Fortunately They’re Really Simple To Fix!
You might think my job is about saying “yes” to founders, but statistically it’s *actually* about saying “no,” given we typically see 3,000+ companies annually in order to make 10–12 investments. Despite the volume, each opportunity to hear or read more about someone’s idea is a privilege and I try to treat it respectfully, despite not being able to spend meaningful time on the majority of inbound we receive. Hopefully every startup finds the right investors!
Some entrepreneurs are born salespeople, others find it more awkward but ultimately realize getting comfortable pitching — to investors, to the team, to potential employees, and so on — is part of the job. And without this talent, the risk unintentionally lowering the probability of building the success they desire.
The deck you send to an investor is often the first opportunity you have to tell your startup’s story, and there’s lots of great material out there on what a deck should do. But there’s fewer posts on the classic, and repeated, mistakes people make in these summaries. Here are three of them, which I believe will make most VCs lean towards the “PASS” button…
- Don’t Put an Exit Slide in a Seed Deck (or any deck before growth round IMO)
I see these most often when entrepreneurs come from regions/cultures where tech startups are still new, or the investors they’ve been pitching are more traditional non-venture groups. But as a venture investor, I hate it. So much so that I wrote an entire post earlier on this topic alone. Here’s the most salient portion from that essay:
Why don’t I like to see “exit” slides in seed decks:
Narrows Thinking: Usually conceived based on what company is today, not what it can be
Speak of the Devil & He Will Won’t Appear: Often talks of different acquirers and market comps. Companies don’t get sold, they get bought so just go and build a big business. By ID’ing potential acquirers too early one may obsess over their market moves, etc.
Tell Me How You’ll Create Value, Not Just Realize It: Build a big profitable business. If you can do that (which is hard enough), I guarantee you there will be exit opportunities. Don’t try to reverse engineer.
Suggests Risk Aversion: Makes me wonder whether entrepreneur is looking for quick cash out rather than wanting a venture partner for a longterm company.
2. Focus on Milestones You’ll Use This Funding Round to Achieve, Not Just Time It Buys You
18–24 months. 18–24 months. 18–24 months. That’s what I see most often on fundraise slides. But companies don’t earn rounds based on how long they’ve been working since the last fundraise! They get more capital because they’re learning, growing, achieving. Tell me what you’re going to accomplish with my dollars as the headline. Then support this with how long you think it’ll take and why this capital is 100–125% of what you’ll need to get there.
3. Founder/Team Bios Which Feel Deceptive
Nice pictures of happy looking cofounders. With a bunch of education and corporate logos underneath. First and biggest are GOOGLE! HARVARD! Then I go to LinkedIn and see you have eight years of work experience, of which Google was a summer internship in operations team while you were in grad school. And Harvard was a two week executive ed course. And I wonder why you are playing these games with me, when I rather hear about where you actually worked or why you decided to study philosophy at a perfectly fine state university (or skipped college all-together).
Look, I get it, you’re trying to draft off the social proof of some credentialing, hoping that it at least gets you in the door, and fearing that without these logos, you won’t be able to permeate the notoriously homogenous (but changing!) faces of venture capital. But I truly believe you’re doing more harm than good when you push away your real lived experiences for what you think I want to see. At best, you’re going to get the investors you deserve (bad ones who care mostly about status), and at worst, you’re going signal lack of self-confidence, when we should be building mutual understanding and trust.
As with all advice, Your Mileage Might Vary. There are lots of different investor mindsets and preferences in what they fund. Don’t listen to me if this doesn’t ring true to you. But after thousands, and thousands, of decks, these are three slides that distract me and if I’m making quick judgment calls whether to lean in or not, cause me to pause.
Best of luck!