A Very Honest Guide to Writing Your Fundraise Pitch Deck
A Behind-The-Scenes Look at How Investors Receive Your Pitch Deck
How to optimise yours for success
Congratulations! You’ve started a company, assembled a super squad of founders, and built out the MVP of your product. It’s going pretty well, and you think it’s the right time to speed up your growth by raising some money. You know you need a pitch deck to do this and so fire up your slide software of choice and crack your knuckles, ready to wow.
Hold up.
As with any good piece of content, knowing and understanding your audience is crucial to crafting a message that truly resonates.
In this first part of A very honest guide to writing a pitch deck, I’ve outlined key context that I often see misunderstood or misplaced as I look at pitch decks.
I’m an investor at Supernode Global, an early-stage VC fund based in London. The thoughts and views that I share here come from looking at thousands of pitch decks over the years — reviewing them is a massive part of my day-to-day job. I quickly realised that much of the feedback covered the same big topics and the same common errors.
Hopefully, this guide will help you skip some of these mishaps and increase your chance of securing that all-important investment.
Know your raise: the different stages of ‘early-stage’ funding
There are different types of raises, and each one has its own set of expectations. In short, the earlier a raise in a company’s lifecycle, the riskier a company is to an investor. There is generally less evidence that it will succeed. As a result, the validation is lower.
I often see pitch decks positioning themselves as a Seed raise but realistically are at Pre-Seed. That’s fair enough — it’s the first time a company has generally raised from institutional investors, or at all in some cases, and the founders haven’t yet become familiar with the terms.
(Also, the phrase ‘Pre-Seed’ is really a bastardisation. The term Seed comes from the concept of ‘seeding’ a business, i.e., the very first stage of growth. You can’t technically have a pre-stage to the first stage, but here we are, and I won’t bore you with the reasons why).
That said, it’s important to get it right.
It sounds pedantic, but the names for different rounds are short-hand for how much you are raising and what rough point of development you’ve achieved. Most funds invest in specific stages and don’t deviate from this, as their fund economics, diligence processes, and decision-making are set up to make investments in these rounds. They might occasionally go out outside of these areas, but it’s a much harder sell.
Getting the terminology right means you’re more likely to connect with appropriate investors. Conversely, getting introductions to the wrong investors is a waste of your time, and time is a precious resource in a startup.
Ok, so the general sequence goes as follows:
- Pre-Seed
- Seed
- Series A
- Series B, C, etc
For the purpose of this piece, I’ll focus on the difference between the earliest rounds.
Pre-Seed
These rounds are normally anything under $750k. Most companies will fund them with a mixture of people they know (aka friends and family), angel investors and pre-seed institutional investors. Companies at this stage generally are pre-launch, pre-revenue but often have an MVP or Beta of the product.
There is quite a bit of variation at this very nascent point: if you’ve just started and only have an idea and a sketch, then raising $50k to get you going sounds about right. If you’re in beta and have built the product then you’re more likely to be speaking to funds and angels for a $500k round.
In the UK, the EIS / SEIS tax schemes (where investors can often recoup 30% to 50% of their investment) have provided significant incentives to angel investing, and I believe, have increased the number of individual investors at this stage. I would absolutely recommend this for UK companies, as well as looking at what grants are available. Innovate UK is a good example but there are lots more across the globe.
The other funding and support options to consider in this space are accelerators and incubators. Generally, these work in three ways:
- The accelerator takes a percentage of equity and, in return, ‘pays’ you via the operational support, resources, advice etc., that their programme provides.
- The accelerator takes a percentage of equity and, in return, pays you both in funding (i.e., you get $50k) AND via the operational support, resources, advice etc., that their programme provides.
- You pay the accelerator a fee, and in return, they give you the operational support, resources, advice etc., that their programme provides.
Different accelerators are good at doing different things so I would advise you to research thoroughly to ensure you are a good fit for what they are providing.
Seed
Generally, Seed rounds are between $1m to $4m, although there have been a lot of large raises recently, so both rounds and valuations are rising rapidly.
From what I see (our fund invests primarily at Seed stage), there are a few norms for companies at this stage:
- Product: The product has been launched and may have been in the market several months.
- Traction: B2C companies can demonstrate user growth, engagement, solid retention. B2B companies often have won their first few clients or contracts and will have early revenue.
- Team: The founders have made their first couple of hires.
- Product/market fit: Not quite at PMF but they are closing in fast.
This doesn’t apply to every company — this is more an average of what we see. For example, a deep-tech company, for example, requires much more fundraising and development time than other companies and so may be raising a Seed but not have a product close to getting in market. Use this as a guideline but not a rigid rulebook.
Know your audience: how investors read your deck
As with any product, any bit of comms, any writing — understanding your audience is integral to creating a successful product. In this case, our product is the pitch deck, and the audience is institutional investors (i.e., some of this will not apply for angel investors). Before you embark on the endless quest for perfection that is writing a pitch deck, consider these honest admissions from an investor herself.
