A very honest guide to writing your fundraise pitch deck
Getting the detail of the deck right
How to optimise yours for success
Hello, my name is Phoebe and I spend a lot of my time looking and thinking about fundraising pitch decks. That’s partly due to my job — I’m an early-stage venture capital investor at Supernode Global — and partly because I am slightly obsessive in weird ways.
I’ve accumulated a lot of notes on the subject and finally decided to write them up in this mini-series. This article is Part II: here we’re going to get down and dirty with the specifics of a pitch deck. If you missed the earlier instalment, then you can find it here. Part I focuses on the context in which investors read your deck and is a useful pre-emptor to this.
For this piece, I’ve focused on disseminating what I see as the most meaningful slides in a pitch deck. Most decks roughly follow the structure set out below but you shouldn’t be afraid to amend as you need in order to tell a compelling story.
So — to begin at the beginning.
The document title
I know, I know, it seems simplistic but hear me out. This point was flagged to me by another investor as a common issue they see before they’ve even opened a deck.
Consider this: an investor receives a deck called Company X_Seed _January 2022 in, say, April. The January date on the deck implies that the company has been raising since then. This can be a red flag depending on how far you’ve progressed with your raise. The investor knows you’ve been raising for a few months — if you’re yet to secure any commitments by the time they receive it then this may be taken as a signal that the raise is not going well.
So, don’t make the mistake of prejudicing the investor against your company before they’ve even looked at the deck. Keep the title simple: it should include your company name and the raise (e.g. Seed) and not much else. You’re better off staying neutral and avoiding any negative preconceptions.
Shoutout to Kathy Gromotka for this pertinent tip.
Vision + Mission
What do you want your company to become and how will your company achieve this?
Here’s the rub: early-stage investors expect to work with a portfolio company for many years, so being aligned on the long-term ambition is crucial to a successful partnership.
The thing to remember is that investors are in this job because they are interested in the future, in technology, in innovation. They want to get excited about your vision. Internally, at Supernode Global (in a phrase I unfortunately dislike) this is called the ‘giggle factor’, when you get really caught up in the excitement for a company. Play to your crowd and don’t miss out on this opportunity to stoke the imagination of potential investors.
the other thing to consider here is the size of your vision. To reach venture scale and to carry you through the ten or so years that this typically takes, you need a large ambition that is big enough, hungry enough to build a massive company. Don’t shy away.
What problem are you solving and for whom are you solving this?
Whilst some problems are easy to understand and universal, I would hazard that most problems that start-ups are tackling need a bit of context to convince a newbie to the subject (like an investor), of just how urgent and important they are.
Not all problems are created equal and not all problems are obvious. The more niche the industry, user, and customer, the more you have to set out the details, the data, and the issue at hand to convince investors that this is a large, real, problem that someone will pay money to resolve. But more than this — that everyone involved in this new concept actively wants.
If the investor doesn’t believe in the problem, then they won’t believe in the solution.
Market size or size of the problem
In short: the bigger, the better.
VCs want to invest in the next unicorn and a market needs to be several billion to support a company to grow to this size. To give you some context, under $8 billion is on the smaller side. In a market that size, a new company would need to capture over 12.5% of the market to reach unicorn status. That is a large market share to be aiming for. However, in a market like mobile gaming, which is ~$85 billion, it’s a much smaller percentage that needs to be captured.
If you are playing in a smaller market, then being able to show that it is growing fast is crucial, as this offers the possibility that by the time your company is starting to peak, the market will be a more respectable size.
If you can’t show that it’s easy very large or growing very quickly, then I’m afraid you’re probably not a good match for VC funding, as it’ll be almost impossible to make the required returns.
When you are putting together your market sizing, it’s always better to be specific. This slide should demonstrate your understanding of the space and inspire confidence, not concern.
Things that inspire concern?
- Huge, vague numbers.
- Top-down TAM calculations referencing some generic figures.
- One of those nested circle chart things referencing some EY or Deloitte study from 2015.
Still unsure? This is a good video on the different ways that investors see market sizing (not from me).
How are you going to solve the problem that you set out earlier?
This should be articulated in terms of
- what the end impact is e.g., we reduce food waste by 50% for our customers
- what the product is to do this e.g., we’ve built revolutionary inventory software for small food businesses.
