Stop over-optimizing your startup pitch deck!

At one point, I had over one hundred versions of our pitch deck. My startup was in full-on fund-raising mode and jamming hard to pitch as many investors as possible.

Every one of these meetings resulted in a slew of questions. After the first few dozen, we got most of the questions squared away with more slides, new charts, and more data. But there was always one or two new questions that led us to make more changes to our deck.

At one point, I got the feeling we had pivoted from enterprise HR tech to PowerPoint design agency. We had more slides in our deck than our product had features 😂

Then one day we finally came to our senses. Pitch decks should evolve, but there are diminishing returns to the effort involved in perfecting something that cannot possibly be perfect. I deleted our directory of a hundred slide decks and picked one deck to keep.

There is no single topic that gets written and talked about more than how to put together a pitch deck. There are 17 million hits from Google, and using any of the various AI chatbots generates even more variations with wildly conflicting advice about the best approach.

Probably because of the overwhelming volume of advice out there, it causes anxiety among founders who feel compelled to build the “right” deck. One founder I was advising spent endless hours and days in Photoshop making their deck pixel perfect. This is borderline insane.

If you look early pitch decks of now unicorn startups, the one common denominator is that they are all ugly. Ok that is a bit harsh, but the more important observation is that all the decks are quite different because the circumstances and markets of each of these startups was different.

Decks do not win investors. Product traction, market potential, and team composition are the factors investors care about most, especially at the seed stage. Investors want to know whether your startup can provide a significant return on invested capital. Their questions boil down to why the market is big enough to warrant a huge exit, what evidence exists to show that you can execute your vision, and why your team is the best team to build and scale the business.

Instead of optimizing for the perfect deck, let’s invent and simplify as we like to say at AWS. The better approach is to reduce the one-off effort of customizing decks and to eliminate common mistakes that cause investors to not take your pitch seriously.

The best way to reduce effort is to simply not customize anything. Decide from the onset what story you are pitching to investors and only lead with the information that best supports this story. While later stages of fund raising you need to show detailed financials and processes to scale, early-stage investing is about conviction. Your job as the founder is to sell the vision and build conviction.

At most, you should have two pitch decks. One deck is the short, three-minute version that you use in public settings such as pitch competitions. The other deck is a longer version that you would send to investors and use for formal pitches. This is your 15 to 20 minute pitch with all of the details and data that supports your story. Anything not critical to telling the best story goes into the appendix.

The typical push back on this advice is that not every investor is the same. Some focus more on team, others lean into the market, and some prefer to dig into the product. But your job is not to convince every investor, you need investors that like enough of what they see in your pitch to explore more.

This leads to the second point, avoiding mistakes that block your startup from even being considered in the first place. Based on our experience advising numerous startups and judging at pitch competitions, here are the eight most common mistakes we see in early-stage pitch decks:

1. Investor deck is not a customer deck. Investors are seeking startups with scalable business models while customers want to solve a problem. So while we are fans of simplification and reuse, the purpose and content of each is different enough to warrant separate decks.

2. Over-emphasizing product. It's important, but product should not need multiple slides. For investors that really care about the product, you are better off creating a demo.

3. No "why now” story. Be clear why the problem is compelling enough and a large enough problem to need to solve right now because of prevailing trends or shifts in the market. You should be building a pain-killer rather than a vitamin.

4. Market size over-inflation. You cannot capture 100% of the market. Go beyond TAM (Total Addressable Market) to show SAM (Serviceable Addressable Market) and SOM (Serviceable Obtainable Market) and how you arrived at those numbers.

5. Weak competitive differentiation. State clearly what makes you better positioned to win over more established and better funded competitors. Even if you do not have a moat today, show why your approach leads towards owning a significant slice of the market.

6. Do you have the right team? The quality of talent is often the only tangible factor to evaluate for very young startups. Investors want to back exceptional founding teams. Describe why your backgrounds uniquely position you to succeed and what insights you bring.

7. Questionable statistics. Only use credible & recent data sources in your pitch and cite your sources. There is nothing more embarrassing than being called out by an investor for using dubious stats in support of your idea.

8. Using a non-business email. While not related to pitch decks, not using a business email can lead to your pitch never getting seen. If you are all-in on your startup (you shouldn’t be raising capital otherwise), then operate like a business and get a business email.

What if no investor shows interest? In your earliest pitches, your pitch is still evolving, so refining it makes sense. However, if you still get no interest after dozens of pitches, it could mean something is fundamentally wrong that no amount of revising of your pitch will fix. The problem could your idea is not differentiated, the story you are telling is not compelling, or your startup is not venture-backable (meaning it does not have a large exit potential). We will address each of these in future posts.

What has been your strategy for creating a compelling pitch deck? Did experience any major blockers or have any big mistakes related to your deck when you went out to pitch investors?

Mark & Basil

With all this talk about pitch decks, what exactly should go into the deck? Scanning through numerous blogs and advice from VCs, these are the nine most common slides:

• Problem - Define the problem and why it is worth solving

• Solution - Introduce your product and how it solves the problem

• Market - Define your target market and why it is a sizeable opportunity

• Business Model - Outline how you plan to make money

• Go-to-Market - Describe your marketing and sales strategy

• Traction - Showcase progress you have made and milestones achieved

• Competition - Identify your competitors and how startup is different

• Team - Introduce your founding team highlighting relevant experience

• Ask - State how much funding you're seeking and what you will use it for

One slide that we disagree should be included is the Financials slide. For seed stage startups and even those raising a Series A, projecting imaginary financial results several years out is an exercise in futility. More useful is sharing your burn rate and projected use of funds on the Ask slide.

If you want more examples of what good pitch decks look like, below are several posts that provide the most helpful advice and a good amount of detail to help you get started.

• Sometimes it can be daunting to figure out what makes for a good slide, so this post sifted hundreds of decks to find the very best examples of each key slide in a pitch deck.

• The quintessential pitch deck may be the one from Sequoia Capital, and this Twitter thread explains how Sequoia approaches each slide.

• Y Combinator probably has the most experience regarding pitch decks given the volume of startups they evaluate and they share their insights on building your seed deck and your Series A deck.

• With all the advice about pitch decks, having actual data to back up what goes into a winning deck that interests investors is helpful, especially since decks are viewed on average under 4 minutes!

• This post goes into more than just the pitch deck into the whole fund-raising pitch process, but it is very thorough and helps put all the pieces together.

• And finally, this startup pitch series on my old blog is still relevant today, and also vaguely interesting if you are curious how terrible my writing was back then 😅

Since posting our last week’s post on Monday, we do not have many dispatches to share this week. One awesome event Basil recently attended was the Step Conference in Dubai this past week. We also approve of the sunglasses; you need them when the startup future is so bright 😎

Mark is heading to Mexico City next week, a new locale for the Startup Advocate team. If you are going to be in town then, let’s make plans to meet in person and share some tacos 🌮

Lastly bit of news, we are reformulating our LinkedIn show and will be instead shifting to LinkedIn Live, meaning we are going full-on live video streaming! If you are hitting your startup growth stride and have something interesting you are building on AWS, let’s get you on the show!