This is the Pillar pitch deck to raise their seed round in 2019. Pillar is a mobile app that helps people manage their student loans. They aren’t in the refinancing business, so are not incentivized to drag out loan repayments to turn a profit (which no one loves!).
A bugbear I have is that founders read about large rounds and assume that it will be easy for them too. It’s important to know the background. Front raised their $35m series-b in 6 weeks and one might assume that doing so is easy. It took them 4 years of relationship building. Similarly (but not for as long), Pillar spend time getting to know investors. Michael Bloch the CEO said:
“We actually didn’t plan to fundraise at the time that we did. However, some VCs that we had gotten to know since starting Pillar made early offers to invest. We had gotten to know the team at Kleiner Perkins quite well over the last few months. They’ve made some amazing investments in fintech companies like Robinhood, Plaid, and Tally. We decided that we wanted them on board as the lead for our round.”
Don’t let the facts get in the way of a good story. There’s likely truth in what Michael said, but I know it’s only part of the story. Learning for you is to always rewrite history to how you want it in the press. Everyone loves a story, so tell them the best version of yours.
Pillar, founded in 2018, is a mobile app that helps people manage their student loans. Millions of Americans struggle to figure out how to pay back their loans the right way. Doing it wrong often costs them thousands of extra dollars in interest. Pillar manages the repayment process for them, which enables them to get out of debt faster and save.
They raised $5.5m in their seed from 10 investors and it was led by Kleiner Perkins. The angel investors included some top naemes including: Adam Nash, the former CEO of Wealthfront and an Acorns board member; Noah Weiss, the former senior vice president of product at Foursquare; Misha Esipov, the CEO and cofounder of Nova Credit; and Robinhood’s head of growth, Patrick Kavanagh, and head of finance, Nadia Asoyan.
Pillar pitch deck review summary
They do a pretty good job in general. There aren’t many specifics but I get a positive vibe from the company. I would take a meeting with them. Appearance wise, the deck is polished. The words used in it are considered. They know the buzz words that investors want to hear- I really assume they know what they are doing, or they have had help.
Some of their slides are quite smart and not qhat you normally see. For a seed stage company, they seem to have a lot considered. Knowing a lot of founders and the shite they get up to, I bet they don’t have a product and know a lot less than they claim. But, they tell a good story, and in the Bay Area, that is what counts. Hey, they closed a solid seed round.
Structured summary review of the Pillar pitch deck
The amount of words per slide is solid. There is enough to get their point across. Their choice of words is also considered.
At 15 slides, the length is ok but a little on the short end. It is a seed stage deck and I doubt they have achieved much so they are telling a story. Less is often more in that case. The more you write, the more opportunity you have to raise questions.
They tell a coherent story throughout the deck that follows slide by slide. This is a very sold best practice. I’m staider in how I present headers, but what they have done is acceptable. Communicating a story on each slide is the most important thing to do, especially in the preparation of writing a deck.
The deck is designed just right. I don’t like fancy design as it detracts from communication. The design is simple and orientated around communication. I like it.
Everyone loves a good story. They do a great job at taking you slide by slide through the deck.
Things are aligned well. There is negative space. For the content they have, it’s good. I don’t really have anything negative to say.
They cover most of the key slides, but not all. There is nothing on timing, defensibility, I don’t exactly understand how they make money, I don’t understand how they will expand (more relevant for later stage companies) and I don’t know how much money they are raising and what they will spend it on.
Slide by slide review
The cover slide is fine. I would prefer a slightly smaller font for the statement, but I can’t help but nitpick. I always think about the ease of communication over anything else.
This slide combines my usual ‘one sentence explanation slide‘ which explains what a startup does in a sentence (or three). One could make the explanation a little more detailed but it’s solid.
Note there is no page number on the first slide. That’s how you should format page numbers. You don’t put them on the cover and on interstitial and closing slides (Never use interstitial slides in a short deck for pitching!).
Pillar includes little slide headers to salute what the slide is about. That is not needed. I believe that is because most people read the Sequoia outline or the Airbnb pitch deck and thing they are meant to. Firstly, the Sequoia outline is a list of things to cover and not a guide. The Airbnb founders were totally clueless when they raised their seed (Read for fun! Private Airbnb email on how a VC missed out on a unicorn).
This slide is not a problem slide. It’s what I term as an industry introduction slide, or an industry market slide. I often have two market sizing slides in a pitch deck. The one at the starts gets investors to accept that this industry is indeed large enough to care about- the second one explains those numbers in terms of making money.
