I write blog posts to educate founders so that they are better equipped to succeed. To be honest, I get bothered when I see “education” that doesn’t really teach. Case in point, much of the writing about pitch decks that have successfully raised money.
Sometimes founders raise money with a bad or very mediocre pitch deck. When you start researching “Great pitch decks”, you’re bound to find a number of links where people will show you decks that went on to raise money and proceed to tell you why they like those decks. The implication is that if the company was successful in raising money, then the pitch deck must have been a good pitch deck.
I have a few issues with these types of “helpful” posts. First of all, the logic is flawed. It assumes that the pitch deck is the reason why the founders were successful in raising money. Secondly, it actually does a disservice to founders who go on to model their pitches after these “great pitch decks” without understanding the real dynamics of why the funding round was successful.
Sometimes it’s not the deck
The truth is that if you created your deck to be exactly like those decks, you would likely not raise money the way that they did. Some of the decks that have been used to raise money were not great. In those cases, there were many other factors that led to a successful fundraise.
Despite the fact that I help founders put together pitch decks, I want to make sure that founders understand that the deck is just one part of the fundraising process. While a great pitch deck goes a long way to helping you raise investor capital, don’t assume that all successful raises came from great decks.
With luck, these “spotlight” posts will not only teach you something about how to create a good deck, but will also highlight some of the other factors that will help you raise your capital.
Let’s start the Pitchdeck Spotlight Series with one of my favorite examples: the Buffer pitch deck that was used successfully for their angel round.
This is the deck that founder Joel Gascoigne and co-founder Leo Widrich used when they were raising their $400k angel round in Q4 2011. They ended up raising $450k from 19 investors and have gone on to build a business with 80k paying customers, $7mm cash in the bank, and an $18mm ARR the end end of Q2 2018.
Their deck was just “OK” and could have been much better. I’ll walk you through their deck, highlighting the good, the bad, and the “meh”. But before I do that, let me take a moment to talk about the things that they did that were the real reasons they were able to raise money. If you can do any of these things or have done any of these things, the importance of your deck goes way down.
- They went from concept to revenue in 7 weeks (first paying customer 4 days after launching their MVP).
- By the time they were ready to raise money, the company had an ARR of close to $150k+ with just 2 people.
- They had users and fans of their early product that also happened to be angel investors.
- They had well known and well-respected people as advisors and evangelists who were helping them network and improve the product.
- They used their early success to get lots of positive press.
You might already be starting to see why their pitch deck didn’t need to be stellar. They were raising with clear product/market fit, a growing user base, paying customers, and fans. Those things do a lot to de-risk any venture in the eyes of an investor.
Getting paying customers in 7 weeks helps… a LOT
How did they get to paying customers in just 7 weeks? There’s a great article in The Hustle that describes how Buffer used Eric Ries’ Lean Startup principles to validate the product before he built anything. In a nutshell, they offered the benefits of the product to their target audience to see who was interested enough to want to know more about their plans and their pricing (there was no product yet). They let visitors know that the product wasn’t ready and collected emails from people interested in seeing the product when it was ready. After seeing strong initial interest, they added a step to see if anyone would click on the “buy” button to pay for the product (there was still no product). It was only after getting a few people to click on a pricing option that Joel started building a “real, functioning product”. At this point, the company was still just Joel!
Four days after launching his MVP, Joel had his first paying customer.
At that point, Joel brought on a co-founder, Leo Widrich, to help with community and marketing. Rather than geek out with adding features, they interacted with early users and used feedback to improve the product. They bootstrapped until the company was doing well enough for them to pursue Buffer full time. They applied to and were accepted into Thomas Korte’s AngelPad Accelerator, where they picked up Thomas as their first investor. Thomas introduced them to other investors and advisors. They were off to the races…
Leo wrote a piece in the Buffer blog about their fundraising process that’s a great read. It focuses on their 19 investors and how they met each. There are a few things that are important to note in the post.
- A few of their investors started off as paid users of the product (e.g. Jay Baer, Adii Pienaar). Users understand the value and benefits of your product. They don’t need to be sold on utility, just on you.