This is a really important place to cut down on jargon. If the investor cannot understand what you do then they are unlikely to see the value in it. A really good solution slide should feel like a call and respond to the earlier problem statement; it should directly echo the earlier slide in terms of the language you use, phrasing, imagery etc. This creates a sense of completion within your story, the sense that this is a much-needed solution.
One thing to flag here, however, is that any solution should rely on the people most motivated to make a change for success. Let me explain further:
Company A thinks that music streaming is broken for artists. Therefore, they are building a new platform that better remunerates said-artists and improves the industry dynamics. Users will be able to support independent artists via this new platform.
What this lacks (in many but not all cases) is a reason for the users to use the new platform. The above is a real problem but the solution assumes that a bunch of people not really affected by it will switch over out of the goodness of their hearts, not something the human race is famed for. Call me a philistine but, as a listener, Spotify is doing quite a good job for my needs.
The solution will only work if there are strong incentives for the hypothetical customer base to act. Make sure your solution is aligned with their needs,
I’ve said it many times and I will say it again. The most common missing piece of information in pitch decks is simply explaining ‘what the product is’ in simple terms and how it works.
It is astonishing how often this is overlooked. So. Many. Times.
I put it down to the product being so obvious in the founders’ eyes that they cannot fathom a world without it. Whatever the reason, it makes it difficult for an investor to get excited about your company, much less tell the rest of their team about it, if they don’t know what the product looks like and how it works. Only a day or so ago, I had to email a founder and ask what exactly their product was because it was completely missing from the deck,
Details I would aim to include:
- How does it materialise e.g. is it an app, online platform, or software?
- How do I use it e.g. Is it accessed via an API? Is it a simple log-on? Do I buy it from a store?
- A couple of images that show what it looks like to use e.g. screenshots or your Figma files.
Go have a cold, hard look at how you describe your product. Is there truly enough information here that someone, who has never heard of your company before, could accurately describe it after reading? Because that is the bar for this slide.
When people ask me what I think is important at Seed stage, traction will always be something I talk about. It demonstrates you are making progress. Investors are looking for growth patterns: early indicators that give them confidence that you will continue or even accelerate your growth, and traction is one of the best indicators out there.
If you can demonstrate this progress at Seed then that’s a great start as it indicates you are moving towards product/market fit — the holy grail.
There are a few types of traction in my mind:
- Ultimately, revenue is the best type because it shows people are willing to pay for your product. This is pretty compelling evidence.
- However, some B2C companies require building a large consumer base before they can monetise (e.g. social media companies). Here, early traction is best illustrated via user growth and related metrics such as MAUs, DAUs, engagement levels, retention etc.
- If you are pre-product launch, then there are other ways to demonstrate progress. If you have tested your product, then sharing the data, engagement, or feedback that you’ve seen in your beta and the like is a good option.
- Alternatively, if you are launched but have yet to snag a paying customer, then showing what you have in place in regards to pilots or a healthy sales pipeline communicates that customers are interested in your concept — even if they are yet to commit financially.
- If you are before all of this, then I would look at internal milestones as a way of communicating momentum within the business. Can you show that you are moving quickly and iterating?
Regardless of the stage — Pre-seed, Seed, Series A onwards — an investor is ultimately making a financial decision. That’s their job. They need to find companies that they believe will make them lots of money. To do this, in most cases, the start-up itself has to make a lot of money.
That all said, in the earlier stages, a forecast is almost always wrong. It’s nigh impossible to accurately say how your growth will play out. So, this presents a bit of a conundrum. How to approach it in a sensible way?
Some advice and thoughts on this — for early stage in particular.
- Revenue is king, particularly MRR. Focus on how you see this growing and don’t worry too much about showing a really detailed breakdown e.g. EBITA. Yes, you should have a more detailed model that includes this information but for the sake of the deck, focus on revenue.
- Beyond this, I would also include the other key metric that drives revenue/growth overall. So, for example, B2C companies might show MAUs growth; a marketplace might also include GMV.
- I would recommend at least a 3-year horizon of how you expect to grow. I know (again) that it’s never going to be correct but it communicates a better idea of how any network effects or the like take hold in the future.