In this slide, the founders are using the T-word – trillion. Who doesn’t love a shitty trillion dollar industry? You can’t really go wrong if you do a half-decent job. They should have a $ sign with the debt value.
Adding the number of people adds context to how many people there are. They then add that this big industry is still growing- and 9% is really, really solid!
There are no sources, however, so you might accept the premise briefly, but investors would go and check the veracity of the statements. Add sources. An investor may not check them, but it shows vigour that you 1/ have them and 2/ are smart enough to add them.
To add sources, you want to write “Source:” then where it came from. I use size 8 font and often make it a dark shade of grey… and generally in italics. I don’t want to detract from the core messaging, but I still want to make sources easy enough to be noticeable and read if one so chooses. This is the kind of thing a banker would do by default. I can add some more details but I don’t know if you care 😉 If you do, let me know in the comments and I will write a blog for you.
This is the first actual problem slide. The core point is managing debt is a pain in the ass. They don’t quantify the pain, but they allude to the three reasons it is a pain and provide three quotes to support it. Three is a great number. Read: Rule of three to understand why- it’s not a long blog but it is a really fab learning to apply for the rest of your life.
I don’t like quotes. They are the poor man’s proof. Charts with a trend are best. Everything non-data related is a sliding slope to ‘eh’. I bet ya there is no data to support a lot of this. In which case, don’t waste a week looking.
Whilst there is no real data on the slide, it feels fairly compelling. The format of it gives an impression of it being considered.
I hate pointless pictures. Save it for marketing material. I always want you to prove anything you say. Some chick with purple hair is not proof.
The deck flows and has a narrative slide to slide which is very positive though. This is the key things founders always get wrong.
The next three slides are product slides. They generally talk in terms of benefits and not just features (that is good).
“Pillar helps users manage their student loans”. This might seem to obvious as a founder writing a deck, but you need to be far more obvious and spoon-feed investors more than you think is reasonable. Over spoon-feed! Ensure they get it. If you don’t spell things out, investors will think for themselves. Thinking is bad. Tell them what to think.
They do a good job at explaining the product at each step. The structure is also right:
- Bold header which makes the point in a few words. You don’t have to read the subtext to understand. This is structured communication
- The subtext is less highlighted and is optional reading for investors if they choose to read more. When you structure information in this manner it is more likely that investors will
Note how short the text is. This really is an optimal amount of text.
In terms of design, one of the best formatting tips you can learn to design slides is to add shadows to boxes. I do this all the time. Like always. No joke. Shadows on boxes rock.
Here is another product slide. They sell the next benefit. This is what users actually care about and why they will use the product which helps them ‘manage their debt’- they save money. Mic drop.
Read the boxes. The text is smart. ‘Recommendations…’ and ‘we do the math for them’. They are alluding to the fact the founders really think about the product and the user. I sense behavioural design. I feel like they understand their consumer and what is best for them, even if they don’t know what is best for themselves. But that is the point of a great product – the thinking is done for you, whilst giving you the perception of choice.
Investors love to invest in product-focused founders. I get the feeling these founders are before I even know what their background is. I quite like this deck. It’s not mind-blowing, but I get a positive feeling that the founders are smart. It’s kinda hard to explain.
‘Confidence int heir financial future’ sounds a little hippy, but when you note the boxes (more box shadows!) you again notice that everything in the product is considered. They understand human psychology. The allusion to achievement and milestones to ‘maintain momentum’ makes me feel they think about mitigating churn.
Mentioning ‘voice and tone’ implies they think about their brand. Using human language ‘rather than the jargon of the industry’ makes me feel like they have studied their competition. I feel the words they use are very considered.
Everyone needs a competition slide in their deck. You have to. And yes… you ALWAYS have competition. Inertia is competition.
There are two ways that I deal with the competition slide:
- Landscape: This is the go-to for everyone. You pick two axes (these are really important to get right) and then map companies in the four boxes with their logo. Sometimes you add boxes and add some context
- Matrix: This is what Pillar have opted for. When you don’t have direct competition, or you are innovating, making a landscape doesn’t make sense. What you want to do instead is list out the groups of competitors and the variables to differentiate. I’ll explain out of this bullet now
If you have a lot of competitors you want to group them. If you only have a few you can declare each one. If there are more competitors than variables then switch the axis. I normally put the competition on the x-axis.
Be judicious with the variables on the y-axis. Don’t pick lame ass shite like ‘Android app’. You lose credibility It feels like you are purposefully picking variables selectively. I actually recommend picking variables where you suck because you are not focused on them. It’s totally cool to say your competitors are way better than you at something… if that is not the niche you are not focused on. I don’t want to see you are the best at everything as you can’t be. Showing weakness ironically makes you more believable.
