At various levels of involvement, I’ve either personally pitched, assisted as an executive, consultant, or friend with over a dozen companies in raising money. Not every group is successful, but I’ve had my hands in the pot at various levels of involvement to the tune of $30 to $40 million of capital exchanged. In the last few years, I came to realize companies (CEOs) tend to spend way too much time worrying about “the deck.”
Worrying about the deck can come in a variety of forms, but the companies who fail to raise often confuse the deck with the story. The pitch deck isn’t the key to unlocking capital–just as no other single factor is the key. It all works together. The pitch deck is a visual aid, perhaps a guide for the story, but it’s the story and the fundamentals that matter–no amount of tweaking a graphic, re-ordering the slides, polishing the slides, animation, or other attributes will suddenly close the funding.
The worst offenders bring in outside consultants to refine the deck. From time to time, I’ve even been that consultant–and the founders who refuse to rehearse the presentation, the founders who can’t organize and execute on a plan… well, these are the ones who don’t raise.
When it comes to raising capital for computer businesses, my experience has yielded a few conclusions:
- For most investors, your business has to tie into some fundamental shift in the market or thesis that the investor you are pitching already believes in before you walk in the door. Raising money for an early stage company is a search for these investors; it’s not a sale. (I’m pretty sure someone else said that, but I can’t find the citation.)
- As an early stage company, you need a credible story that reflects how you will exploit this shift–how will you find the customers who are changing, how will you service their pain with your solution, and what gives you an edge.
- Different proof points are necessary for your stage of progress, and part of that is tied to how much capital you’ve burned already and the age of the company, regardless of what you’re calling the raise (Seed, Series A, Series B).
The deck needs to be clear and look professional–but just as important, the story needs to be coherent and make sense. You’re going to have to rehearse it, a lot.
The deck is a living document; you should be editing it slightly after every pitch. What was confusing? What didn’t flow well? Whoever is actually pitching needs to be involved and driving the deck changes–it cannot be outsourced to someone else.
Finally, even if you’re an army of one, you need to bring someone with you to your pitch. Never pitch alone. It’s very difficult to note on what’s working and what’s not when you’re the one talking. Over and over, I’ve witnessed a confused audience and the speaker is oblivious–you need someone who can jump in and help when things slide a bit off (without contracting what was just said; see Kawasaki’s book for notes on this). Of course, I’ve said my share of nonsense that a cofounder had to adjust based on the reaction in the room.