Core concept: Minimize thinking required.
- Take investors through progressive discovery. Information overload early on is counter-productive, especially for pre-seed/seed stage companies.
- Compound edges. No one thing will separate you from others, but many small advantages compound quickly.
- Have to human to human conversations. Few deals will happen directly because of a deck.
Why play this dance?
Investors see hundreds of decks per year, and end up following patterns to be efficient. The easier you can make every step, the less "real thinking" work you require. Eventually, they certainly will think deeply about your company, but you should make it easy for them to get there.
Focus on headlines. Your deck should cover all the important pillars, but primarily should be telling a story. You should be able to read just the headlines over 30 seconds and get the idea. Expecting someone to read through everything initially, just to understand the company, places a lot of burden on them.
Consider the Biased VC Persona. People are attracted to people similar to them (read: people they understand). This doesn't mean you need to look like them. Rather, align your pitch to their mental model of how it should work. They want to see Team, Problem, Solution, Market, and Traction.
Photo by Clem Onojeghuo.
Stages of a pitch
Have an introduction that shows the 1-2 most interesting highlights of the business. This could be about traction, your team, etc. The goal is for the recipient to think “Interesting, tell me more.” Every company has a lot of complexities that can become distractions early on. You want to lead with your best self.
This blurb should be forwardable, so that people supporting you can help as easily as possible. Limit how much work they have to do; it's better to ask for something specific (“please forward this to one person who you think would be a good match”) instead of catch-all (“please forward this to your investor friends”). Perhaps counter-intuitively, you'll likely see better traction by asking for less and being specific.
Tell a story. This can be short (5-10 slides) and should cover all the areas that investors are used to seeing:
- Team: Does this team have the relevant skills to solve this problem?
- Problem: Succinct description of problem. Importantly, how did you arrive at this problem?
- Solution: Product/service. Include screen shots, testimonials, etc.
- Market: Sizing opportunity. Could there be a venture outcome? 1
- Traction: High-level sales, logos, partnerships, etc.
Remember, don't headline with these words. Your story should address these pillars. Below is an example of how this may work.
This is presented live, and is an opportunity for investors to get serious and get to know you. Your goal is to control the narrative. Here's a challenge: be prepared with material, but don't lead with a deck and instead steer towards a direct human conversation. It's far better to focus on each other than a presentation screen. By this point, they understand the big pillars of your company.
Grab bag of suggestions
- Got a strong team? First slide. You would win them over before anything else. This is the most important thing for pre-seed/seed.
- Relevant skills
- History: have you built companies or products together? Known each other for a long time? Marriages of convenience are bad — leading to founder breakups.
- Showing a history of hustle is good, and can replace credentials.
- How to explain complex product to non-technical investors? Assume generalist VCs aren't that intelligent in your market: they likely don't know it better than you. Don't lecture, make sure you're talking to the right person. Explain your company like they're 15 years old — solve for less sophistication.
- Profitability is sexy again. Unit economics matters!
- The more time a VC spends with you, via sunk costs, they'll want to get this done.
- Don't provide financials unless it's been solicited. At seed, it's a ridiculous concept. There will be pivots! Don't distract the conversation.
Example of telling a story
Here's an entirely made up series of headlines for an early stage company. Notice how it touches on all the areas investors expect, but telling a cohesive story.
- Every year, 32,000 babies die in their sleep from SIDS
- In the next year, 1.6m American parents will have their first child. And they are scared of SIDS.
- We've created a smart sock that monitors infants and notifies if anything happens.
- Last month we ran a Kickstarter, and got $42k in orders without starting manufacturing.
- 3 co-founders spent 10 years together building hi-tech wearables at Under Armor
The useful thing to focus on here is how the headlines themselves make the story. There's a clear problem, the market is defined, and here's a solution that we're qualified to build. The rest of the slide can provide supporting details.
Thanks Eric for putting this on. You can catch the recording here.
Investors open to “non-venture scale companies” is growing, but know your audience. Most angels and funds are indeed looking for venture outcome possibilities. ↩︎