The Best Startup Investor Pitch Deck & How to Present to Angels & Venture Capitalists

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  1. J Skyler Fernandes
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    The Best Startup Investor Pitch Deck & How to Present to Angels & Venture Capitalists
    Transcript Body:
    • 1. The “Best” Startup Pitch Deck & How to Present to Investors By: J. Skyler Fernandes #1 Startup Pitch Deck Viewed & Downloaded Over 300,000+ Times!
    • 2. The “Best” Startup Pitch Deck What’s Included In This Deck?:  Aggregated Wisdom: Wisdom from some of the best and brightest investors in the VC world  Personal Wisdom: My experience in venture capital reviewing 100+ pitches per month over 6+yrs and pitching investors as an entrepreneur  Pitch Deck Resources: Consolidated information from top pitch decks online into one deck! Note: This deck has the “best” content, it’s not designed to be pretty! 2
    • 3. Consolidated Wisdom 3 Aggregated VC Wisdom Personal VC Wisdom Lots of Resources The “Best” Startup Investor Pitch Deck
    • 4. Take Online Video Course Save 50% Using Link: Create Your “Best” Pitch Deck 4 • Over 3.5+hrs of video content • Walk step by step through each part of the pitch, with personal stories and advice • Download this deck template on Slideshare • Use template to make your “best” pitch deck
    • 5. Aggregated Wisdom • 500 Startups • Arc Angel Fund • Canaan Partners • Centripetal Capital Partners • David Rose • Harvard Business School Angels • New York Angels • One Match Ventures • TechStars • Worldwide Investor Network 5
    • 6. Who Am I? I’m Sky. • Founding Managing Director of Simon Venture Group, venture capital arm of Simon, S&P 100 company and largest retail real estate company in the world • Ranked “Top 10 Corporate Venture Fund In The World”, focused on investing in ecommerce and retail tech • Angel investor and founder of One Match Ventures, a seed fund and provides resources for entrepreneurs • Former VC at Centripetal Capital Partners, a multi-stage venture capital fund • Gave first TEDx Talk on Venture Capital: Innovating the Financing of Innovation • Adjunct professor at NYU, teaching Venture Capital Intensive. Faculty / board member at Bard MBA. Frequent speaker on entrepreneurship and venture capital at Harvard Business School, Wharton Business School, The New York Venture Summit, The United Nations, New York Stock Exchange (NYSE) 6
    • 7. Entrepreneur Board Game: The Next Big Thing Sign up now to play the board game: “The Next Big Thing, The Game of Entrepreneurship”. All the cool VC’s and entrepreneurs are playing it! How to Play & Win: Start with a founder’s card, which has a certain amount of cash savings to bootstrap and a previous skill set as your superpower. Raise multiple rounds of capital and watch your founder’s equity get diluted along the way, try to survive an increasing amount of expenses by increasing revenues, and eventually exit via an acquisition or selling your shares post-IPO. The player with the highest founder’s value wins, by achieving the biggest exit valuation and having the most founder’s equity remaining. Co-founded by me and my wife, inspired by The Game of Life and Monopoly, and wanting to create a fun friends and family board game that taught the fundamentals of entrepreneurship and capital raising. 7
    • 8. Content • The “Best” Pitch Deck Outline – What slides to include. Scalable: 5-30 slide deck options. • Potential Appendix Slides • The “Best” Pitch Deck – What to include on each slide • Top Pitch Deck Guidelines • Before The Pitch • How To Pitch Effectively • Top Investor Questions • Words Of Wisdom 8
    • 9. The “Best” Investor Pitch Deck Outline 0) Cover Slide 1) Elevator Pitch Slide 2) Market Problem & Current Solutions 3) Market Opportunity: Define Market, Size & Target Client 4) Your Solution (1-5 slides) 5) Team (If really impressive, move after “Elevator Pitch” and lead with it) 6) Board Members & Advisers (Optional, combine w/ team slide) 7) Traction & Awards (Optional, if none yet) (1-3 slides) 8) Market Fit / Competition (Optional, can be explained in slide 5 & 6) 9) Competitive Advantages (Optional, can be explained in slides 5 & 6) 10) Revenue Model: Key Revenue Streams & Business Model 11) Expense Model: Key Expenses, Time Efforts & Strategy 12) Financial Projections 13) Exit Strategy (Optional) 14) The Ask: Capital Raise & $ Uses 15) Closing Slide: Questions? Contact Details 9 Various Deck Size Options & Content: 5 Slide Deck: 1, combine 2 + 3, 4, 5, combine: 7 + 10 + 11 (Show LTV / CAC Multiple) + 12 + 14. 10 Slide Deck: Don’t include optional slides 15-30 Slide Deck: Slides 1-15 + add’l slides: Your Solution (1-5), Traction (1-3), Explain: LTV vs. CAC
    • 10. Potential Appendix Slides • VC Favorite Slide: Life-time Value of Customer (LTV) vs. Cost to Acquire Customer (CAC) • Timeline: History, Milestones & Prior Fundings • Detailed Value Proposition to Clients / Users / Partners • Additional Screen Shots from Demo • Average Revenue Per User (ARPU)? Per Client Size? • Pipeline of potential clients, % likelihood of closing, revenue potential from pipeline • Churn rate by cohort analysis • Detailed Financial Breakdown: Revenue % by type, expense % by type • Cash Runway (# months @ $ burn rate) • Breakeven Analysis: # Clients / $ Revenue needed to match $ expenses per month • Head Count Projections (# Employees) / Type of Key Hires Needed • Partnership Agreements / Structures • Proprietary aspects not discussed in core deck • Additional Strategy Slides: Ex. Architecture, How to avoid/limit circumvention, Funnel system of business operations, Growth strategy • Capital Structure: Ownership of founders & current investors • List of Competitor’s Capital Raises & Investors • Summary Slide: Why We’ll Be Successful (Add if deck > 15 slides, otherwise too redundant) 10
