Tl;dr: Understand what investors want to learn from your pitch deck when you start a fundraising process.
Pitch deck thinking course outline
You are now on part four of the pitch deck thinking course.
- What pitch material do you need?
- What is a good deck?
- The importance of narrative
- What are the key questions investors will want to get from your deck?
- How to approach writing decks
- The flick test
- Who do you trust with the pitch deck? Can I have an NDA?
- How do you know if your deck is good?
- How to send your deck to investors
- Formatting your deck
- 25 tips
If you can’t face them all at once, you can join the course and get these sent straight to your mailbox here:
Key questions investors need answering from your deck
Your deck is a sales deck. The dynamic is this simple:
- You want money
- Investor need to know why they should give it to you
- …The investor needs to know if they should even spend any time figuring out if they should give you money
You’re now an investor
VC is sort of simple. Let’s ‘play a game‘ (only no death machines). I find people get smarter when you put them in situations where they need to game up.
You’re now a Partner at a big VC. No more startup bs for you. You have $200m to blow over three years. You need to return $600m of capital…. There is always a catch. You are now under insane pressure. Sure, everyone wants to talk to you and Techcrunch even asks for quotes… only everyone wants to talk to you.
You now have 30+ random founders spamming you EVERY single day. At the start, it seems fun, but soon… 30 pitches a day. FML. Try reading 30 of these decks now. There are about 150, so 5 days worth: Pitch Deck Collection
Lost the will to live yet? Well, this is your life now.
And 1, 2, 3 wake up. You’re hustling and poor again.
What did you learn from the experience? Reading decks can be really painful.
Next question, when filtering decks do you have this urge to want to find the key info you need to make a quick decision of ‘Is hotdog’, I mean ‘Meet founder, or not?’
Yes, you want to filter fast and get to the pub!
So what do you want to know?
The key things you want to know as a pretend investor
Invest in time, they aren’t making any more of it.
I could easily have written this for you myself, but frankly work is over-rated. I also know you want to learn from smarter people than me 😉
Tom Tunguz, a VC at Redpoint (and my fav nerdy blogger) wrote this list of stuff he wants to be answered in a pitch deck, so here you go:
- [Value prop] What is the problem and is it worth solving? Why is now the right time to solve it?
- [Team] Does the team have the vision and the wherewithal to build this company?
- [Go to market] What is the competitive angle (competitive barrier to entry and/or go-to-market) that will enable this company to succeed where others have tried and failed?
- [Sales effectiveness & product validation] Who does the startup sell to? Which customers have used the product and how have they received it? How much is each customer worth?
- [Product distribution] How does the company acquire customers cost-effectively? What are the unit economics (customer acquisition cost, contribution revenue, and churn rates)?
- [Revenue model] Does the company have the revenue model to build a big (>$100M annual revenue) business with good margins (gross ~ 50 to 60% / net ~15 to 25%) under reasonable assumptions?
- [Market size] Can the market enable or bear a $100M revenue Alternatively, is this product in a quickly growing market or riding a disruptive wave?
“Other risks including legal risks, technology development risks, value chain implications and so on may also be important. But when building a generic fund-raising deck, answering these questions in your pitch deck will serve as a solid starting point. It’s important to unite these points with a single theme or story to sell the dream.”
I think Tom made a pretty good list. So now when you are drafting your pitch deck, you need to critically think about your current business model and plans, and figure out if you can meet these criteria. If so, awesome! You are VC fundable!
Now you need to figure out how to communicate that you meet these expectations. These need to be answered in your deck. If you haven’t done it already and have a deck, start again.
That’s that. The next installment is here: How to approach writing decks
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