Ok, ‘personalised’… What the feck does that mean? It sounds lame.
Interesting. I haven’t seen that before. They highlight the competition in pink when they are the same. I like that.
Company focus is a funny one. They position their competition as sales organisations and themselves as a tech company. The implication is they sell themselves on the merits of the product. My bet is they are going to have a go-to-market based on viral loops and shite. Good for them. Spending money on marketing is for losers if you can build it into the product.
Virality is compounding on steroids. It FECKING INSANE if you really understand it. If you want to learn about virality read this and get the free Excel model.
A lot of big companies were engineered to create growth virality. Virality is inherently an engineering phenomenon. And to be clear, almost no company truly was ever viral or for a sustained period of time. Dropbox and Uber had great invitation mechanics. BranchOut had brief virality, but ‘jumped the shark’ as their product didn’t hit the mark. Draw Something is a good example of virality. I tried to get numbers from the founder, but he wouldn’t share with me.
Finally, let me make the point that you want to keep the variables on the y-axis as low as you can. They have 4 here which is solid. 5 is always a good number. A lot of the time people have about 8. That’s a bit much, though maybe the right number. You just need to be conscious of information overload.
How they make money is solid. The key number is $5.
The assumptions is that they will get 2m people which is 4% of the market. At the start, they mentioned there are 44m people with student loans. 4% is a good number.
Investors hate “we just need 1% of China…”. Large firms like Sequoia say “Why the feck do you want 1%? Why not 20%?” They think larger. Never use 1%.
For SaaS companies, the magic ARR number is $100m. If you have a 10x on revenue then you hit unicorn land. Their 4% gets them above the magic number.
They are starting to add boxes at the bottom. This is something McKinsey does. They are adding a takeaway. “At 2m users… 4% of the student loan market”. I do this on each and every slide that I write for clients in the subheader. The header tells the story, the sub-header explains the slide.
The slide is basic but solid. I do a more advanced version of this is something I invented called ‘range of values’. It’s basically the same thing but gives you 10 variables so you can have a discussion of where the business goes if you do ok or if you crush it.
How you get customers is important. It’s something a lot of founders do rather poorly. Scalable acquisition channels are the magic words investors want to hear. Their channels would be a lot more credible if there were key metrics like CAC, LTV and CAC/LTV etc.
These aren’t really scaleable channels from what I can see. They are small since this is a seed round. Social and shite you can do when you are hustling but aren’t necessarily going to work at scale. Also, not that CAC increases as you scale- it doesn’t decrease.
Their bold takeaway is they are going to get more free users… prove it…!
This is an interesting slide. You don’t often see it. It requires founders to actually think about the future. And honestly… so founders have thought about this! I always ask what you want to sell for and I can’t remember the last time there was an immediate and clear answer.
The first thing I notice about this as an investor is the $150m number. I think “OK, they think they can be, say a $1.5b company?”. That’s what they are gunning for if things work out. Then I want context. They think they are going to get there in about 3 years. I call bullshite here. This is very unlikely.
They are building an app in 2019. They are only launching publicly in the year-end (assuming things actually go to plan which they never ever do).
Next, they are going to market. They drop some VC jargon of LTV being greater than CAC (You are fecked if it is not…). $6m revenue in the first year? It’s punchy, but if they grow like weeds it’s possible.
5x revenue to $30m is unlikely. You overestimate what you achieve in the short term and underestimate what you achieve in the long term. Contribution positive means they are going to be profitable on user acquisition ex the operations of the startup. Hm. How many public companies do you know that have positive anything metrics?
Expansion phase in 3 years is hopeful. They want to manufacture their own products which I presume will have higher margins. God knows how that is going to work and the cost. $150m in three years is really hopeful.
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Yay time. They want to save borrowers $12b. Hm. $12b is a big number. They haven’t mentioned once how they actually help them save money?
They seem to cover all the boxes you want in a team, but who the hell are they? I would prefer 3-5 people and some bullets on why they are special?
The point of the slide is to demonstrate they are the best possible team in the world to solve this problem.
OK… They have a bunch of logos on the next slide to say the team worked at these companies. Great, there are famous companies but that doesn’t mean anything. They could be secretaries there for all I know.
This is a lame ending slide. It’s a logo… How does this sell? If it doesn’t sell, delete it.
Would you invest in Pillar after reading the Pillar pitch deck? Why not?
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