markedly different.
Don’t Stare at a Blank Slide
This is like staring at a blank page and trying to write a novel. Or trying to build a house out of a giant lump of clay. Yes, you can get the shape right, but it’s going to suck. First you need a plan.
Always Start With an Outline
In this case, you need an outline, and you need to start the outline with sections. I usually start with three basic sections:
Background: This is what your startup is — in very few words — including your company position statement, your value proposition, and your mission if your mission statement isn’t just a bunch of fluff.
You’ll want to have a crisp explanation of the problem you’re solving, the scope of that problem, the market you’re addressing, and those market dynamics and trends that make the timing right for your solution. Then close this section with an overview of your solution as it relates to the problem.
Opportunity: Now that you’ve explained what you are and what problem you’re solving, you’ll introduce the opportunity, and that includes the following components:
- The team and their experience.
- Company progress to date.
- How you are uniquely positioned to address the growth vectors in the market you detailed in the previous section.
- Your solution, in detail.
- How your solution will grow and scale, including hinting at your B-story and C-story which are the plans you’re making for after you use up all the funds from this raise.
Investment: This is a deeper dive into the market and your addressable portion of it, a competitive analysis, your startup’s funding to date, and what you’re seeking in this round.
Then, your plans for the new funding, including how every penny of the investment will be spent bringing the solution you’ve described in the previous section to the market you’ve just detailed.
That requires a look at all your financials, including the economics of your business, your historical review, and your future forecasting models.
I can easily end up with five or six sections in a deck, because the business or the company or the raise might require additional breakdown of the story. But I always have these three. These are your foundation.
Start Your Investment Deck as an Explainer Deck
I see this all the time: Usually the first few slides are well-designed visuals, then the deck devolves into slide after slide of bulleted text that completely runs out of steam right at the most important moment, the ask for the money.
Here’s how to avoid that.
One of the best tools I’ve put in my toolbox recently is the concept of the explainer deck. This is three to six slides that explain my company, or my product, or a project, or a feature. If I can get complex information down to a handful of slides, I’ve got a pretty good chance at getting my point across.
Create your first explainer deck to describe your company and what it does, then put that away, pick another section or part of a section, and create an explainer deck for that. When you’ve neatly detailed all your sections, put them together and edit them so they connect the way you want them to, but try to keep the sections relatively interchangeable.
You’ll probably cut or combine a number of slides, but even if you don’t, you can create an appendix. You can swap slides or entire sections from the main deck to the appendix and vice-versa, depending on the investor you’re talking to and what you believe is most important to them.
That way you have all the information at your fingertips, but you don’t have to present it all at once. During the Q&A part of the pitch, you can call up a slide from the appendix that answers an investor question in a few seconds.
Update Your Deck After Every Pitch
Once you have your story straight, an outline that tells that story in a cohesive manner, and a deck that converts that story into something digestible, stick to the information that matters in investor meetings.
After every pitch, you’ll learn something new: Something that was harder to explain than it should have been, something that led to a conversation you weren’t prepared for, something you have at the top of the deck that no one really cares about.
You’ll make changes, you’ll reshuffle, and you’ll have a pitch deck that makes sense for every pitch you walk into.
