Thousands of pitch decks and only a handful of winners. Such is the math of the VC industry right now, what with an explosion of startups and dreams of glory launching every year. VCs are overwhelmed with pitches, which means that crafting the perfect deck and connecting with a reader in the few seconds you have their attention is critical.
So what do you do to build a deck that can’t be ignored? To answer that question, we assembled a group of three exceptional venture capitalists on the Extra Crunch stage at TechCrunch Disrupt 2021 who have probably read more decks collectively than any group of humans should ever be expected to. Mar Hershenson is founding managing partner at Pear VC, Mercedes Bent is a partner at Lightspeed and Saba Karim is the head of global startup pipeline at TechStars.
In our discussion, we covered what’s changing with pitches as the world moves toward a hybrid in-person and virtual pitch model, discussed how deep tech startups should think about pitches, and then we wrapped by exploring how each panelist reads decks — and what that portends for founders who don’t want to be ignored.
The changing nature of reading pitches in 2021 and standardizing formats
We got right into the crux of the matter at the top of the panel: What does reading pitch decks feel like in 2021? For Hershenson, there’s just always more under the sun:
I would say the volume of pitches that we receive has increased and continues to increase at some form of exponential rate. For us, we have to become far more efficient at sorting and reading through these decks. The actual reading of the individual deck hasn’t changed, but the rate and volume have increased dramatically. (Timestamp: 1:01)
Bent noted that the bar has gone up for the quality of decks that she reads.
The decks are getting better and better in terms of design. I think more and more people have realized that the visual representation of your deck is just as important as the material and the content that’s in there. There’s these instinctive milliseconds that an investor looks at your deck and almost makes a snap judgment about whether it’s even in the realm of something they want to look at it. Unfortunately, it shouldn’t be like that, but we’re human. So I’m seeing decks that are super polished, and I don’t know where everyone is getting these great graphics from, but they’re amazing. (Timestamp: 1:48)
Most pitch decks are based off templates, and therein lies a key trade-off: How much should you rely on a template versus being “original,” but different and perhaps harder to read? Karim noted that sometimes originality can pay off:
The best pitch deck that I got in a different format would be from a company that recently got into TechStars — it was actually a podcast version of their pitch deck that had my face on it. I went into Apple Podcasts and it said, “Hey, Saba, here’s my pitch.” That was amazing! But the second or third time that happens, it might not be as impressive because I’ve seen it before. (Timestamp: 3:41)
Hershenson pushed founders to consider keeping to the standard templates because it can help VCs focus on what makes each business unique.
For us, having the pitch in a format that we are able to consume in an efficient way is super important. There are a lot of templates online, we all know the key points that need to be hit on in a deck. So your job as a founder is to hit those in a deck of 10 to 15 slides and kind of do the hard work of synthesizing your business in a short format. I think you can be original, but sometimes being original is to your detriment.
I can tell you my own story. When we were first fundraising for Pear, we decided we were going to be really original: We’re going to use Prezi to send decks to LPs. And that was just totally the wrong call, because it’s almost like, “What did they just send me?” (Timestamp: 4:29)
One of the interesting dynamics that has shown up in the last year has been the rise of Notion as a form for fundraising. Responses from our panel were muted. Hershenson said Notion isn’t an excuse for not being succinct.
I think the problem with Notion sometimes is that people don’t remember that there’s also a limit on what you should write on Notion. They have to keep in mind that 10 to 15 slides is not that many words. So they tend to be very long and hard to consume, but not always. (Timestamp: 5:39)
Bent appreciates the Notion model a bit further into the fundraising process.
Like Mar said, Notions can be super long and wordy and in-depth. And so when I’m on my first scan to just figure out if I am going to take this meeting or not, that’s probably not the time for a Notion. That’s a quick pitch deck.
What I really like is, actually after I’ve had a first meeting, and now let’s go into deeper diligence, then a long Notion of 10 pages or 15 pages can help me understand the next phase of my diligence so much better. So I really like when I get those a little bit further down the funnel. (Timestamp: 6:17)
Karim thinks that founders can sometimes miss the point by focusing too much on format.
What founders forget is the goal of the pitch deck is just to get the meeting, and the goal of the meeting is to then get the additional interviewing meeting. And then to get to due diligence, and then get the check. The pitch deck is just the entry point to everything that happens afterward.
Really, it just comes back to “I know what I like, and I want to see more of that.” And the design doesn’t matter as much. (Timestamp: 7:28)
Rather than inventing more formats, Bent said the goal should be to personalize the pitch.
I think the best originality is two sentences at the very beginning of your email about why you wanted to specifically speak to that person. (Timestamp: 9:07)
As for one-pagers, Karim thinks that folks should just avoid them.
I used to love one-pagers. And then I found myself automatically instantly going, “Can you send me the pitch deck anyway?” It’s one of those things where it’s really good for certain scenarios, but then the next step — I’m always going to need a pitch deck, at least in my experience. (Timestamp: 10:22)
Also avoid deck animations (someone actually asked about those — why?). Finally, Bent prefers minimalism in design.
I think simplicity is always the best. The faster and most simple way you can get across your narrative, your story and why you’re different, the better. As for colors — I actually don’t care about it; it can be any color scheme. I mean, there are brighter colors that sometimes catch my eye, but it doesn’t make a difference about whether or not I take the meeting. (Timestamp: 19:57)
Finally, some more tips:
- PDFs always have a slightly better chance at being read since they are available offline.
