How I Read a Pitch Deck
In the last few weeks, I’ve had a few founder friends ask me to give feedback on their decks. Now, a lot of material exists online about how to make pitch decks. So, I thought I’d instead write about how I read pitch decks.
The Objective
Most of the decks I get are through cold inbounds, and that context is important. If I get introduced to any startup through someone I trust, I’m virtually certain to talk to them, and the deck is more a pre-read so that I can understand the basics of the business and have a more productive conversation. But with a cold inbound, the only decision I’m making is whether I should talk to them or not. And, I’m not going to spend more than 2 mins on that. Most founders try to explain their entire business through the deck, which is the wrong goal.
Similarly, intro emails are unnecessarily long. Instead, I’m looking for a well-written blurb, no more than 4-5 lines, which clearly articulates who you are, what problem you’re solving, what traction you have, and how much you’re looking to raise.
Now, my default position is that most startups aren’t worth investing in. This might sound harsh but it forces me to look for something that’s genuinely interesting to make me want to talk to them and understand more. That could be a well-credentialed founding team, a space that aligns with my investment thesis, or exceptional traction. However, allow me to go through all the aspects of the deck and share what I’m looking for.
Founding Team
This is arguably the most important slide with early stage investing. Some founders put it at the end but I’d rather have it up front. Some decks have unnecessarily long bios or irrelevant information. Quite simply, I’m looking for what you’ve done before that signals why you’re the right team for this – your credibility and fit.
Problem Statement
Most problem statements are explained in terms of this problem exists in this market. Instead, I’m looking to understand who faces the problem, what exactly is the problem, why the problem exists, and what’s the impact of the problem on that person’s life or work.
Solution/Product/Service
I don’t want you to just explain what your product does. I also want to understand how your product impacts the user – the before/after. Also, if you have a product demo, nothing like it.
Competition
I think this is the most forced slide because there’s pressure to present the startup as better v/s the market, which I understand. But nobody takes that 2x2 axis at face value. I don’t care much about competition in the deck, I might bring it up during our conversation to understand how you’re better v/s others solving the same problem.
Market Size
Most market slides have a TAM and a growth CAGR – the TAM is useless and the CAGR is unimpressive. I’m more interested in understanding ‘why now’ i.e. what’s changing about the market, user behavior, macro conditions, and technology which makes this the right time.
Go-to Market
This is the slide that’s missing in most decks. People pay too much attention to market and product and not enough on distribution, which is equally important. I want you to explain how you’re going to get users – what channel, what strategy, what process. I’m also trying to see if the go-to market makes sense for the kind of product/service you’re building.
Business Model
I’ve seen decks which have 5 potential revenue streams and not 1 real monetisation model. It’s difficult to build confidence on that. In case you have a selling product/service, I’d like to see the unit economics – specifically your margins after COGS, and acquisition costs.
Traction
Please do not showcase vanity metrics, and please show the timeframe during which you’ve achieved them. Once I’ve understood the business, I’m looking for your performance on the 2-3 key things that matter so it’s important to present the right metrics. Along with that, I love to see the use-cases that people are mostly using the product for. Some decks also have forecasts of revenue & profit – I’m not going to even consider them.
Fundraise
Most people present a breakdown of use of funds, which is good. But, I’m also looking to understand where does that capital gets you – so it’s good to have goals – whether qualitative or quantitative. That’s much better than 5-year projections.
The underlying theme through my entire read comes down to two important things – first is the clarity of the communication – it should be direct and easy to understand, second is specificity in everything, not vagueness, generic statements or tall claims.
The best decks communicate the most things with fewest words.