- In my view, there is a fine line to tread between realistic and ambitious here. An investor will be turned off if they don’t think that the company can grow quickly enough; getting to $4m ARR in 5 years’ time is not a venture growth curve. However, ridiculously high forecasts will inevitably undermine credibility.
- In general, investors are more interested in evaluating the assumptions that underpin your calculations rather than the exact numbers. Are they sensible? How did you get to X conclusion?
- Personally, I like a graph to convey this information, as charmingly demonstrated below.
Forecasting is truly an art and a science.
I know there are mixed views on this but I am not a fan of the infamous competition matrix:
In theory, it’s fine. It shows what differentiates you from your competitors.
Yet, in practice, it’s almost always poorly applied. In most cases I see, the focus is on specific features that are meaningless in a competitive context. For example, comparing whether different companies have ‘AI assessment process’ or ‘responsive UX’. And I’m always kinda like, ‘who cares?’.
Because competition is all about what differentiates you in the eyes of your customer and you rarely get a customer who says things like ‘wow, Phoebe, I just really like Company A because of their streamlined product selection process’.
No. Your customer says things like ‘it’s cheaper’ or ‘it’s a better product’ or, if you’re me, ‘I like the really easy returns process and the fact that the returns sticker fits perfectly over the original one, so you don’t have to scribble on the old one before you send it back, in case someone thinks you’re re-posting it to yourself’ (shout out to Net-a-Porter for perfect sticker sizes).
So, the question you have to answer here: why do your customers pick you over the competition? Express this in the simplest language possible — aka how customers would explain — and you’ll nail this slide.
Why you? A good team slide demonstrates why your team is well-suited for accomplishing the task at hand: what is it about your motley crew that lends special insight, experience, and skills to build this company and make it a success?
Typical tropes that are used for this slide:
- Logos of previous employers — The idea here is to indicate that you have relevant experience that will help tackle this problem. Alternatively, this can be used to illustrate that someone is ‘top talent’ e.g., they are a previous FAANG hire, and so will be an asset to the team.
- Relevant degrees or qualifications — This is mainly for tech roles. For example, if you are a deep tech company, having people with PhDs in the right areas builds trust that you can build the stuff you say you can. I personally studied English Literature and Language, which is irrelevant to 99% of startups and jobs. Yay.
- Previous start-up experience — Start-ups are a different beast and it can be really useful to have team members who have done it before, in particular at high growth companies.
- Exits — Investors love this. If you can do it once, then you can do it again.
Do note that this is more Seed / Pre-seed focused. By the time you get to Series A, I would expect this slide to look a bit more like an organisational structure, rather than pinpointing the skills and experience of everyone in the team.
This should be a simple one.
- How much are you raising (including the currency please. FX is a real thing)?
- What do you plan to do with the money?
- What will you achieve with this? (e.g. we’ll get to 1m MAUs).
- How much runway will this give you until you need to raise again?
More general concepts to check off…
Aside from the core slides that are noted above, investors also looking to get to grips with certain characteristics of your company and take a view on them. Depending on the business, these could be communicated in various places throughout your deck. I’m not prescriptive on where they occur but I would ensure that they are conveyed somewhere.
- How is your company defensible? There are many different ways of doing this but whatever yours is, it should mean that you maintain your USP when others try to copy you. Perhaps you are building a deep-tech product and the team you’ve assembled is incredibly difficult to replicate. Perhaps you’ve built a moat via unique access to data. Perhaps your industry relationships are unique and hard to build. Whatever this is, let investors know somewhere in the document.
- Why is now the right time? Timing can be everything for a start-up; this TED talk argues that it’s one of the biggest factors in success overall. Give an investor confidence that the tailwinds are in your favour.
- How will this funding round provide an inflexion point that will make your company a rocket ship? In my view, each raise should notably accelerate a company’s growth. Make sure you cover somewhere how exactly this funding round will do that for you.
- What has to be true for this company to get to $100m ARR? I’ve said it before and I’ll say it again: investors are making a financial decision here. I love it when companies map out what it will take for them to get to massive revenue, in terms of their business model and market. Break it down to make it simple for your potential investor. See the example below for inspiration:
There we have it. While none of this is a silver bullet, hopefully, some of these tips and thoughts will help you refine and shape your pitch deck to take it to the next level.
If you have any questions, comments, or glowing feedback then ping me at firstname.lastname@example.org.