    • 11. Cover Slide • Logo / Name of Company • Purpose of Presentation: “Investor Presentation” • Date: Optional - if you send a deck with an old date, you look outdated (is it taking you a while to raise the round, mmm that’s odd, why’s that?), I suggest never using a date! • Other Potential Additions: • Logos of accelerator, awards, publications featuring company • Slogan • Name of Presenter / CEO 11
    • 12. Elevator Pitch Slide Create a brief one liner that describes: • What’s the service / product? • What’s the core problem (describe pain) or need that you’re solving? • What’s your big vision? • Graphically show all of this if possible (and use less words than on this slide!) 12
    • 13. Market Problem / Current Solutions • What’s the problem or unmet need you’re solving? • Clearly show the pain of the problem or convey the strong need that is currently unfulfilled. Don’t just say it! • You can’t create demand (usually only market leaders can) • Current Solutions = Current Problems and/or Significant Inefficiencies? • Biggest competition = Status quo, changing customers behavior, even if old systems are inferior, they exist everywhere, you don’t • “Solve your clients' number-one problem“, Cyrus Massoumi, CEO of ZocDoc. Not their 4th or 10th problem. What keeps them up at night or really really bothers them? 13
    • 14. Market Opportunity • What is the Total Addressable Market (TAM)? • What’s your real target market size? The sub-sector of the General Market? • Example: Total sales of mid-priced women’s shoes online (TAM) vs. Total online retail sales (Genera Market) • Name it. Size it: in Units and/or Revenue. Growth rate % & projections. • Define Target Client? Key characteristics? • Ex. Consumers vs. Enterprises, Demographic target vs. Type of business (small vs. large), examples of ideal individuals or clients • Current demands and unique needs? • Describe any important market evolutions and why we’re now at an inflection point 14
    • 15. Your Solution / Demo • Show > Tell: ~1-5 slides of your product / service • Show screen shots of key parts of business • If you have time in a meeting, show a live demo (but not when pitching on stage) • Don’t show a video, it can fail to play and takes away from your precious time • Tell a story of a future client or an example of current client • Show the core value proposition to a client – Better, Faster, Cheaper (More Economical) 15
    • 16. Team • Core Team: The Founders & Chiefs • Photos (Optional) • Relevant Experiences / Successes (Exits?) / Failures (Good war stories?) • Leadership Experience • Education • Don’t write sentences, do 1-3 brief bullets per person, or even better do 1 key bullet per person “We are the right team who can execute this business plan because...” 16
    • 17. Board & Advisors • Board of Directors? (Wait until after Series A round to establish a board!) • Board of Advisors? (Give 0.1%-1% to advisors, no more!) • How can they help, other than being a big name? • Are they investing? Big points if “Yes”! – If “No”, be careful. Your big fancy named advisors will go from being a positive to a negative. If they are successful and have capital, they should invest, otherwise it shows lack of real support. Have a good reason for why not if asked. 17
    • 18. Traction / Performance / Awards • Timeline / Key Milestones • Soft Traction: See other people think we’re awesome! • Accelerator programs (we graduated!) • Awards: #1 Best Startup / # 1 Best DEMO • Lots of articles about us: TechCrunch / Forbes / CNN / FOX • Hard Traction: We’re growing fast! Lots of clients and making money! – Brand name clients or strong volume in pilot phase and/or paying – A growing pipeline that will generate lots of $ – We’re performing amazing for clients, look at these results! – See our key business metrics, see we’re doing great! • Show increasing # customers, increasing total revenues, increasing revenue per customer, decreasing cost to acquire a customer. Show LTV > CAC! In the end, this is all that matters! 18
    • 19. Market Fit / Competition • Show how you fit into the Market Landscape • Direct Competitors vs. Indirect Competitors? – How much capital raised? Which Investors? Revenues? Key stats? – Why won’t indirect become direct if they see what you’re doing works? • Your biggest competitor is the status quo! Why will customers switch to you vs. the incumbent? • Are you changing customer behavior? • Types of Diagrams/Charts: • Market Landscape: X / Y axis charts or venn diagrams (often used, easy to make, easy to understand) • Feature List Comparison (often weaker looking, more confusing, takes longer to understand) Pitch why you’re 10x better, not just 3x better! 19
    • 20. Market Landscape (Example 1) 20 Quality Economical Your Logo Co. A Co. B Co. C Co. D Quality Economical HighLow Expensive Discounted Your Logo Co. A Co. B Co. C Co. D Put your company in the top right corner!
