The Secrets of Pitch Deck Road

The Mecca of VC: Sand Hill Road

The illustrious pitch deck. For fund managers and founders alike, pitch decks still live at the heart of a successful, or not so successful, fundraise. A strong pitch deck has the power to give life — to take the vision that you, as a founder, have of the world when your company is successful, and communicate it to others. It is the wedge that allows for you to enter conversations and the framework in which investors will understand your company from.

This is not an easy task. Investors, regardless of type, get pitched hundreds, if not thousands of times each year. The question to ask is: “How do I stand out?”. There is always a good answer to that question, and arguably more importantly, a good investor-founder fit to be discovered. The exercise is to uncover it.

After working with dozens of startups and emerging funds on pitch decks that have helped raise ~$2B in capital, we’ve developed frameworks for helping you tell stories (through the deck, and otherwise) that can help you raise capital successfully, reduce your fundraising timelines, and just perhaps, increase your valuation.

The answer starts and ends with your company story. The best pitch decks are delivered as a narrative. That doesn’t mean its all fluff, the strongest narratives are well supported with data as well. The framework, the sequence of events, in which you use to tell that story and deliver those datapoints is the key.

This is how you set the tone for people to understand your company.

In literature, all good stories or plots are broken down into 5 core components:

• Introduction — the beginning of the story that introduces the conflict, characters, and settings
• Rising action — events before the climax; character’s attempt to solve the problem, but fails
• Climax — the turning point; the point of the greatest suspense or action
• Falling Action — action and events that occur after the climax
• Resolution — end of the story where the conflicts or problems are solved

Plot Diagram

A pitch deck is similar:

• Act I of your deck is where you state your case, consisting of your introduction and rising action.
• Act II is where you highlight your offering and derisk, consisting of the climax and falling action.
• Act III is where you show trajectory and make investors want to pile in, resolving the story with a happy ending.

So how exactly do we do this? Let’s go one click deeper.

Act I

The key to stating your case is building tension. Tension is what drives interest because tension is opportunity. Investors don’t want to just see a problem. Investors want to see a problem that a lot of people care about and that no one has solved. When all these stars align you get a massive opportunity typically associated with “$” and “B”.

1. Problem: Start off by describing how the world works today. What is broken in the market?
2. Relevance: Next, state why this is important. How is this problem negatively impacting our world? Why should investors care? Why now?
3. Market Opportunity: Then, identify what is stopping improvements from being made. Is it a technological inhibitor? Are the incumbents unable to solve this problem, or worse, exacerbating it? For LP decks, what is the potential untackled opportunity for the fund and its investors?

If you did this well, the investor should be fully bought into the problem space here and at the edge of their seats waiting to hear your solution for it. The solution should feel so incredibly obvious when you reveal it. This is tension building.

Act II

Now, as we reach the peak of tension, we can begin to reveal our cards one at a time. Ironically, we’ve empowered the investors we’re pitching with industry expertise on the market, problem, and opportunity in Act I of the deck — information they will in turn leverage to evaluate whether our solution, product, company will sufficiently pass their investment criteria.

Now, in Act II, we address the most important questions about the company, including:

1. Company: What is your company or fund one-liner? How do I want an investor to explain my company to their team or their LPs?
2. Product and Thesis: What is the product or service your company is selling? For LP decks, what is the focus or thesis of your fund?
3. Value Proposition: What are the strengths of your company? For LP decks, how does your fund succeed in sourcing, picking, winning, and supporting founders?
4. Competitive Positioning: Why can’t other competitors do the same thing? What are our moats?
5. Business Model: How does your product and business model work? What is the business model or economics?

And then, of course, take the time to explain any of the special acts of your company. Do you have a fundamental distribution advantage? Build on that if so? Is the company built on a patent? Emphasize that if so. Good companies have at least 1 core advantage that gives them a big leg up over the competition, its important to find and lean into yours.

Each answer peels back the layers to the company and derisks, or releases the tension you built up from Act I. While these questions and answers are logical ones, the goal is to evoke emotional reactions and feelings filled with curiosity, understanding, and excitement — almost as if they knew this was the answer all along.

Act III

Finally, we close into the last act. When we think of Act III we think of trajectory and resolution. While resolution might feel like a slowing down and the closing of gaps, the trajectory feels exciting and new. This act needs to strike a fine balance between the two — showing investors that there’s high growth potential backed by a vetted strategy and getting across the finish line to a favorable termsheet. While these slides are typically standard, their flow is crucial.

1. Growth Strategy and Proof Points: Describing your growth strategy allow investors take a peek into what’s next and what the journey to scale looks like. For LP decks, what is your investment strategy? What proof points can you give to make investors believe you can execute on this strategy. Do you have a track record of success or any case studies?
2. Financial Projections and Market Sizing: To put the growth strategy into context, financial projections or market sizing helps investors place targets, even if not guaranteed, and resurface the actionable opportunity from Act I. Always do bottom-up, never top-down. If you’re raising a seed, don’t over-index on your projections, focus on the market sizing.
3. Team: Investors need to have confidence in the people they are investing in and find validation in their ability to build the company and execute on growth strategies. For emerging funds, this team slide might be beneficial to have upfront in the deck.
4. Advisors: Listing your strategic advisors and/or existing investors allows prospective investors to have faith on the experts and partners that will be guide your company to scale and facilitate industry connections.
5. The Ask: Investors might want to know what you are looking to raise (Seed, Series A+) and what the fundraise would be used for at a high-level. For emerging funds, what are the terms of the fund?
6. “Recrescendo”: Remember, it’s rare (outside of micro-VCs and angels) for the person you chat with to be able to make an investment decision on their own. Give them the bylines to use to pitch to their fellow investors. Inspire them with the conclusion on the big vision and instill upon them the verbiage to explain your company to their fellow investors.

The best pitch decks allow investors to empathize with you and the see the world from where you stand. Your problems become theirs, your opportunity becomes theirs, and your growth and success becomes theirs. If you execute on these elements correctly, you’ll have brought investors along on an action-packed, suspense-filled journey, where they are eager to see the behind-the-scenes.

While materials like a pitch deck are core to a fundraise, how a founder communicates it to investors is as important. This story has to be internalized by the founders. The pitch deck and its delivery have to go hand in hand — the founder needs to believe it with full conviction and complement the story with verbal anecdotes, personality, candor, and vigor.