Here’s the thing about pitch decks. On the one hand, they’re so easy to create — slides, pictures, bullet points — a trained chimp could do it. On the other hand, you don’t score points from investors simply for getting the format correct. Your pitch deck’s content matters; it has to be exciting enough so that investors give you money.
The content of your pitch deck will depend on the stage of your startup. What you need to know is that every round of funding needs a new pitch deck.
Why is that? Because your company is evolving as it grows.
It’s changing so much that it’s almost like you’re running a new company with each funding round. Think about it. Since your last round, you’ve probably hired key people, changed your product’s features, changed how you deliver it, changed the pricing strategy, market strategy, the website and maybe… maybe… even the kind of beer kept in the company fridge!
OK, so that’s the first thing. New round of funding = new pitch deck. Your old slides are old news. We’ll get to the content requirements for each round in a minute. But before that, l have to mention a few items that apply to all pitch decks, regardless of stage.
Know your audience
Your pitch deck has to speak to specific investors without deviating from the official story line. Do some recon work on the audience ahead of time. Take mental notes each time you present. Learn as you go. If you find one slide confuses or bores audience members, drop it. Replace the slide — if necessary — with one that’s clearer, more vivid and urgent. A single friction-causing slide could send you home empty-handed.
No wasted pitches
Practice presenting your offer with your team. Don’t “practice” with real-life investors. Instead, do it in front of the mirror, on video or in an unsuspecting department store, flashmob style. The point is to hone your presentation until a) it’s magnetic and b) you could run through it on autopilot.
You will serve as the narrator of the pitch deck. Taken together, it’s an interactive story. So watch your body language while presenting, don’t rush the deck, and come prepared with answers to any questions.
Pesky definitions of rounds
OK, here we go. In today’s overheated market, funding rounds have loose definitions. Basically, it all comes down to who is doing the investing, how much money they’re putting up, and when they’re doing it in the life of the startup. Angel investor David Rose says, “An investment ’round’ is simply a set of one or more investments made into a particular company, by one or more investors on essentially similar terms, and at essentially the same time.”
Here are the most common funding rounds explained and the appropriate deck for accompanying them:
Pass the Hat Round — this is the friends and family round; 98% of all startups go through it. Put it another way, any (unknown) founder who doesn’t raid his or her bank account and then hit up friends and family for money in the beginning will get the evil eye in later rounds. You gotta put your money where your mouth is.
Naturally, if you grew up in a po’ family on the wrong side of the tracks or still hang out with your loser friends from high school, then you probably can’t rely on personal connections. But if that’s not the case, and your Madre has money, she probably won’t ask to see a 20-slide deck before making an investment decision. That’s probably the case for Uncle Bill and Aunt Sally too, but be prepared with a pitch deck anyway.
Accompanying pitch deck – Highlight the dream. Get them excited about it. What you’re trying to convey is the problem you see, the opportunity that exists, and why you’re the person to solve the problem. At this point, you might have an MVP or not and in all likelihood don’t have any KPIs or metrics to report.
Seed Round — the first “real” round, once you’ve tapped out your personal network. It’s also called an angel round because the money ($250K — $3 Million) comes from — get this — angels. Angels are wealthy accredited individuals or pools of investors (angel funds). Funding in the seed stage can also come from incubators, accelerators, local governments programs and crowdfunding.
Angel investors are a diverse lot; you’ve got the Angel of Death… Angel of the Morning… Snow Angels… etc. Some investors favor the angel role because they’re teachers at heart and enjoy mentoring young entrepreneurs. Personal chemistry matters to them. Other angels are more passive, investing strictly for the potential payoff downstream.
You’re trading equity now. They give you money, you give them partial ownership in your company.
Accompanying pitch deck: although you have a product to show, this pitch deck is still idea-driven. It has to excite. You have to define the problem/opportunity, why it matters, and why you’re the one to solve it. You should have some users or customers by now. The data you are collecting from them should demonstrate traction, with one or two metrics trending in the right direction. You may not have any revenue yet, but you’re heading there. You should know exactly what the money you’re asking for will be spent on. Remember, the stronger the case you make for yourself, the less equity you’ll have to give up.
- Market Opportunity
Series A — the first institutional round of funding. That means you’re presenting to venture capitalist (VC) firms and trying to raise between $1 and $10 million dollars. Venture capitalists are looking for high growth companies with deep traction (e.g., GitHub, WayFair).
Accompanying pitch deck: your deck answers the money questions — or investment thesis — first. Revenue and growth matter more than anything else. You also explain your marketing strategy and showcase how new money will help you scale up. Yes, your story still matters, but much less than it did in earlier rounds. VCs make decisions based on your product’s defensibility, market penetration, and network effect.
- Business Model
- Growth Rate
Series B — the second round of institutional funding. Venture capitalists want to see growth, preferably hypergrowth. You have a better chance of getting a check if your growth is outpacing projections from the last round (e.g., Groupon, Amazon).
Accompanying pitch deck: as Biggie put it back in the day, “Mo’ money, Mo’ problems.” You can’t hide anything in your deck at this point, so if there is a weakness or vulnerability, address it head on. The majority of Series B decks are data-driven, showing key metrics. Rarely at this stage could a company collect millions of dollars on a concept-drive pitch deck (but it did happen to the team at LinkedIn).
- Growth Rate
Series C — the third round of institutional funding and yes, Series C have become common. Your ask will be in the tens of millions of dollars. At this point, you’re probably asking for a cash infusion from prior investors. You have to show them how their initial investment has paid off thus far and why they’d be FOOLS to stop feeding the fire!
Accompanying pitch deck: think BIG. Growth — Winning the Race — Top Dog — Winner Take All — Inevitable Household Name — Numero Uno — Breakout. If you’ve gotten to Series C quickly, make that fact a key part of the deck. Show what you did with Series B funds and how more money will help you carry on until you’ve achieved world domination.
- Growth Rate
- Spend Rate
Series D, E, F — in the past, startups never got to this stage. They didn’t have to. They’d either go public (IPO) or get acquired. Today, companies can raise more from private sources than they could on the stock market, turning the funding game into alphabet soup.
Accompanying pitch deck: your deck has to show quantum growth, the right metrics, and how you’ve become the #1 player in your space. You want to show investors that it’s not TOO LATE to get on board and ride the gravy train of your awesomeness! You’re heading for an exit in the next two years, and they can help make it a success.
- Growth Rate
- Exit Strategy
Raising money is never an end to itself. It’s a necessity to get you where you’re going. The money you raise from each round, giving you a 12 – 24 month runway, needs to be spent wisely: product, process, and people.
Investor money will transform your startup in ways you never imagined. That’s usually a good thing! If you’re smart and insightful, you’ll document those changes and use them to predict the company’s future.
The changing story line of your company necessitates new slides. And that, my friend, is the reason why every funding round needs a new pitch deck.
Whaddya think? Is reusing a slide in your pitch deck ever acceptable? Talk to us @newhaircutco.