Startups and the perils of porn

Fantastical, unrealistic and it makes investors go blind

Last night I received an email from a founder I’ve been helping over the past few months. A few words of wisdom about their branding. Nudging them to focus on metrics that matter. Some common sense and honest feedback, a couple of introductions — nothing I wouldn’t do for any startup that asked for help.

Last night, the founder emailed me again:

Just putting together our next-round investment pitch deck. We were wondering if we could possibly put your name down as a mentor to us?

It would have been easy to say yes. I’d have my ego stroked, I’d be associated with (what I believed) was a strong team and a compelling product and it would have fleshed out their team of advisors. Where was the harm?

I have to be honest, I think it’s a little disingenuous to include me on the deck. I’m well enough known that any one of a number of angels and VCs could pick up the phone and ask how I’m involved — I’d have to be straight and say I’m not really, which doesn’t help your cause.
There are teams I have a formal relationship with, and then there are plenty of other founders I help out where I can with advice— and I’m really happy to do that, by the way! However, if teams are going to use my name when raising, I have to draw a line somewhere.
That’s not a pitch and I’m certainly not asking for anything — I’m happy to help out on an adhoc basis as I have been, but I don’t think it’s good to misrepresent the relationship when investors are involved; they’ll poke and prod and you don’t want that backfiring.
Hope that’s ok.

Thankfully the founder took the email in the spirit it was intended, and so today I’ve spent some time providing feedback on the presentation deck before the team pitched to investors. (Obviously there are no names included above, but the team were happy for me to reproduce the conversation.)

However, it highlighted a problem that far too many startups suffer from — an addiction to pitch porn.

Like regular porn, pitch porn is very easy on the eye (your tastes may vary accordingly), completely disconnected from real life and degrading to others.

And like regular porn, pitch porn can kill relationships.

You’ll know pitch porn when you see it, when the founder starts pimping out brands and clients, filling slides with third-party logos to impress their audience. Next is the slide of mentors and advisors — smart people in sharp headshots, evangelists and entrepreneurs, sector specialists, plenty of grey hair, maybe a Googler or two.

That’s not to say that all startup presentations are fantasy, because that certainly isn’t the case — but depending on the scruples of the founders, the truth may have been stretched pretty thin.

Those third parties described as “customers” are so often free trials, or perhaps they merely signed up to the startup’s newsletter — but that classes as a customer, right? In other instances, a brand may have replied to a founder’s initial email —a scenario less accurately but all too commonly described as “in negotiations”.

And let’s take another look at those advisors. Have they invested? Do they have an equity stake? What formal commitments have they agreed to undertake? Or did they once reply to an email? Were they hassled into meeting for coffee in Ozone a week last Tuesday?

Playing fast and loose with pitch porn happens at every startup contest. It’s a dangerous game. Recently a team presented to Ignite’s investors at final interviews for our accelerator programme. One team included a slide of companies they claimed to be paying customers. Unfortunately for them, one of Ignite’s investors knew the founder of one of those companies.

Before the team had finished their presentation, the investor had emailed the founder:

We’ve just been pitched by these guys and they say you use them??
Do you?
Any good?

And before the team had finished the interview, the founder had replied:

Definitely not using it.

The interview didn’t end well.

We have a rule at Ignite that we expect all teams to follow when pitching:

No pornography allowed.

If a team boasts about mentors and advisors in their presentation deck, we expect there to be a formal agreement in place. For a third party brand or business to be identified as a customer or a partner, we expect invoices to have been issued, contracts to have been signed — or a Heads of Terms to have been agreed at the very least.

It’s very tempting for a new team with limited resources and dwindling funds to take shortcuts, but it’s so important to stay honest, because it makes you work harder to secure the deals that matter. The world is too small and it’s too easy to get caught doing otherwise.

There’s a time and a place for porn, but it’s not on stage in front of an audience. The last thing you want is to be caught with your pants down.

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