It should go without saying that as a founder, you can’t afford a bad pitch. But, even more than that, you cannot afford even a mediocre or “all right” pitch. Time is too tight, fundraising too difficult, and the competitive pool too large (and getting larger every day). That crucial first impression can either open doors to your next raise, or send you back to the drawing board.
We’ve seen a lot of pitches at The Food Loft. Here are the common issues we see:
Focus on app/site/company functionality rather than impact
Sitting in a meeting and going over all the various functionality of a newly launched app is fine, but it isn’t going to excite anyone, least of which prospective investors.
Talking about vision without an execution plan
On the other side of the table, we have pitches that are all about vision. This is understandable - vision is exciting, vision is the future, vision is the multi-hundred-million-dollar (or billion-dollar, with a capital B) market opportunity. Vision is not the long slog, late-night, “why did I get into this business” grind that represents the first 36-60 months of your startup.
The problem with vision is that it’s all flash and no substance. We come away from those meetings asking: “how does the company go from now to that vision?” And, in absence of any other information, we usually pass on those deals, no matter how compelling the vision may be.
The perfect pitches balance four key themes:
This is what we do
You want to convey that there is a problem that you are solving, and you’re doing it without a lot of undue complexity. Focus at a high-level on what the company does, without spending too much valuable pitching time talking about too many of the details. Digging into the weeds is great for a follow-up meeting. And, if an investor is engaged enough, they will ask.
This is how we do it
Your pitch should succinctly answer the question: what do the next 18-24 months look like for the company? This is where you can talk about your vision WITH your plan to execute it. You don’t have to lay out the execution of a 5+ year plan, but you should demonstrate that you think long-term while planning short- and medium-term.
This is what it will look like when we do it
What impact will your company have? How will it challenge what’s already happening in the food system? Vision is important when it’s balanced with other elements because it shows by people are going to pay to use your product.
This is who we are
While not always accurate, we invest about 75% in the team and 25% in the idea. An exceptional team can take a good idea and make it great. A mediocre team can take a good idea and make it to an acquihire. You want to demonstrate that each member of your team brings key expertise and that you have operational experience in the areas in which your startup is focused. Ideally, you and your teammates will have worked together in the past, and will have some startup experience as well.
- Bonus points for having engaged advisors who have agreed to be part of what you’re doing. If they are onboard, list them in the deck. A word of caution though: expect that a serious investor will want to reference check with them, so make sure they are actually onboard before you include them in your pitch.
With all of the above in mind, there’s a very simple template that can be used when constructing a pitch deck. This is just one variation of many and you can riff on this for your specific needs. Note: Ideally, your pitch decks will be 8-10 pages and no more than 15. If there is a lot of information you need to convey, consider using an appendix for that (this would include things like detailed financials, customer testimonials, deep-dive audience metrics, etc).
Current Landscape / Problem
How It Works
Total Addressable Market
Financials overview pt 2: performance to date (based on dollar volume, orders, customer growth or any other relevant KPIs you’re tracking)
Financials overview: looking ahead
Optional: Advisory Board
Raise / Ask
Use of funds
You can mix up the order here or subtract slides depending on your needs. The narrative to the pitch goes something like this:
There is a problem in the market that hasn’t been addressed. We are solving it with Company X that does Y. It’s a huge market of $XXB and we have a top-tier team with prior experience at A, B, C companies that can execute this vision. We’ve proven our model and our market based on our financial performance to date and we expect stellar revenue and customer growth over the next 2-3 years. We also have an amazing advisory board that is bolstering our core expertise in these areas. We’re asking for $XX to accelerate our growth. The funds will give us an 18-month runway and we will be using the funds to expand our team, grow to new markets and launch V2.”
Obviously your pitch will be customized and expanded to focus on specific areas. It gives your prospective investors a quick view of what you’re doing and allows them to dive deeper into areas through further discussion at the end of your pitch. It goes without saying but it’s best practice to send your pitch deck at least 24 hours in advance and ideally 3-5 days before your meeting so the investor has a chance to prepare. If you can avoid it, don’t just go through slide-by-slide in a meeting – it should not be used as a crutch. Instead, use the pitch deck as a jumping off point and try to make it more of a conversation with your prospective investor. They will be more engaged and you’ll have some insight into where they see opportunity with your startup.
If you’re in the midst of your own fundraising, check out some of our other posts on building relationships with investors, how to conceptualize your first fundraise, and why it’s important to view team roles and core competencies as a value-add for investors.