In my current role helping African startups raise funds I have been on the recipient side of too many outdated, disorganised, poorly made decks and I’m here to tell you that in most cases you might as well not send anything.
This is not as bad as it sounds. To be honest, raising funds is not for everyone and the reality is that many companies would be better off bootstrapping. However, if you decide to embark on the path of raising funds you need to realise that it is not a distraction. As Gigi Levy-Weiss from NFX puts it:
Fundraising is your biggest mission critical task.
Fundraising is supposed to be tough, because capital is limited and only so many startups can get a share. The system is designed to filter the best ideas and teams and that includes testing your resilience and ability to sell your product and yourself.
So why does the deck matter so much? Put yourself in the shoes of investors. They are bombarded daily with decks that they need to assess in addition to many other tasks. So unless you come recommended by someone they really trust or you have amazing traction, you’ll be lucky to get 5 minutes of their attention (it has actually been argued that it’s 3:44 minutes).
The truth is that if your deck is unclear and badly formatted, investors will probably not read more than two slides.
And why would they? Think about it. There is an oversupply of promising startups that despite the Founders’ flashy degrees and exciting ideas in huge markets, are very likely to fail. Any startup will face all sorts of challenges, ranging from ever changing regulations, poor product market fit, fickle customer tastes, strong competitors, you name it. In a rapidly changing world, a team that can execute and adapt quickly to changes and setbacks is more likely to do well. And the best initial indicator that the founding team has good product skills and will be able to execute is -you guessed it- the pitch deck.
Let me put it in another way. Would you go to a networking event wearing ragged clothes? Would you not prepare a clear sales pitch before approaching a large prospective client? You do that because you want to convey an image of ability and exude trust.
Since the deck might be the first time the investor is hearing about you, why would it be any different? You need to provide a good first impression and you achieve that by having a clear structure, being concise and making sure the deck is well formatted and free of mistakes.
While spending a lot of time on a deck sounds tedious, sending a poorly made deck gives the impression that you don’t know what you are doing, you are a poor executor and you are either not serious or lazy.
Let me be clear, I’m not suggesting that the deck should have an amazing design — although it helps. If you take a look at the initial decks of now large companies such as AirBnB, Square or Facebook (see some here), you’ll see that the design is quite basic. However, their decks have a logic structure, provide relevant data points and are well formatted.
So, if you want to get meetings with investors you need to make a deck to impress. These are my key overall suggestions:
Think of a long(ish) elevator pitch and add the key details that will pique the investor’s curiosity. 10–12 slides should be enough and then add a couple more in an annex only if need be.
Remember, investors ask for slides not a business plan because they want a very high level summary. Therefore, don’t use the slides as smaller size pages where you can write an essay. The slides should have a few short bullet points summarising the key ideas and ideally have some visual aids such as charts, graphs, pictures, mock ups of the product, etc.
This is arguably the most important aspect. In fact, this section is so important I’ll make individual posts deep diving into some of the points, but here is a high level summary of what you want to include:
Make sure that someone that doesn’t know much about your sector can understand it immediately. Even if you are sending it to a very specialised audience, it’s preferable to not overcomplicate the deck or use unnecessary jargon.
First impressions matter, make sure you don’t have typos, the figures are up to date, add up and are consistent throughout (you’d be surprised to know how many decks have contradicting figures in different slides), the type of font and sizes are the same in each slide and graphs, charts or pictures are aligned.
Once you have a good deck, remember that as your business evolves the deck should evolve and you should take any meeting with an investor as an opportunity to learn and modify your deck. You should almost think of the process as launching a product where you are just following the Lean Startup method of building, measuring and learning until you get your desired result.
Omar Fofanah helps connect African early stage startups with investors. If you are a revenue generating startup on the agtech, fintech or cleantech space or you are an investor looking for dealflow feel free to connect with him on Linkedin.