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The Pitch Deck

From time to time, I work with very young companies – often just a couple of founders, an idea for a business and perhaps a working demo.  As a seed investor and venture advisor, I look to work with companies that intersect three distinct sets of characteristics:

 

  • I really like the people
  • I really like what they are doing
  • I think it can be a big opportunity

For those in the intersect, one of the first tasks is often to help them raise the initial funding for the company and so we start a discussion about the Pitch Deck – the presentation that is used to get initial investors involved with the company.  Putting a decent pitch deck together needs some considerable thought and often, a lot of discussion about the why, what and how of the company.  You can find a number of different thoughts about this presentation on the web sites of some VCs – here's my take on what to include and some of thinking that underlies the presentation:

The pitch deck – no more than 15 slides that lays out the opportunity in a compelling way.  There is no formula here but you have to cover the following material – throughout the deck, think graphics, graphics, graphics and not text – that way you can be SURE you will NEVER read the slides out loud:

  • 3 slides to set up the opportunity – I call this the "set the hook" phase.  You want to get the undivided attention of a very busy person and not have them fiddle with their BlackBerry for the next 30 minutes (or worse, yawn and look bored).  In this section you need to cover the size and scope of the market and position why THIS IS A COMPELLING OPPORTUNITY!!!  Be as specific as possible with numeric data not just anecdotes and make sure you attribute the source(s) of the data you use to show the size of the market.
  • 3 slides that show how you are going after the opportunity.  What's the secret sauce that makes you different and how it's going to help you succeed?  Be specific in terms of why and how this provides a compelling experience to the customer and the benefits the customer derives from your company.
  • This is a good place to have a demonstration of what you have developed – a picture may tell a thousand words but a demo tells 1024!
  • 1-2 slides that cover the competition.  EVERY company has competition – it may not be head-on but who else is out there, what have they done and how you are different.  If you must have the obligatory 4-quadrant competition framework, make it concrete and quantifiable – everyone expects you to be at the top right corner anyway.  Be creative, extra points for coming up with a non-4 quadrant way of segmenting the market and the competition.
  • 2 to 3 slides that describe your go-to-market strategy.  This is a good place to show a timeline of what you plan to accomplish and include any phasing of functionality, alpha/beta plans etc.  The final slide of this section should show how the company makes money from its customer.  In combination, this section should lay out when and how you get into sales and how the company plans to sell to its customer.
  • Financials – you should cover expenses and revenues and take it out 18-24 months in detail by quarter and then have the 3rd year shown in one column.  Don't get carried away with precision (there isn't any!) and remember – the financial model is a way to show how you think about the business.  You can only say two things about it otherwise – it's wrong and it's wrong in the wrong direction!  What it really shows is how you are *thinking* about spending the funds you raise and lets the prospective investor have a peek into your thinking.  You need a spreadsheet to back this up for later.
  • Summary slide; remember the compelling start?  Remind the prospect of why this is a compelling opportunity, *briefly* re-state your vision for the company and close with how much money you want to raise.

Notes:

  1. Didn't have a team slide?  You are going to start the meeting by introducing yourselves and giving a brief summary of your backgrounds, how and why you came together to do this.  No need to repeat in the presentation unless you have an extended team of key people not present at the meeting.
  2. Don't (please!) use the word conservative – especially not in conjunction with "these financials are based on conservative assumptions" – everyone says it but how can you know????  Better to state your assumptions explicitly.
  3. The purpose of this meeting is to get the NEXT meeting!

Comments

John Roper

Great post. Thanks for being clear, direct and precise. Too many people are very vague about what works in a pitch and for those of us who build things (and not sell things) for a living, this is a great help.

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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