The Sequoia capital business plan template has been viewed by hundreds of thousands of startup founders that are preparing their pitch deck.
It started as a simple blog post that some smart cookie turned into a very simple series of slides. Sometimes the best things in life are super simple.
Now yes, Sequoia are a big deal and yes they know what they are talking about but no… you’re not going to learn a massive amount when it comes to what to actually write and the narrative you want to tell. This is, however, a nice quick read for you to start building a framework upon which to build you frame of reference
The back story on the Sequoia capital business plan template
So what is the back story with the pitch deck template? In Sequoia’s words:
When Brian, Joe and Nate founded Airbnb, they had an air mattress, entrepreneurial passion, and a vision for reinventing travel and hospitality, but no clear idea how to approach VCs or how to craft a pitch deck.
They came across Sequoia’s guide for how to write a business plan and the rest is history. They made a great deck.
But it wasn’t really the slides we liked—it was their ideas, the clarity of their thinking, and the scope of their ambition. We love partnering with founders hell-bent on bringing an idea to life that conventional wisdom deems impossible. And we love to partner early— when an idea is newly formed and has the maximal room to grow.
So they shared their guide to pitching (with a few refinements from years of use).
Investors have a short attention span
Investors will give you the most attention at the start of your pitch.
A rookie mistake is to assume that if you have scheduled an hour-long meeting, you will get an hour of attention. #fail
The typical attention span in an hour-long meeting will follow this curve most of the time.
Understand this when you think about the order and priority of the information you want to communicate to venture capitalists.
You have five minutes to earn attention for the rest of the meeting. If you can’t get them thinking ‘Ok, this might be interesting’ they may even call an end to the meeting and say ‘come back when you have more traction.’ Founders LOVE hearing that. Not.
For the love of god, make sure in the first few minutes investors are crystal clear what you actually do! It’s crazy how many founders forget to actually do that. You know your business- everyone else does not!
- Company Purpose
- Why Now
- Market Size
- Business Model
Start here: define your company in a single declarative sentence. This is harder than it looks. It’s easy to get caught up listing features instead of communicating your mission.
I personally like using and x for y (Just don’t use Uber!) and then a simple explanation.
‘Visions’ might work in America, but in most places investors might think it is naff. Invetors would prefer to know the insight you identified and how you are proving that out.
Describe the pain of your customer. How is this addressed today and why the current offerings are totally inadequate.
The bigger the pain point the better!
Be very clear about the problem you are solving:
- For consumer concepts, talk about user needs (You need to market to them)
- For enterprise ideas, show a detailed understanding of your customer’s pain (you need to be an industry expert)
If you cannot convince an investor there’s something deeply broke, they will not be interested in what your solution is to the problem. You might have a solution looking for a problem… in which case, come back later.
There are a lot of manners to approach describing the solution. Some of the things you can address include:
- What was your eureka moment?
- Why is your value prop unique and compelling?
- Why will it endure? Is there a competitive moat build in such as network effects?
- And where does it go from here? How big can this get?
You need to figure out the key points that really communicate the big value here.
The best companies almost always have a clear why now? What happened in the industry to bring your industry to being at the perfect time for you to act on it?
Nature hates a vacuum—so why hasn’t your solution been built before now? There are often good reasons for this.
Can this be really big? How big is the market?
You have two ways to size the market:
- Top down
- Bottom up
And some sizing jargon you can use is:
This is how I present it in the pitch deck template you can get.
You need to identify your customer and your market clearly. Have an avatar in your head.
‘If we just get 1% of the market‘ is naive. In fact, some of the best companies invent their own markets (think Airbnb).
If it’s a new market, the best way to tackle this is to explain how many users or customers there are for the product/service, how this number grows over time, and how much each of these users/customers is worth (this last part is a chance to cover pricing/revenue model).
If it’s a replacement market, for example where software is automating an existing service, then explain how big the existing market is today and how much you expect your solution to shrink it, through lower prices. You can read about shrinking a market and owning it here.
One thing not to do is to put up huge numbers from a market study such as Gartner or Forrester and not add any details behind them. Airbnb does this in their deck, albeit simply.
If you cannot prove you have a large market you will not get very far. Here is why.
EVERYONE has competitors. Inertia is always an option.
Who are your direct and indirect competitors? Typically these are mapped out in an x/y axis.
The best is to add some commentary, or at least show that you have a plan to win by talking to the slide.
Better to identify all the competitors than have the investors discover them afterwards. That way, you can proactively explain how you are different. You want to control the discussion and not undermine your credibility.
Especially for early stage where you don’t have a lot of numbers you really want to give a demo.
My recommendation is not to do this live, but to pre-record the demo. DO NOT record your voice. Talk to the video. Otherwise, why didn’t you just send them a link to watch when they want? You can also pause the video and add extra comments on the fly and answer specific questions. You never know if wifi breaks etc.
It’s not possible every time (e.g. for infrastructure software), but whenever you can, a demo is worth a thousand words. Failing that, screenshots and the workflow to bring the solution alive.
So how do you actually make money?
How you address this slide depends on your business model and the stage you are at (maybe you aren’t clear on pricing yet?).
If you have many ways to make money, don’t talk about them all! Pick one main method. It’s almost always:
- Ads (Ergh…)
Ideally you can add metrics here around critical areas including CAC and LTV.
By this point, if the investor is interested, they will want to know about the team, so it’s worth spending a couple of minutes on the founders’ backgrounds, highlighting any special talents or experiences that make them well-suited to building the business.
Team is critical. Everything else is sort of pointless with out the team to execute on it. Here is a guide so you know what an investible founding team looks like.
I disagree with the Sequoia Capital pitch deck template format here though. If your team is amazing, you want to put it up front. It adds credibility to everything you say.
If you are sending satellites to space, I like to know first that you worked at NASA.
If you don’t know… here is the real reason founders are not funded (that doesn’t get talked about).
I would put advisors at the bottom and very small. Most people think advisors are BS and your friend who agreed to get involved for the sole purpose of the deck. You can add credibility by saying they actually invested. That makes it real, even if it is a small amount.
I typically don’t include financials in a pitch deck, at least nothing like a P&L. What I focus on instead are your metrics and adding growth charts.
You can mention high level MRR/ARR numbers and the like depending on your business model.
It’s easy to lose yourself in the numbers. Sequoia suggest keeping it simple and just showing on a timeline how you would spend the money (e.g., headcount) to achieve specific milestones (e.g., launching the service). I however recommend making a source and use slide which shows what you are raising, how you are going to spend it, and the key milestones you will achieve with it and your defined runway.
There we go. What do you think of the Sequoia Capital Pitch Deck Template? Let me know in the comments and we can discuss them.
Looking for more interesting reads?
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- Fundraising financial questions: What venture capital startup interview questions will be asked
- Fundraising sales questions: What venture capital startup interview questions will be asked
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