    • 21. Market Landscape (Example 2) 21 Industry Segment 3 Industry Segment 2 Industry Segment 4 Industry Segment 1 Your Logo Indirect Competitor Logos Indirect Competitor Logos Indirect Competitor Logos Indirect Competitor Logos Direct Competitor Logos Direct Competitor Logos Direct Competitor Logos Direct Competitor Logos Competitor Logos Competitor Logos
    • 22. Feature List Comparison 22 Company Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7 Total Your Company        7 Competitor A     4 Competitor B     4 Competitor C    3 Competitor D   2 Competitor E   2 Indirect Competitor A   2 Indirect Competitor B    3 Indirect Competitor C    3 Indirect Competitor D    3 Indirect Competitor E    3 This often makes you look 2-3x better, not 10x better, so maybe only have as an appendix slide
    • 23. Competitive Advantages • Current Competitive Advantages? • Sustainable Competitive Advantages? • Unfair Competitive Advantages? • Patents? • Key Relationships / Partnerships? • Barriers to Entry for New Players? • Money, Time, Expertise, Relationships, Patents • Competitor’s Competitive Advantages / Weaknesses? 23
    • 24. Revenue Model • How do you make money? Key revenue streams? • Pricing? Flat fee or %? Why that rate? • Recurring revenue frequency? • Is there a big difference between Gross vs. Net Revenue? • High Volume vs. Low Volume Business? • Example showing basic math: • 100 Clients x A Units x B Fee = $C Revenue • Easy to apply multiples: 10x, 100x clients • Cash collections: Immediately? 30-90 Days? • Expected conversion rate to get a paid client? • Expected ARPU (Average Revenue Per User)? • Life-time Value of Customer (LTV)? 24
    • 25. Expense Model • Key Expenses / Time-Efforts Needed To Generate Revenue? • Channels: How to reach / market to customers? • Strategy: How to convert, acquire or close clients? • Unique Strategic Relationships / Partnerships? • Potential for leverage or scalability to grow fast economically? • How long is sales cycle to get a client? • Average Cost to Acquire a Customer (CAC)? • Cost to Maintain a Customer & Build Recurring Sales? • Monthly burn rate, now vs. after funding? VC Favorite: Show your LTV / CAC multiple (higher the better) and explain how you plan to increase LTV and decrease CAC overtime. Every great company is a machine where you put money in on one side (expenses) and more money comes out the other side (revenues), to become profitable, scalable, and sustainable. 25
    • 26. Financial Projections • # Years Projected: • Early-mid stage: 1-2yr historicals, 3-5yr projections • Pre-revenue (angel / seed stage): May show 6yr projections (accounts for ~6 mos to 1yr to build technology before generating revenues) • Target Market Size vs. Acquired Clients: • Show total # potential clients in target market per year. Show growing market size. • # Free Users vs. # Revenue Generating Users • Show total # clients per year and % market penetration • Shows entrepreneur’s sanity: Growing from 0% to 1%-5%+ penetration is usually sane and conservative, acquiring 50%-100% of the target market is insanity • High Level Financials: • Main line items: Total Revenue, Total Expenses, EBITDA, EBITDA Margin % • Optional: Break out key revenue streams and Gross vs. Net Revenue • Optional: Break out key expenses (Ex. # Employees) 26
    • 27. Financial Projections 27 By year 5: Revenue = $30M-$50M+ (ideally $100M+), EBITDA = $10M-$20M+ • Exits = 1-5x+ Revenues, 6-12x EBITDA. Check comparables in industry • VC’s look for $100M-$1B+ exits to achieve 10x-100x return multiple on capital – Initially investing at $10M-$100M post-$ valuations EBITDA margins usually range 10%-40%. Good sanity check on model. • Look up public companies in your industry or reports to see what is normal
    • 28. Exit Strategy 28 • Acquisition: Most likely exit option for companies • Name potential companies (any unique relationships with them?) • Name types / categories of companies that could acquire you • Why would they acquire you, how do you fit into their strategy? • Why won’t they try to build it themselves? • Financial Buyer: Will your company generate excess cash flow that could make it attractive to financial buyers to generate a return? Often buys for lower multiples (not as high exits), as no strategic value, may flip company and sell it in a few years • IPO: The least likely exit for a company, but a possibility. Often not preferred to founders or investors compared to top two choices, due to required holding period (~6 months) after IPO and volatility. Preferred exit strategy if you’re building a really big stand alone company (instead of a bolt on business that’s easier to acquire) and no good acquirers exist that could pay enough to acquire it (as future value is far greater) – Note: ~80% of VC exits are via acquisition, only ~20% IPO
