Some time ago I wrote about how to make a kick-ass investor deck. And while as a person with a bias to pessimism I try to avoid negative approaches, it might sometimes be useful to provide a list of don’ts to support the dos. So here you go: Top 10 investor deck bloopers.
1. The Deck Does Not Work as a Stand-alone Deck
These decks are like movies: There is a plot and they are often visually appealing. But without the soundtrack, they are impossible to follow.
Bear in mind that you don’t always get to pitch your deck. So, make sure that you have a deck that can explain itself and works as a standalone presentation.
Make a separate investor deck for review and a separate pitch deck to be presented once you know you have the opportunity to pitch.
2. Not Enough Info
One reads the deck through and…has no idea what the startup does.
This is surprisingly common. Not in a sense that the deck would give no idea about the startup but instead that some critical areas about the startup are not covered in the deck.
Give your deck to read to someone who knows nothing about what you are doing and ask basic questions about your startup. If the person cannot answer, you need to work on the deck.
3. Too Much Info
50+ pages to describe the startup? Good luck finding an investor who would even take time to read this through.
This issue appears quite often when all the technical details about the product are included in the presentation. But the deck is not about the product, it is about the startup! So one page about the product should be all it takes.
Every now and then you come across a deck that has both the problems of too much info and not enough info at the same time.
4. Just Pretty Faces
In these decks, we see a guy named Alex and a girl named Beth. Nice pictures, but no last names, no LinkedIn-profiles, no education, no backgrounds, etc. But hey, if the pictures look good this probably is a great team that has a clear vision, sharp execution, deep tech understanding, and killer sales skills.
Your team is more than just pretty faces. Include LinkedIn (as well as other professional profile) links. And make sure the profiles are on all-star-level.
5. Absurd Hockey Stick
The hockey stick (sigh). Most decks have one and as such it is ok. But when your Excel shows that in year three you break one billion in revenues, you might want to check the assumptions behind the forecast. The assumption of “entering into the Chinese market and getting 10% of it” of course shows nice revenues but might need some backing when discussing with the investors.
Make your forecasts bottom-up and check the top-down: How much resources are allocated to attracting new customers? How many customers these do efforts bring and in what timeframe? Can the market support this level of business?
6. Unreadable Deck
Font size 6, dark grey text on a dark background, challenging language…
This probably one of the saddest bloopers in this list as it has little to no correlation on how the team can execute. Due to this reason I usually try to fight myself through these decks, but every now and then I come across one that I just cannot go through in full. Many times, the unreadable decks also suffer from the too much information issue.
If you are not the most visual person, it might make sense to make the deck using ready-made templates. And get someone to read it through for fluency before sending it to the investors.
7. Decks That Are Too Big Not to Fail
“Here’s our Powerpoint. Or actually, it is a video since we decided to embed our product demo into the deck. And on top of that, we thought it might be a cool idea to use high-resolution stock images on the background on each page.”
While these decks can be visually great and the product video often useful, having an oversized deck can lead to some minor issues: 1) The investor cannot receive it (as it is distributed via email and the service provider does not allow messages above 20 MB; and 2) The investor cannot open it (since the investor is trying to open it with a cheap-o Samsung phone).
Generic stock images add no value in decks.
8. Contradictory Valuations
This is the most common pitch deck blooper I come across. Usually, it goes something like this: “Our pre-money valuation is 1.0M and we are looking 200k against 20% in equity.”
Now be clear and understand the terms: pre-money valuation, post-money valuation, and equity consideration. If you are presenting the investor two separate valuations, the odds are that the investors will go for the lower one.
Trivia: What was wrong in the valuation statement in the first paragraph?
9. Valuation in a Ballpark…of Some Different City
Every now and then the valuation just leaves one wondering. One reads the deck again to understand whether something important was missed. But no, there is nothing to substantiate the valuation.
If the valuation is in the ballpark, investors can agree on a meeting and discuss the valuation later. But if the valuation is in the ballpark of a different city, it is highly unlikely to get the meeting in the first place.
How on earth the startups claiming to look for smart money expect the investors to accept €10 million valuation on a pre-MVP startup with no prior funding established six months ago?
10. Lack of Effort
Cover, idea & contacts. That’s it. Now invest 500k.
If you don’t invest in investors, why would the investors invest in you?