- Good design is not a substitute for a bad business.
- Video pitches are becoming more common, but keep them extremely short if you do them. They should still come with some details in text as well.
- Should you pay $50K for your pitch deck? Yes, why the hell not?
- Six things venture capitalists are looking for in your pitch
- What to expect when pitching European VCs
Pitch decks for deep tech startups
Christina in our audience asked about how pitch decks should change for deep tech companies, where technical risk is a large component of the investment decision.
For Hershenson, the pitch should be less about the technology (she recommends reducing it down to a single slide) and more about the market.
I’ve done a bunch of deep tech stuff, and I think for me, ultimately, it’s all about market. It takes a lot to get one of these biotech companies or semiconductor companies to work, so the reward has to be really big, right? So you have to be able to connect not only what you’re doing, but what market it unlocks and how big it’s going to be.
I want to see that in the initial pitch more than whether you have the technology working. If the market is big, then we can go back in the follow-up meetings to figure out if it’s worth putting more money than, say, a software company to play. (Timestamp: 15:28)
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- Deep tech VCs on what they view as some of the most impactful young startups right now
- What do we mean when we talk about deep tech?
How investors read decks
I wanted to get our audience a look into the heads of our panelists and how they read decks. Habits were all over the place, which just shows the level of heterogeneity in venture capital today.
Bent reads them in groups.
For me, I prefer to batch them. I think there’s a lot of context-switching in VC, and for the most part, I’m on calls from 8 a.m. until 6 p.m. every day, and it’s hard to constantly switch from being in conversation mode to start flipping through a deck for 10 minutes if a call ends early. So for me, it happens a lot in the evenings and weekends, and if I just happen to have time otherwise.
I prefer reading pitches on my desktop just because a size 11 font is too small these days; my eyes have gone. At the same time, I do look at them sometimes on my phone, but I always turn my phone sideways, and then I’m trying to scroll through. But it’s just easier for me to type a reply email on desktop as well when I’m batching them. (Timestamp: 26:27)
Hershsenson batches similar to Bent, but at the opposite time of day.
I do it in the morning, as I’m a morning person, and I batch as well. I use my big screen, I split it in half so that on one side is my email client and on the other side is the deck. As I’m reading, I try to close the loop at that point. (Timestamp: 27:37)
Karim reads decks in far more circumstances.
Well, I’m a terrible human — I read everywhere. I read them on my phone, in bed. We get really inspired by really great ideas and founders in the businesses, and I have no limitation. (Timestamp: 27:58)
So once that deck is read, what happens next? That depends on the firm, but it’s almost always just securing a next step.
Bent said that for her, it’s usually a short meeting.
For me, I’m not necessarily forwarding them to other folks internally. It’s kind of like, if I respond, it’s because I want to do the meeting. So actually, the “No’s” take up the vast majority of the time as I go through decks. The “Yes’s” are very short, quick — I just reply and start scheduling immediately. The “No’s,” either it’s not a fit or if it is something that’s right in the sector, I’ll try and give a little bit more explanation of maybe why I’m passing, because I think that’s helpful to founders.
After that, I’m taking a first meeting, normally 30 minutes trying to figure out if it’s a good fit for continuing on to future diligence. And then second meeting, third meeting, meet more of the team, and maybe potentially come in and pitch to the full partnership. (Timestamp: 29:56)
Karim noted that since he heads pipeline, approaching him is slightly different.
When you’re targeting a principal or a scout, or the head of pipeline like me, I am just looking for the next step of how I can help you. It’s figuring out who to route that to — hence, pipeline manager.
The most exciting thing for me is when a friend follows up, almost like an SDR, and says, “Hey, Saba, I emailed you last week. I know you’re probably busy, but just following up. Here’s what we’ve done in the last week.” That is amazing, right? That is progress showing me that they were definitely targeting me, because I get a lot of cold email, which I love as well. They showed me more reason why I should talk to them. That nudge is a game changer. Communication, building that rapport is, I think, the most important part. (Timestamp: 31:10)
On the latter, Hershenson noted that she has just one thing in mind when reading pitches.
When I get a deck, I’m always thinking, “What do I have to believe for us to get to a ‘yes’? There are typically one or two things that you really have to believe. Sometimes, if I’m just drowning in work, I will just send those questions to the founder ahead of time and see how they respond. (Timestamp: 32:35)
Finally, we talked about how much data and analytics to share while pitching. Hershenson loves more of it.
I can tell you from a seed perspective, I personally love data-driven CEOs. So if you talk to me with numbers, you will look really good, right? When I ask for additional data, maybe retention or something, and the founder gets back to you immediately with, “Oh, this is what it is,” I’m like, “Wow, great! This person is running their business with numbers, right?” (Timestamp: 34:57)
Bent emphasized that speed was key.
I completely agree with Mar. I think people have to remember that for all sales processes, time kills deals. I used to think data rooms were more for growth rounds, but it’s such a competitive environment, you need your data room — no matter how robust it is — with even Series A raises.
If people really like what you’re doing, then they’re going to ask for it right away. The faster an investor responds to you after that first meeting — if they’re responding within 24 hours, they’re really interested, and they want to move it along fast, in the next week or so. And so you don’t have a week to prepare. (Timestamp: 36:07)
As a final send-off, she noted that she prefers spreadsheets so that she can do her own analysis on the data rather than just looking at pre-selected charts by founders.
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- How Retail Zipline’s Series A pitch deck ticked every box for Emergence Capital
You can read the entire transcript here.
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