    • 29. Capital Raise & Use of Proceeds • The Ask: How much capital are you looking to raise? • Capital Raise: • Stage / Size? Example: Seed Round: up to $500K, Series A: $2M-$3M • Investment Terms: • Preferred Equity (convertible into common) @ $X Pre-Money Valuation • Convertible Note @ $X Valuation Cap, Y% discount into next round, Z% interest rate, W months to maturity, 1.5x premium (if acquired while note is outstanding) • Investors in Round: Previous investors? New investors? Founders? Key angels or strategics? • Avg. Monthly Expenses? / How long will new $ last (runway)? • Prior Investment Rounds: Size? Investors? Valuation? Key Terms? • Use of Proceeds: (Name It / $ Amount) • Sales & marketing, Hire key employees, Founders salaries (Don’t be greedy!!!) • Build out / further develop technology, File patents • Achieve key milestones: 1st Client? Get to Breakeven? 3x Rev Growth? 29
    • 30. Closing Slide • Your Logo (Big & in Middle) / Link to site • Any Questions? • Contact Info: Name / E-mail / Phone After all questions have been asked by the investor, ask “What’s the next step in the process?” Remember: Goal of Meeting = Get the Next Meeting 30
    • 31. Top Pitch Deck Guidelines • Suggested Core Slide Deck: 15-30 slides (See “The “Best” Pitch Deck Outline”) • There are no correct # of slides, only key pieces that need to be covered • Typical Deck Variations: 2 min (5 slides), 5 min (10 slides), 10-20 min (15-30 slides) • Keep slides clean, no clutter: ~1-5 bullets/slide, ~5-10 words/bullet and big clear images • Show, Don’t Tell: Don’t be cocky/braggy/hyperbolic, show AWESOME/AMAZING results! • Show “super simple” images, graphics and diagrams (that need little to no explanation) • Key Takeaways: Concisely summarize main points at the top or bottom of slides • Deck should be simple / clear enough to explain itself and not need you to present it • When presenting have add’l info/insight to share with each slide = Your “added value” • Check for typos / math errors or internal inconsistencies (# widgets on slide A vs. slide B) • Consistent Formatting: Caps vs. lowercase, colors, font type, font size, spacing, etc. • Font Type: Arial (No odd looking letters = Easy to read) • Font Size: Only use size 20 or larger (Otherwise too hard to read from a distance) • Don’t use dashes “-” as bullets, they look negative, use other styled bullets • Add page numbers (Bottom right of page) • Dark backgrounds with light text colors project well (kills printer ink, but who prints?) • You can also use white backgrounds with black/dark color font 31
    • 32. Before The Pitch 32 • Get introduced to an Angel or VC, they don’t respond well to random calls/e-mails • Review portfolio companies of Angels / VCs before sending them your investor deck • Investors don’t invest in companies that compete directly with a portfolio company (shocking!) • If you send your deck to an investor with a competing portfolio company, it will be shared with them • If there are strategic companies in their portfolio, they can make introductions to them even if they don’t invest, such as potential clients, strategic partners, future acquirers, etc. • Review investment criteria of Angels / VCs before sending investor deck • Make sure you fit their industry focus (ex. Energy) or business type focus (Ex. B2B / B2C) • Check the size of capital they invest ($250K? $1M? $3M+), the company stage (Startup/Early Stage/Growth Stage, etc.), or required financial metrics (Ex. Min of $1M in Revenue or EBITDA) • Review investor backgrounds to find useful overlaps or who best to speak with at fund • Practice, Practice, Practice! Nail down flow, slide transitions, timing, clarity of concepts, key mental frameworks, stories, answers to likely questions, etc. • Arrival: Arrive 10 minutes early to set up computer, projector, get access to Wi-Fi, etc. • Attire: Business casual is fine, no need to wear a suit, unless you want to • Ask investors in meeting to be introduced, provide a quick background on themselves, and the fund (you may just learn something and people love talking about themselves!)
