Frequent pitch deck mistakes
In my job I see a lot of pitch decks, and filter the best opportunities to share with partners. This has given me some insights into what makes a compelling deck, and what doesn’t. I thought it might be useful to share some mistakes I see most frequently.
Mistake #1: Poor design
Investors have extremely few signals in order to decide which companies to spend time on. They’re making big filtering decisions in a very short period of time. To put it bluntly; if someone can’t make a deck look good, there’s a high likelihood that they can’t make a product look good. This is especially true if it’s a B2C company.
Get a proper designer to create your deck, or at least go in after to tidy it up. If that’s too costly, I suspect that it’s possible to buy high-quality templates for a very reasonable budget. Spend time looking through modern design (apps, websites, slide decks), to improve your taste. Share the deck with fellow entrepreneurs, and ask specifically for design feedback.
Mistake #2: Not showing off the product.
For me, the hardest part of assessing a deck is understanding the proposed solution. Does it really solve the problem? Can it work? Will customers love it? This is a lot of mental work to process quickly.
Many decks that I see explain the solution poorly. Sometimes this is just a sentence about what they’ll do, or a table with ticks in their column and crosses in the competitors’. This is intangible, it makes it hard to imagine what you’re backing.
If you’re building a product - show the product, even if you don’t have one yet. Product investors think about visuals, and usability. They think about tangible things that they can imagine ourselves and others using.
Here’s what I’ve seen that does help to sell the solution, ordered from most useful to least:
Prototype they can use
Video showing the prototype in action
Screenshots showing the flow
Screenshots on their own
Wireframes showing the flow
A diagram showing the stages of the journey
Any of the above are better than nothing. Even the diagram will help me to imagine how it all works.
The more you can do the heavy lifting for me to understand your solution, (a) the more likely I am to promote it internally, and (b) the more I will believe in your ability to ship a great product.
Mistake #3: Not selling the size of the opportunity.
There is a crucial part of VCs that many people don’t fully grasp: the need for outliers.
Early stage venture capital has a high failure rate. This is intuitive - small companies disrupting huge industries have the odds stacked against them. VC funds are happy to accept this risk, because the ones that do break through can have an outsized impact. Uber’s first VC reportedly earned 3 million percent return - that can cover for a lot of other investments that don’t quite make it.
This means that VCs must back companies that can become those outliers. The whole model is built on stomaching losses in return for those few companies that returns the whole fund and more. The frequent mistake that I see, is companies not making an effort to show that they can be that outlier.
When starting something, founders need to convince themselves the company has a good chance of success. When investing in something, VCs need to convince themselves that if the company is successful, it will be a huge outlier. The alignment is so, so close, but different enough that many founders miss it.
Fewer than 50% of decks I see explain how big the company can become. This doesn’t need to be a full financial model; just do the back-of-the-napkin calculations. Convince the reader that it’s a huge market, your margins are strong, and roughly what needs to happen for your company to become a unicorn or decacorn.
The investor will always do their own calculations anyway, but at least this way you can lead the narrative. When I’ve asked founders about this, some have said they want to appear humble and realistic. But this is your chance to show your ambition so make sure that you take it.
**************
These are the mistakes I notice most frequently. I hope it’s useful, and let me know if you have anything else that you think should be on this list.