Caveat: these are generalisations as per my experience and — in some cases — per my preferences. It will not be the case for everyone but it will be the case for many.
An investor has around 10 minutes for that first assessment
Investors see hundreds, if not thousands, of pitch decks each year. As a result, they need to balance seeing as many companies as possible with only spending significant time on those that are relevant and exciting (to them).
The core truth to consider is that there is not enough time in the day to speak with every company looking for investment. There is often not that much time in the day to read every pitch deck you receive, alongside all the other parts of the role, so it must be managed.
Investors will generally review pitch decks before agreeing to do a call or meet a company to ensure it meets their basic criteria. Why? Reviewing a pitch deck takes 5–10 minutes, and a pitch takes 20 minutes of email scheduling and 30–60 minutes on the day. I appreciate that many founders prefer to pitch, but most investors simply don’t have enough time in the day (literally) to offer pitch calls to even half of the applications they receive, and so they need a way to sift it through quickly. It’s annoying, but this is the reality.
So, how do you tailor your deck for these conditions?
- Write your deck as a ‘read only’: your deck needs to be able to communicate all important information by itself. Do not expect that you will be able to talk them through it. If something requires a voice-over, then you need to make it clearer because you won’t be able to give that additional commentary. You will eventually need both a read-only version and a separate pitch version; the latter for when you score that pitch invitation -hurray!
- Keep it a sensible length: Your average investor will assign around 5–10 minutes to read your deck, so make sure this is possible within that timeframe. Be smart with how you share information and aim for no more than 20 slides.
- Don’t rely on links: Maybe this is me, but I am really unlikely to click on that link in your deck on the first pass: I won’t click and read the useful background document that provides must-have context; I won’t click and watch your 8-minute product video. Don’t rely on these to make your case — they are fine as extra information, but the case shouldn’t depend on them.
- Avoid teasers and one-pagers: Some people like to send out teaser decks and one-pagers to ‘entice’ investors into wanting to know more. I dislike this approach because it feels like a waste of time (why send half the information when you could send it all?). There is such a thing as being too short and sweet. However, I have heard other investors say they like them, so take this with a pinch of salt.
- I have NEVER heard an investor say, “I don’t like getting a normal, full-sized deck,” so at the very least, you know doing this won’t be polarising…
Investors are *probably* not experts in your industry
We investors are notorious for thinking we are the expert in your area and offering unsolicited, perhaps not always helpful, advice (never me, of course). Well, I can only apologise on this and so grit your teeth and read on.
There’s a nuance here: while there are low odds that they have direct experience in your industry or category, investors are experts in fundraising and assessing different businesses. As a result, we are quick to understand different revenue models, organisational structures and use our knowledge of similar companies to draw conclusions. The difference is important.
So, what does this mean for you?
- Explain everything and assume nothing: Set the context for your industry. Ensure that you explain important dynamics and benchmarks that are relevant to your business. Is the supply chain notoriously difficult? Then tell me. Is the norm not to charge for certain services? Tell me. Without this information then it’s likely that your value proposition will not shine through as much.
- Avoid jargon: The easier to understand, the more likely that an investor really engages with the concept. Use everyday language where possible and if there are specific terms, metrics, or acronyms that are industry-specific, then be sure to explain them.
Investors (at funds) work in teams
Typically, when a startup reaches out to a fund, they’ll be assessed (see the 10-minute review above) by one person. If this first assessment is successful and the two parties have a chat, then they normally continue that relationship with one or two people from the investing team.
However, the decision to move forward and eventually invest is unlikely to only require the approval of that single person. Some funds operate in a way that a partner can greenlight certain investments but more often than not, the preference, or requirement, is to have the wider team in agreement and actively excited about your company.
You’re selling once — to the individual investor — but then they are selling to the wider team, and you’re not going to be there to answer questions.
So, how can you help them sell on your behalf?
- Test your messaging: The individual investor needs to be able to explain why your company is great to the rest of their team. Make it easy for them to understand your company and industry. I would test your messaging with friends and family to ensure it’s clear enough. The litmus test is that they can explain back to you why the company is exciting after they’ve read it.
- Make it easy to share: A small point but one I’ve seen go wrong before. To sell to the rest of the team, investors need to be able to share the deck. Make this easy! If you send your deck as an attachment, it should not be over 3MB. It certainly should not be over 200MB, which has happened to me at least three times… If you choose to use a link, then DocSend is a classic, but there are plenty of options, including GDrive, DropBox, etc.
Hopefully, this helps you understand the context in which your deck will be received, read, and reviewed, and you can make the most of the circumstances to excel.
Good luck!
If you have any questions or comments then feel free to contact me on phoebe@supernodeglobal.com.