    • 33. • Open by saying your name, title/role, and company name (Allows audience to get familiar with your voice before you start pitching, and it’s just polite!) • The Quick Hook: Grab the emotional attention of the audience within the first 1 minute • Pitch your vision, not just what you currently have or are • Tell a story: Take your audience on an exciting upward journey with smooth transitions • Reference things people know / understand, don’t make people think or question you • Show real validators to prove your points, supported by strong emotional validators • The Right Opportunity: Clearly convey a Big Market + Big Problem + The Right Solution • The Right Team: Qualities - Integrity, Credibility, Passion, Experienced, Knowledgeable, Skilled, Leadership, Confidence, Commitment, Visionary, Realist, Coachable, Doers • One Joke: Make audience laugh at least once, but don’t do a comedy routine • Cost to Acquire & Maintain a Customer Capital Raising Questions: • What’s the capital raising history of the company? How much and on what terms? • When did you start raising this round? What investors have hard committed vs. soft committed? • Have you invested any of your own money? • Are your advisors or board members investing? • What’s your valuation? Terms? • How much cash is in the bank? What’s your monthly burn rate (expenses not covered by operating cash flow from revenues)? What’s your runway (how many months do you have before you run out of cash?) given cash in the bank and after this next round? Will it get you to profitability? • What are your use of proceeds (how are you planning to spend the capital?) and expected results/milestones? 35
    • 36. Words of Wisdom • There are no right number of slides, only critical points you need to cover! • Be 10x better (at one thing vs. doing 10x more things). Being 2-3x better isn’t good enough! • Focus on your customers #1 problem, not 10th problem • Prepare yourself for rejection, ask why and learn (don’t take it personally) • There are lots of great ideas, but few can execute them • Time is your biggest enemy! Build quick and cheap, and iterate, iterate, iterate…pivot when needed • Biggest competition to raising capital: Companies with equally great (or better) ideas and teams, but more traction at your stage (If you were a VC, which would you pick?) • Best Opportunity: A big growing market, with a big problem, and an elegant solution, where you can achieve LTV > CAC • You don’t know, the market does! Ask often. 36
    • 37. Save 50% On Course Using Link: Take “Best” Pitch Deck Course 37 First-Time Entrepreneurs Serial Entrepreneurs • Take Online Video Course on Udemy • Over 3.5+hrs of video content • Walk step by step through each part of a pitch, with personal stories and advice
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Recent Reviews

  1. MentorCoachSCBildinCapAbility
    Version: 06/07/2013
    Incredibly Excellent! Thanks a lot J. Skyler Fernandes. I needed one such guidelines very badly. However wanna ask if this would work for businesses with social impact/non-profits? If you're still following your post.Would request a response.
  2. Michael Eagleton
    Michael Eagleton
    Version: 06/07/2013
    I agree this is excellent. Many thanks J. Skyler Fernandes for sharing
  3. Jose Gonzalez
    Jose Gonzalez
    Version: 06/07/2013
    Excellent !
  4. Chau Nguyen
    Chau Nguyen
    Version: 06/07/2013
    @J. Skyler Fernandes : thank you for your slides and comments.
  5. Alessio Delmonti
    Alessio Delmonti
    Version: 06/07/2013
    very helpful, it is good for angel investors as well?
  6. Sanjay Singhal
    Sanjay Singhal
    Version: 06/07/2013
    Great post, I'm forwarding it to a company I mentor right now.
  7. Jose Gonzalez
    Jose Gonzalez
    Version: 06/07/2013
    Very good ! Thanks,
  8. William Yung
    William Yung
    Version: 06/07/2013
    Thanks for sharing~!
  9. Albert Piechotta
    Albert Piechotta
    Version: 06/07/2013
    Concise. Clean and neat
  10. Gerard Lehman
    Gerard Lehman
    Version: 06/07/2013
    This is all well & good; however, it basically describes what is needed for a well-groomed business plan. What entrepreneurs need is an introductory pitch that captures the investor's attention right now, resulting in the investor embracing their idea/company/product/service, etc.