Podcast: The Investor Presentation Shuffle
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They say PowerPoint is a tool for people with no power who are struggling to make a point. There is perhaps no more poignant way to describe what founders do as they flap both their wings and their slides in the form of the startup investor presentation.
Rough transcript:
(Not copy edited)
They say PowerPoint is a tool for people with no power who are struggling to make a point. There is perhaps no more poignant way to describe what founders do as they flap both their wings and their slides in the form of the startup investor presentation.
I’m reminded of a time when I had to do just that to the biggest investment fund around. The one and only Andreessen Horowitz. I recall sitting in their waiting room on Sand Hill road, being as nervous as any founder can be. It didn’t help that throughout the lobby there were framed pictures of atomic bombs exploding. I never quite knew what to make of that. Perhaps it was a not-so-subtle display of the power this fund yielded, or maybe it was just a gentle reminder to founders not to bomb this very important meeting. In any case, they called me back into the office, and the great startup slide shuffle was about to commence. I was ready and, frankly pretty pumped to be pitching to such a prestigious fund. The receiving partner at the fund, however was less than pumped. Truthfully they looked absolutely bored to death and were barely paying attention. They looked at their phone, scanned the room, and they searched for anything more engaging than my humble albeit well-designed slides. I had lost him, and I wasn’t even halfway through them. When we finally got the slide for the total addressable market, aka the TAM, I simply blurted out, “Sooooo, these are a bunch of numbers that I just made up and put on a slide for you!”. I was trying to bring some levity to the room, and I did that and much more. The partner busted up with laughter and said, “You know what, you are absolutely right about that, but no one ever has the balls to say that here!”. From that point on, the rest of the meeting was great! The partner was engaged, and the conversions and questions were flowing naturally. I think I spat out that silly line because internally I had given up but leaving that meeting, I thought hmmm I might actually get them into this deal, and all thanks to one bad joke.
Although, in reality, if I could raise money on bad jokes, I’m pretty sure that much like the Andressen himself, I would also be a billionaire. I did, however start to learn something that day when it came to fundraising. That being that, your investor deck, well, I’m sorry to say, is really meaningless when comes to your fundraising success. Yes, I know it seems super important to founders who tole away endlessly to make them, but to investors, at least good ones, it really doesn’t matter. You’ll have to win them over with much more than slides.
So why we are still enduring this silly dance in this day and age? Truthfully I think it’s time to do away with investor presentations altogether. Unfortunately I just dont see that happening…
Furthermore, I think founders too often use slides as a crutch to maneuver their way back and forth awkwardly and further and further away from making an actual point. I maybe don’t blame them, as startup pitching can be stressful, and a founder is already juggling so many thoughts in their head. You might be forgiven for needing a few cheat sheets.
So while I know I’ll never be able to convince the world to do away with investor slides altogether, let’s see if we can at least make them a little more useful and as a result, less painful for us investors to endure.
To start, and for your investor meetings please always ask the investor if they would like you to present slides or just have a discussion. You might be surprised to see that many would just prefer a more natural conversation. This is especially true in the case when you have already sent the deck ahead of time, which is probably most of the time. If they are a good investor then they have likely already read the slides, or at least casually paroosed them. So if you just show up and start reading the slides to them again it almost guarantes the investor will be bored. They wont say anything, and they let you out on your little show, but they are probably day dreaming about their next fancy dinner or ski holiday instead of listening to your pitch.
I have talked about this before in previous rants, but to get investment you have to win both the heart *and* the mind of the investor. In other words it is much better if they can get to know you as a person, not as a robot who can recite text from well rehearsed slides. And getting to know someone is a two way street that takes some back forth. Call it what you want, sparing, or maybe even jousting, but that’s actually the sign of a great investor meeting. All that back and forth even when it can sometimes be confrontational, is a good thing! You want the investor reallllly engaged and excited about what you’re doing. That happens after fruitful discussion and almost never from PowerPoint Bingo. Yes we get it, your startup is in the top right quadrant of the competitive matrix. Very exciting. Oh I see your TAM is very impressive and large. I mean you just like I have done probably made up a bunch of numbers but still, very impressive. You get the point. While there is much song and dance in startupland, there is no tango more elaborate than the investor deck shuffle.
So I guess I’m still just trying to persuade you not to deck, but we all know that won’t happen. It has become too ingrained into the fundraising process and won’t be decoupled so easily. So let’s switch from a rant to trying to provide some help and guidance.
First, let’s talk about two different types of decks, the email deck and the in-person deck. For the email deck this is the teaser, the nipple pinch, or the alluring wink to get someone’s attention And hopefully a meeting. It should at the most be 5 slides with very little text. As you are delivering the deck via email think that you have about 10 seconds to get an investor interested. That is especially true if they have no prior experience with you. In that case maybe you only have 3 seconds. Can an investor get through 30 slides in 3 seconds? Or course not. Regardless of how well you designed them.
For content, it’s just the facts and no forward-looking fairtales. It should be totally focused on what you have done, what you have learned, and not what you might do in the future. For when you have traction this should be the primary focus. That means don’t slap in endless product shots or mock-ups, you simply don’t have the space nor the time. As a small side rant, if you only have mock-ups and no traction, should you even be fundraising? Listen to my other podcast titled ‘cold emailing investors’ for more rants on that.
Exclude all the fluff in the email deck such as those tam slides and other startup mental gymnastics you founders do..
When it comes to the call to action or the ask it should not be for money! Ya no shit you are looking for money! That is sorta implied both by your investor presentation and of course the faint hint of desperation in your voice. Think about what else would make for a strong closing and all to action. Do you want their advice? Do you want to bring them along for the journey? Do you have learning or new tech so they must get a closer look at? Whatever it is, close strong and give them a reason to call you in. For those with traction don’t be shy to reiterate it again here at the end. That can sometimes be enough to perk an investors interest.
Now to the larger or in-person deck. Oy, there are so many things wrong with how these are done I don’t even know where to start. I don’t want to start going slide by slide and discussing their merit and best practices. There are already so many blogs and templates and other things to help you here. Instead, I want to talk about what I think is the most important thing with any deck with regard to their use in a pitch meeting. Mainly that your investor presentation is not a sales presentation! The investor is not going to become a paying customer! So there is no need to oversell the problem and solution and there is certainly no need to overwhelm them with product shots and every single tiny feature you have built. Basically, if you are saying the same exact things in your sales meeting as you are to investors, you’re in trouble.
Instead, and in addition to talking up your traction and momentum, talk about Why your customers love what you do for them and why they pay you for it, or why they will pay you more for it over time. Don’t tell them all the features; tell investors all value you are providing and while that value is unique in the market.
Of course, fundraising is never that easy, especially when pitching to the big funds as I did with Andresseen Horowtiz. Curious what happened after my meeting? Well, it took them about a week to reply and then it was a big fat NO. I reached out to an advisor who had set up the meeting to let them know Andressen was out. To which he replied, “Ya, I already knew, they let me know right after the meeting.”
That hurt a little, although should we be surprised that either my good slides or my bad jokes didn’t get me over the finish line? Of course not. I however learned from my own advisors backchanneling that in this business fundraising is still a lot about who you know. For those of your first-time founders without a network, well, then it will probably be more about what you know that others don’t. Articulate that well in your investor meetings and with our without slides you should do just fine.
