The pitch deck is just one aspect of the broader fundraising process, but for founders aiming to entice investors, it’s the best way to communicate their startup’s progress and potential.
The decisions founders make regarding what to include on those few slides can be the difference between a quick pass or a first check. As the venture capital market continues to boil over and investors find themselves reviewing more deals remotely across different stages, there’s added need to drill down into the basics for their first look inside the company.
To get an insider’s look into the process, I chatted with Pilot CEO Waseem Daher. Last month, his bookkeeping and financial tools startup wrapped a $60 million Series C round led by Sequoia, bringing the company’s total funding to just north of $118 million. We discussed the different approaches he has taken to crafting the company’s pitch deck to showcase what he knew potential investors were most curious in, something that shifted over time as the company hit new milestones.
Daher took me on a tour of his company’s Series C pitch deck (embedded below) and described the decisions he and his team spent the most time considering as they crafted the deck. During the discussion, he broke down some of the key questions investors ask at each stage and touched on many of the proof points that VCs have started paying more attention to.
“If the Series A was about, ‘Do you have the right ingredients to make this work?’ then the Series B is about, ‘Is this actually working?'”
“If the Series A was about, ‘Do you have the right ingredients to make this work?’ then the Series B is about, ‘Is this actually working?'” Daher tells TechCrunch. “And then the Series C is more, ‘Well, show me that the core business is really working and that you have unlocked real drivers to allow the business to continue growing.'”
What are investors looking for?
Seed
- Key investor question: Is there significant potential?
- Proof points to consider: Total addressable market (TAM), team.
Series A
- Key investor question: Is there proof of product-market fit?
- Additional proof points to consider: Annual recurring revenues (ARR), cash burn.
Series B
- Key investor question: Is the flywheel working? Will you be the market winner?
- Additional proof points to consider: ARR growth, net retention, market share.
Series C/D
- Key investor question: Are the unit economics compelling?
- Additional proof points to consider: Gross margin, lifetime value (LTV), Customer acquisition costs (CAC).
IPO
- Key investor question: Will the business generate significant cash flow?
- Additional proof points to consider: Free cash flow (FCF), FCF margin, average selling price (ASP) growth, category expansion, earnings per share (EPS).
Check out the full pitch deck below from Pilot’s most recent raise (with illustrative data swapped for actual financial metrics).
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The deck will evolve over time as your company grows more successful. Customer testimonials are an essential slide, Daher maintains, noting that “if you have customers who are evangelists for you, it accelerates your growth and if you don’t have people that are passionate about your company, your company is doomed.”
The key is building a narrative of success that aligns with the numbers, something that can be easier said than done, but Daher says it’s also important to get ahead of potential pitfalls and address them head-on rather than wait for an investor to take notice. “You have to own it, because if you don’t, their conclusion is probably going to be worse than your conclusion,” Daher says.
Daher talked about adding in slides at different stages to reflect what investors were likely most interested in, but in Pilot’s case he said there was also plenty that has stayed consistent since the beginning, including slides talking about the market opportunity, the unique facets of the specific market they were looking at and the company’s position to win it.
“When you have 15 or 100 customers, the business fundamentals aren’t what justify the investment,” Daher says. “What justifies the investment in the Series A stage is like, okay, convince me that there’s a large market, convince me that you’re the team to solve it, convince me that this is the product to solve it.”
While some communications firms specialize in helping craft pitch decks, Daher says that he’s always taken a pretty active role in crafting the messaging alongside co-founders Jessica McKellar and Jeff Arnold.
“We sat in a room and were like, ‘Let’s try to tell the story,'” he says. “There are boxes that you definitely want to check, but I don’t think you can outsource the creation of the narrative.”