Investment Process: Pitch Deck

Securing venture capital investment is a significant milestone in any startup’s journey.

A critical aspect of the fundraising process is the initial introduction email and the pitch deck that is attached.

At Square Peg, our ethos is to invest in unique founders solving a real and significant problem, in a differentiated way. When we read your material, this is what we’re looking for evidence of.

Like any piece of communication, your deck has one job: to get you a meeting. This is the litmus test.

Telling the story of your company in a concise and compelling way is difficult – you need to strike a balance between enough detail to convey meaning and potential, but not so much detail that it requires a huge investment of time to read it.  

Every company is unique, but there are common elements that will help you do this well. Below is this outline of what to include in your pitch deck.

Thank you to Chris from Vero and Nathan and Michael from Athena Home for allowing us to share slides from their original pitch decks.

Problem

• Explain it simply, and at a high-level in a sentence or two.
• Next, detail the way this directly impacts your customer, their customer or the world – help us understand what the pain points are and who they’re felt by.
• Convince your reader of the size, pain and magnitude of the problem.
• Example: Chris Hexton from Vero 2017

Solution

• Explain it simply, and at a high-level in a sentence or two.
• Detail the way this directly improves the experience for your customer, their customer or the world.
• Convince your reader of the delight, ease or cost-savings of your solution.
• If you think it helps, include a screenshot of the product so people can visualize it.
• Example: Chris Hexton from Vero 2017

Timing

• What will happen or is happening that convinces you that now is the time for your solution?
• Outline who your main competitors are and explain the landscape. We like you to think broadly about your competitor set. Who are they (and are there others that could move into the space)? What are they focused on? Why is your framing of the problem better? Do you serve the same customers? Do you win customers from your competitors? Are they a realistic threat? Are they well-funded? How would your customers describe them?
• How should an investor frame the obstacles to success in their mind?
• What are the barriers to entry, and if you’re a first mover why this is advantageous?
• This is your opportunity to demonstrate that you deeply you understand the market in which you operate.

Team

• Reframe this part as explaining your personal right to win.
• What evidence do you have that you and your team has the experience, skills and passion to build a billion-dollar company?
• Be explicit and honest.
• Example from Athena Home Loans 2018

Traction

• Using your core business metrics, show that you have evidence that your hypothesis is correct: your solution is solving the problem.
• Help us to understand how you think about the drivers of your business.
• Avoid vanity metrics or half-truths.

Ask

• How much are you raising?
• What will you do with the money? We don’t obsess over financials, but we do like to know what your burn is now and what you project it to be post-raise.

What not to include

The goal of any deck is to get you a meeting, including slides that reduce the chances of this happening are antithetical to your goal.

Exit options

• It is important for you to have an informed view of the way your industry develops.
• However, if you create real value, exit opportunities will litter your desk. Your goal is to build a billion-dollar business… you’ll need to say “no, thank you” on your way to success.

Your valuation

• There are industry standards that are useful for you to know.
• However, at this stage of the process, you’re communicating your passion for the vision and the potential of your team. Focus on this.

An NDA

• It’s a VC’s role to meet founders and learn about companies.
• No one will sign your NDA.  

Complex Financial projections

• If you’re ship-shape, we don’t mind this included, but know, we are unlikely to make a decision to meet you based on this information.

Jargon or buzzwords

• This is our pet peeve. Unless you are genuinely building a blockchain-enabled, deep-learning AI, these words aren’t for you.

Over-designed slides

• Aim for clarity and don’t be a toner thief.

How to get feedback

Send this to people you think are smart and capable but not experts in your field. Ask if they understand why and what you’re doing. They should be able to explain in a sentence what you do (and who your product is for), and if they can’t, consider whether you’ve assumed knowledge that you shouldn’t have.

Ask directly what they don’t understand after reading your deck. Iterate based on this feedback. If they know what you do, why it’s exciting and where you’re up to today, you’re on the right track!

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