Submitting your deck: a quick guide for founders

TL; DR It’s really hard to get VC funding, but if you follow the tips in this post you’ll maximise your chances of getting a first meeting. If you haven’t been successful, then this post should give you a few pointers as to why.

Let’s start with the VC’s perspective

To maximise your chances of success, you need to understand what it is that investors are looking for. Your idea may be fantastic, it may become a good business, but if it doesn’t generate ‘VC level returns’ it’s not a fit for funding.

Each fund will have a different view of what VC level returns means to them, but your company must have the potential to be huge— you may hear this expressed as a multiple (‘We’re looking for a minimum of 100x’ i.e. 100x the initial investment amount) or a target valuation (‘We need this to a be a billion dollar company’ i.e. the value of the company at exit is more than $1bn).

This isn’t based purely on greed, but on something called the VC power law. In very crude terms it means that the bulk of returns for a successful fund come from a few companies that achieve these outlier multiples/valuations. In other words, to be successful, a fund has to have a couple of really big exits.

What this means for founders is that if your company doesn’t have this potential, you’re likely to get a ‘pass’. To put this into context, we fund less than 0.5% of the deals that we see. A pass doesn’t mean the end of the road for your company, it just means that it isn’t a fit for our criteria.

Things to consider before you hit Start

We made the decision when we launched Fund II to have a form on our web site where founders can pitch us. We did this in the belief that access to VC should be open and based on merit. As a consequence we receive a very large number of submissions. Please consider these steps before hitting Start:

Understand our investment criteria

We take a sector-agnostic approach and, in keeping with our angel heritage, prioritise finding and building deep relationships with exceptional founders over a rigid investment thesis. That said, we particularly like deep tech (AI, machine learning, computer vision), SaaS, marketplaces and B2B companies. Our typical first cheque is £400k although we can invest smaller amounts.

Answer the questions thoroughly

We put questions in the pitch us form to gather information about your company that is important to us. If you don’t answer all the questions or only give one word answers, it’s very unlikely we’re going to engage with you.

Taking each substantive question in turn, here’s what we are hoping to see:

What does your company do?

This is your elevator pitch. Explain clearly and succinctly what your company does and what problem it solves. This is an opportunity to explain not just what your company does and how it does it, but why you founded the company. A key thing for us to understand here is your motivation.

Who are the founding team and what makes them well placed to make your company successful?

This is your chance to showboat and tell us why your team is best placed to build a company in your chosen market. Don’t hold back. We want to hear about your academic achievements, relevant work experience that has allowed you to build domain expertise, previous entrepreneurial experience and what you learned from it, etc. We are looking for the top 1% of teams.

How big is the market your company is operating in?

We need to understand both the size and growth rate of the market your company is operating in. We’re trying to answer the question: can this market support a company that will grow to a $bn valuation? We’d expect some analysis here on your strategy to grow geographically or horizontally (or both) if the initial target market is not sufficiently large.

What have you achieved so far?

This is where you can provide a summary of your traction to date. A bullet point list works well here. You should include revenue (if applicable), tech milestones, customer interest/sales pipeline, etc. One of the things we’ll be looking at is traction vs time; we tend to favour companies that start life moving fast as speed generates positive momentum.

What will you do with the funds?

This is actually a two part question: what will you spend the funds on and, more importantly, what will you achieve with those funds. If you are spending £300k on marketing without any goals/metrics that raises an early concern. A well thought out answer will explain what will be achieved with this round of funding and what the next round of funding is likely to look like.

Is there anything else you think we should know that didn’t fit into any of the other responses?

Don’t feel that you need to fill this in, but if you have anything else you think would be helpful for us to know then you can pop it into this box.

Get your deck looking sharp

What constitutes a good deck is somewhat subjective, but here are some things to avoid:

• Typos — seriously, this is a real deal killer. It may seem minor, but if errors creep into the deck, which is the most important document you have in the early days of your company, it makes us wonder what other mistakes are being made
• Poor design — the use of clipart, cheesy stock images or poor formatting make us want to stop reading your deck. The best decks are beautifully designed and a showcase for your company. If you don’t have the design skills in-house, there are plenty of freelancers out there who can help
• Too many words — given the volume of deals we (and any other VC) receives, your deck is likely to get a few minutes of attention (at best) before it’s put into the ‘follow-up’ or ‘pass’ queue. If it’s too wordy and impenetrable then you risk being put into the ‘pass’ queue
• Too many slides — there are many arguments about the perfect length, but a dozen slides is a good guide. A deck is not trying to tell an investor everything about your company; it should be getting them excited about you, the company and the market and want to find out more
• Misleading information — be really careful how you present things. For example, if you show 5 people on your team page, but some of them are part-time (with no intention of becoming full time) or are actually advisors this can start things off on the wrong foot
• Not being able to download — this is a minor irritation, but not allowing the option to download your deck means that we cannot easily share internally or download to add to our CRM that manages all our dealflow
• Sending out your deck too soon — if the first time you are exposing your deck outside your team is to a VC, consider getting some feedback from other people first. You could try speaking to individual angels, one of the angel investment networks or an accelerator/incubator in your space. They should be able to give you a good first screen before you reach out to a VC. The mantra that first impressions count is as true in this business as any other so make sure you are ready for a high level of scrutiny

What happens after you send your deck to us

Once you have completed the form on our web site, it gets added to a queue for review. One of the team will pick it up and carry out an initial screen. We aim to reply to all submissions within 2 weeks, although we try to be faster.

If we do pass on your company then we’ll send you an email confirming why we have done so. Unfortunately, given the volume of companies we look at, we are not able to enter into a discussion once we have sent that email. However, we hope this blog post might serve as a useful guide in that case.

Conclusion

We recognise that behind every company is a dream to do something different and to make a dent in the universe. We have enormous respect for founders and hope that this blog post is useful to help understand the way we analyse and think about companies when it comes to making funding decisions. We also hope it serves as some comfort if you do receive a ‘pass’.