Top ranked sell side investment analyst turned angel investor shares thoughts on startups and early stage investing.
Monday, June 1, 2015
Startup Pitch Deck Advice
Startup Pitch Deck Advice
I have been working with several founders recently on their fund raising decks. Having had to do some intense thinking around the subject, what investor side advice to I have to share? For founders on this journey, here are three general sets of resources I have found helpful and seven personal observations.
Among others, the team at Nextview helpfully provides a pitch deck template. In fact they offer two: one a conversational format suitable for one or two people across the table and the other for a show before a larger group.
Seven Personal Observations
Sorry folks, there is no right answer
OK, so as a founder this is the last thing you want to hear, but there are as many perspectives on what makes a good pitch as there are other battle hardened founders, pitch coaches and investors. In other words, there is no single "correct"answer to the question: "How do I make my pitch deck perfect?". For the founder I think this is another case of "take advice, don't follow advice." Or, for history buffs, as Napoleon put it: "I do not allow myself to be governed by advice". So my own advice about advice in this context is: Don't blindly do what some so-called pitch expert says. Absorb inputs yes, calibrate what makes sense, yes, but ultimately, do what feels right for and that you are comfortable delivering.
Think about what the audience needs to know, not what you want to say
"Know your audience" is presenting 101. Always frame a pitch from the perspective of the investor. At its most basic, that means not spending too much time extolling your product and doing a demo. Demos are usually a bad idea, btw. The investor is not buying your product or service, the investor is (maybe!) buying your equity. That is not the same thing. And further to the "no right answer' point, there is no optimal deck because different investors need to know different things. So the more intel you have in advance about an investor's perspective or biases, the better. Then modify your delivery and move or add slides accordingly, tailoring the content to the audience.
Don't forget: you are pitching you, too
In my experience, investing is more emotional than most people realize or for that matter want to believe. As Kathleen Utecht, now at Core Innovation Capital, noted at an About Astia event in New York, getting to the next stage - "Great pitch, let's set up a follow-up meeting to dig into the details” - requires the investor to cross some psychological barriers in order to believe in you and trust you. This depends as much or more on the energy and conviction of your delivery as the content of your slides. Don't get me wrong, the slides do have to convince investors there there is abig market out there for your killer solution to an urgent problem and you can execute like heck to get there. It’s about achieving a balance of substance and self.
Think story and narrative arc
Humans react to stories, so make the presentation less a procession of facts and more a story. The most powerful piece can be your creation story. Tell why you are doing what you are doing, how your rock star founding team came together around a shared vision, and why you are so passionate about your company. It can be risky, but opening a pitch - after the one-liner intro that encapsulates what you are doing - with your creation story can be very impactful. It allows you to share why you care, the strength of your domain expertise, your team's complementary skills, and more. The creation story demonstrates the differentiated passion and energy that investors look for and helps you grab and keep their attention. Crucially, it can make you much more memorable. Memorable matters.
Pitch decks are always a work in progress, not static
Maybe there is no perfect pitch deck for all time, but there can be a better one than the last time. I think smart founders keep tweaking their decks, evolving them based on feedback and also a sense of what did and didn't resonate with investors at the last meeting.
Most decks are too busy
A slideshare I like that captures this idea and takes on the issue of "verbal vomit" among other things is: You Suck at PowerPoint.
When pitching to a large angel group or at a pitch competition, treat the event as a business development meeting.
You likely wouldn't make a non-investment ask if pitching one on one to a VC. But to a big group, in my view you can make an ask beyond money, "Does anyone here have a good contact on the XYZ team at ABC Corp?" On any first pitch, an angel group is statistically pretty unlikely to vote to continue to pursue an investment; they see so many. But individuals in the meeting may have great leads that they are willing to open up for you - the startup community is typically open to sharing contacts, even when an investor's wallet stays closed! So don't be totally tied to your deck and the single ask about money in this context!