How to create a pitch deck from the mindset of the venture capitalist?

Always start with the audience in mind when creating a pitch deck. So you should understand the mindset of a venture capitalist. Having been in that role a couple years back, I wanted to offer four elements of a pitch deck that you probably haven’t considered but that are fundamental for venture capitalists.

1. Timing

You, as a founder, should understand that most venture capitalists are way overstretched with their time. I kill myself trying to meet with as many people as possible, so when I do have downtime, it is either late at night when no one is calling me or as soon as I wake up in the morning. This is the time that we read your pitch decks. We are all very busy folks so try to think of the timing portion from the VC’s angle.

2. Presentation

If the deck is beautiful, I am instantly happier reading it and therefore have a psychological bias of goodwill towards it, regardless of what the actual pitch is. If the information is easier to consume and not blocks of words, I am more inclined to read more of it. But if you send me a deck that is bright red with blocks of words and that is the first thing that I see in the morning, I am just angry at you. There is no reason to start off on the wrong foot when you’re pitching.

3. Length

If you are raising anything below a Series A, don’t send a venture capitalist more than 15 slides. A very detailed deck will cause the VC to weigh the importance of whether I actually need to dive through it. You have already communicated to me that you seem unsure of what you’re doing and that you haven’t been able to simplify your message. If you can’t do it for me, what makes me believe you can do it for a customer?

4. Goal

As a late-stage accelerator, we need about a 1% acceptance rate to get to our preferred 15 portfolio companies. We run two cohorts of 15 each a year. This means I see at least 3,000 pitch decks a year — a ludicrous number. Your goal is to get in front of me with my full, undivided attention. VCs do not fund you because they read a deck, they fund you because of what you have to sell in person. Your deck is a tool to get you in the door and selling in person.

Taken together, you should understand that a deck you send out should be: easy to digest, not blinding with visuals, elegant, not overwhelming with a million words per slide and, lastly, a tool to lock in a meeting.

A deck that looks like this gives the VC the ability to scan it quickly but still comprehend what you are doing. I cannot tell you how many times I get to the fourth slide of a pitch deck and I have no idea what the company is or what they are doing. When it is in this format, it gives me the ability to pick and choose which pieces of information I want to consume.

If I want to dive deeper into one of their problems or benefits I can, efficiently and on my terms. Now for the content of the slides:

• Intro slide: Venture name and a one-liner about the business.

• Problem: Describe the pain that the customer is feeling. I want to know that this is a big problem that causes a lot of pain. Your goal is to get me to agree that there is a problem that can be solved with an extremely high growth company. This needs to be crystal-clear for me to understand.

• Solution: How are you solving it? What is your value proposition? The less complicated, the better.

• Business model: How do you make money? Yes, as a startup you need revenue. Advertising is not a good strategy. You’ll need around one million people on your service for that to work. Who is going to fund you until you get to that point?

• Go-to-market strategy: Personally, I believe this is one of the most critical pieces of the deck. I don’t like seeing that you’re going to use all of our money on advertising and use social media to get the word out. That is a lazy way to think through this. Who are your channel partners? Who can be a champion for you to build a recurring loop of business? I want an intrinsic and well thought-out plan that you can go execute.

• Traction and highlights: Show me the money. What is your monthly recurring revenue? What is your annual revenue? Have you won any awards? Do you have partnerships with big names?

• Metrics: What is your customer acquisition cost, the lifetime value of a customer, your margins, etc.? I want all relevant information associated with your numbers. If you don’t have them because the startup is too early in its life cycle, you should have estimates based on competitors or others in your sector.

• Competitors: Who are you competing against? No, we are not looking for Amazon, Google or Facebook. I want to know who in your space has raised money and is possibly on a similar track as you.

• Competitive Advantage: Why are you better? What is your special sauce that no one can compete with?

• Market Size: This is simple — total available market, serviceable available market, serviceable obtainable market. If you’re looking for venture capital money, it needs to be big.

• Team: Who are you, what are your backgrounds and why are you the people to execute on this solution?

• Capital: The ask. How much money are you raising, and for what purpose?

Ultimately, the most important thing you can do is to think like an investor when you’re proofreading your pitch deck. Make it beautiful, stick to your point, and use it as a tool to secure a meeting. The presentation says who you are. Spelling mistakes says that you are not a very detailed person, which makes the VC worried about handing their money over to you. Too many details says that you might be someone who isn’t focus. Balance is key.

Check out my related post: What is an automatic customer?

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