Part 3 in From Seed to Series A: The Deck, the Model and the Ask
When you’re ready to pitch investors, you need three things: a deck, a financial plan and an idea of how much you’re raising.
Most of the time, the deck allows a potential investor the first meaningful insight into your company, beyond the product. Whether rightly or wrongly, lots of VCs use it as a way to screen whether they should even take a meeting. So it’s an opportunity for you to tell your story in a concise and compelling enough way that they’re left wanting to learn more.
(As a side note — I wouldn’t be concerned about investors sharing your deck with competitors. Good VCs know that reputation is everything and would never act in an untrustworthy manner. Better to demonstrate confidence that you know, even with all the information in the world, your nearest competitor still couldn’t execute as well or achieve as much as you).
On the deck itself, only two rules:
- The deck is an extension of your product. So use a designer!
- Keep it brief. You should be able to tell the complete story in 10 slides. Or even six.
Remember fundraising isn’t solely about what you’ve achieved or what you’re planning to do. It’s showing to investors you can also articulate your story and get others excited by it (critical not only for fundraising but also for hiring, business development and marketing). Presentation and communication is part of that. It also means having a clear strategy and plan. I’m constantly amazed how many teams haven’t thought through a financial plan in detail at the time of fundraising. At this stage, whether revenue generating or not, you should know what this year’s and next year’s financial plan are. The deck should include a 3 year P&L (1 year historic, current year and next year out). Be clear about the assumptions you’re making — they should be an extrapolation of trends you’re already seeing.
With regards the amount to raise — this fundraise should take you to the next major inflection point in the business. Maybe that’s launching another geography or adding a new product/feature that takes you into a larger customer segment or just doubling down on existing growth channels. For most companies, that milestone is likely 18–24 months out so you should aim to raise the requisite runway to get there. But also don’t be fixated on a number. VCs may differ in their opinion of when that milestone is and how much cash you actually need. These conversations are important. The partner you choose at this stage will be someone you’ll build the business with for the next 5+ years so it’s important can have constructive conversations around these topics and are ultimately aligned on the key objectives.
Next up in our interview series — Martin Mignot, partner at Index Ventures.