My take after 6 months in venture and seeing hundreds of them
June 9, 2004, at 6:02 p.m. Jeff Bezos sent an e-mail to his team with the following subject line “No powerpoint presentations from now on at steam.”
The decision was made to avoid laundry list presentations that ppt makes so easy to create. Presentations that lack a narrative might be okay if you are here to present and create the narrative. But when you share your deck for the first time to get a meeting or a call, you are almost killing all your chances.
At DN we were reviewing between 60 and 100 propositions per week. This combined with the fact that a VC fund is constantly looking in details at 5 to 10 companies results in limited time per deck received. In order to help you get to the next stage I have decided to share with you what VC look for in a deck?
Going back to the basics of rhetoric
No need to read Aristotle, but a lot of great thinkers have put some thoughts on how to win the minds through discourse. There are five well known canons of rhetoric and three are relevant in the case of a pitch deck:
- Invention: developing and refining the reasons why we should meet
- Arrangement: organizing your arguments (the progression), i.e what is the most persuasive and logical order and what should be the narrative
- Style: traditionally it refers to figure of speech, in the case of a deck it has more to do with visualization, illustrations…
What VC want to see in your deck
The first slide should tell the name of the company, the round, how much you are raising and where it is located.
Your second slide should capture attention (Captatio benevolentiae in classical rhetoric) with what is the most impressive about your company: amazing growth, A+ team, a technological break-through or anything else you think is amazing about your start-up. Almost everything happens here, if you manage to attract the benevolence of your reader and get him excited, you are almost certain to get a call or a meeting.
Then the investor wants to understand what pain-point you are solving, or what opportunity you are enabling: are you building a must have or a cool to have?
The next logical slide is the size of the opportunity: how big can it be? The bigger the fund you contact, the larger the market must be (your business must be able to return the fund at scale). Avoid dropping a number you find on the space you operate in. Segment the market, isolate the addressable base and use your own pricing to get to a Total net revenues addressable market.
If the opportunity is big enough, a VC will then want to now why your start-up will be the winner or one of the winners: who do you compete with (for instance using diagrams, matrices, sentences) and explain why you are better. It is also key to explain why your business is defensible and how easily it can scale.
The opportunity is big and you have compelling arguments on why you will win the market, now show us the product: there isn’t one way to do so. Depending on what your company does it can be a video, diagrams showing a process, screen-shots, customer interviews… And if you are still very early stage, give them a sense of your roadmap.
This is one of the most important slide: go-to market strategy / the sequencing. There are different ways to get to the same audience or the same position. It can be selecting an initial niche and expanding from there, implementing an innovative business model (think Zenefits or Rent the runway for instance), using smart channels (for instance Tinder)… Show them that you have cracked the way to capture your market.
Now that they know everything on your market and how you plan to own it, explain how you are going to make money: what is your business model (except if already covered in the sizing or the go-to market strategy slides)
Eventually it is time for numbers, use the KPIs and data that are relevant to your business model and space you operate in (mobile, SaaS, enterprise, marketplace, E-commerce…) and show some curves.
If the team wasn’t your first slide, time to show why the team you have assembled is relevant to achieve the vision you presented. Your reader already has a good understanding of what you’re after and will more easily relate the different backgrounds to the the project.
Making sure that you have a narrative
Ideally your deck could be translated into a text that would look for instance like this:
“(Your company name) is based in (x). We are raising a (round and amount targeted). (slide 1). We have assembled an amazing team (slide 2), to address this major pain point (slide 3), that x million businesses face, resulting in a 1.4Bn market opportunity (slide 4). We are not alone in this space but we have built the strongest product. We enjoy network effect making our business defensible and we have automated x% of the process, making it scalable. (slide5). Here is the product we have assembled, our customer reviews are excellent and we plan to release this feature to increase stickiness in two months (slide 6). To capture this market we are first targeting this niche as we have strong relationships with several players and believe that we will easily expand to these adjacent segments from their (slide 7). We have chosen a subscription based business model with 3 different plans (slide 8). We already see great traction. Our current MRR is (x) and we are growing (x)% month-to-month. Our blended CAC is (x) and the monthly churn c. (x). Customers payback in (x)months with a CAC LTV ratio of (x)x. (slide 9)
If you have comments or questions, please share them. I am happy to help or enrich this post with your insights
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