You’re reading an excerpt of The Holloway Guide to Raising Venture Capital, a book by Andy Sparks and over 55 other contributors. A current and comprehensive resource for entrepreneurs, with technical detail, practical knowledge, real-world scenarios, and pitfalls to avoid. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, over 770 links and references, commentary and future updates, and a high-quality PDF download.

Now that you understand the elements needed in the pitch deck and how you can express them through your company story, you’re probably wondering how you can structure the deck narratively. Thinking of the elements of the deck thematically is a great way to build a deck that makes sense for your story, and it can also give you more flexibility when presenting. If you rely too much on an elemental, slide-by-slide approach from beginning to end, you risk rigidity in your presentation, which can make it really hard to respond to investor questions, and can make adding in a story on top of those elements seem forced. We suggest splitting up your outline into four themes, or modules, which you can jump between when you’re interrupted. So long as each module covers the elements described below, those elements can appear in the order that makes the most sense for your story.

Module 1: Pain Point and Solution

Your introductory module should be about five minutes long. It includes:

  1. a concrete description of your customer

  2. the pain point you are solving

  3. why the pain point is so dire and intense, and

  4. crisply, what your solution is and why it relieves that pain.

Remember to describe your desperate customer—that is, someone who would be willing to pay money to eliminate their pain. In this way, you are tying that pain point to revenue and making it clear that those experiencing this pain will be (or can be) motivated to change their behavior.

Module 2: Founder and Team

Begin by focusing on your connection to your audience:

  1. Why do you understand them? Why do you have deeper than average access to so many of them?

  2. If you haven’t experienced the problem yourself, how do you know about the problem?

Then discuss how you and your team are positioned to solve the problem:

  1. What experience have you had that’s relevant to the competencies required to solve the problem?

  2. And/or what access do you have to people who can help solve the problem, who do have those competencies?

Here, you’ll include relevant past work experience that proves you can succeed in your current entrepreneurial pursuit. You might say something like: “I know at this stage it’s all about flexibility and the ability to move in the right direction based on data we’re collecting in real time. Here’s what I’ve done in the past that proves I can work in that way.” Or you might say, “My most recent experience with this…” Or, “In my last role, I was a PM, and we had to experiment a heck of a lot to arrive at X product, and that’s the kind of experience that I’m going to bring as a founder.”

Don’t wait for investors to ask this, because they might not. Make your past part of your proving process.

cautionThat said, do not give investors your resume, particularly not verbally in a pitch. Focus on one or two relevant work experiences that prove you have the skills to see this through.

important No matter how great your problem-identification and solution are, at the early stages, investors assume that you’re going to pivot a bunch of times before you get it all right. That’s why you want to prove that you are the team that can move with those shifts. Even acknowledging that that’s the case can work to your advantage: “No matter what the solution looks like a year from now, this is the team to solve this problem.”

Module 3: Data

Now you can present your awesome data, focused on your market, financing, and gained or potential revenue.

VCs get annoyed by overly ambitious market estimations, like: “Everyone has a phone. My revenue cap is in the trillions!” (One VC told us that men routinely overestimate their market capture and revenue streams, while women tend to be more down-to-earth with their numbers.)

We recommend staying conservative with your numbers, but being honest about it. “This is our TAM, and we’ve been really hard on ourselves to arrive at this.” When it comes to revenue, stick to the near term. A lot of founders will jump ahead and say, “In five years we’ll have $10M in ARR.” Remember, investors are expecting you to pivot with your product and target market at the early stages. So instead, say something like, “This is a conservative estimate of what’s possible in the near term.” Tell them what it’s going to look like when you first start to earn revenue. When you get to $1M ARR, why will that be?

Another good place to start or end this module is with your beachhead market—that is, where you find your first paying customers. You’ve already outlined an audience that’s going to resonate with your product, and within that you’re going to have the small sliver of beachhead that’s going to gravitate to you. Knowing who that population is will help you present your go-to-market strategy, which is the last thing you’ll talk about.

Module 4: Getting to Market

This is where you explain to investors how you’re going to get your product into the market you’ve identified. There is some flexibility here, as strategy depends completely on your company, where you are on the product-market fit continuum, and whether you’re an enterprise or consumer company.

If you’re an enterprise company, present your go-to-market strategy: “Here’s how we’re going to attract our first customers and here’s how we’ll leverage them.” If you’re a consumer company, you want to present a compelling viral story that will prove when and how you’ll get into the zeitgeist: “Here’s how we’re going to start connecting with people. This is our influencer strategy or why our content will achieve virality.”

Either way, the goal of this module is to demonstrate to investors that you have a plan, and it’s partly what their investment will be used for: how are you going to connect with the core audience you identified at the very beginning of your pitch?

Practicing Your Presentation

There’s no two ways about it: if you want to successfully raise venture capital, you have to devote a significant amount of time to practicing your pitch. You could send an email today and get a call tomorrow that an investor wants to meet. Do not go in unprepared.

A big part of the purpose of rehearsing is that it gives you flexibility. You will be interrupted in a pitch meeting. Hear us: you won’t make it to all of your slides! But if you know the material frontward and backward, you can move around within that material depending on the reactions in the room and the questions you get asked. Improv classes won’t help here. There is nothing more valuable you can take with you into a pitch meeting than preparation.

Getting Started

You’re reading a preview of an online book. Buy it now for lifetime access to expert knowledge, including future updates.
If you found this post worthwhile, please share!