- Many of the investors were introduced by other investors (e.g.Jim LeTourneau, Peter Bordes). Be the sort of people that your investors will want to introduce to other investors. Be likable, coachable, and obviously committed to building a business.
- Many of their investors were heavy social media users (e.g. Dharmesh Shah, Harvey Brofman) who, even if they were not using the product, had personal, first-hand experience with the problem Buffer was solving. Connecting with investors who “get” the problem reduces the burden on your presentation and deck.
- A few of their investors started off as advisors or mentors (e.g. Gokul Rajaram, Keval Desai). When selecting accelerators to apply to, remember that the involvement of the active advisors is a huge differentiator.
- They developed close relationships with well connected and respected people in tech (e.g. Thomas Korte, Guy Kawasaki, Hiten Shah). Make great relationships and impress the right people.
In short, Joel did so many things right, that the deck wasn’t a huge factor in whether or not he got meetings or investments. And not only did he do a lot of things right, he did it in an incredibly short time frame of around 3 months from the time he and Leo started fundraising.
So before I review the deck, what should be your key takeaways?
- If you join an accelerator, choose one with great advisors and a strong reputation, and that can be your first money in (AngelPad invested $120k).
- Engage your users when you start to raise funds. You never know if you have an angel investor who already loves your product.
- Don’t be afraid to ask anyone in your circle (mentors, advisors, investors, etc.) to introduce you to other people.
- Look for potential investors that already experience the pain you’re solving.
- Hustle
- Focus on building a product people will buy, then sell it. Don’t waste time adding features before you launch.
- Remember that great traction will always beat a great deck.
But was their deck any good?
With that said, you can still learn a lot from the good, the bad, and the “meh” from their deck.
Here is my slide-by-slide opinion of the deck and what you can learn from it:
Cover Slide: “Buffer”
There’s not much to say about their cover slide. It’s a “meh”. Generally, you want to set the stage for what’s to come and create some anticipation. Feed your audience’s curiosity a little. Perhaps something like “Social media on Your Schedule”, to hint at what was coming. Also, you can include your name and title as a quick self-introduction.
Slide 2: “Social, the most important trend”
The slide about social media doesn’t contribute much. It doesn’t tell us anything specific. It doesn’t really engage us emotionally. It doesn’t suggest a problem. It just says “Social is big and getting bigger”. This slide could have been used to talk about why a growing social media market creates problems or opportunities.
Slide 3: “How do you use social to drive traffic?”
I don’t know what the speaker said when this slide came up, but this is a potentially strong opener. It creates an opportunity to discuss both the opportunity and the problems of social media marketing. The use of few words and large type means that the audience doesn’t have much to do other than listen to the speaker. I like that this slide says “you” to bring the audience into the story.
Slide 4: “Queue your updates”
This is another slide that could be good or bad depending on the script. While I’m not a fan of the headline, I’ll imagine that the speaker used the previous slide to talk about how there were good times of day to post to social media to optimize engagement, how you wanted to spread your posts out rather than have them bunched together, how you might want to coordinate a campaign over a series of shares. If that’s the case, then this slide would have been a good “solution” slide.
Slide 5: “Traction”
The traction slide is one of my favorites in the deck. It shows that Joel clearly understood that his strongest asset was proof that his product had an audience and that he and Leo were capable of executing. What’s great about this slide is that they didn’t try to crowd the slide with too many bullets and the bullets they did include were the ones that validated their product and would be important to investors. The little green graph line in the back created an emotional sense of growth without needing to include numbers.
Slide 6: “Milestones”
The Milestone slide doesn’t appear to add much new information, but a great script here would have been powerful. I can imagine the speaker saying something like: “We went from launch to a $150k ARR in 10 months. This month we will launch an API that will integrate Buffer in 50 apps and double our ARR in the next 90 days. In 2012, we’ll scale from 100k users to 1mm users…”
Slide 7: “Business Model”
The Business Model slide is pretty basic and could have been stronger. Of their 3 bullet points, only the freemium to paid conversion rate is good. They could have worded the “cost to acquire/LTV” stat much better and the revenue projection was on the previous slide. What’s actually missing here is a Go To Market slide to talk about how they will acquire those free users. It’s possible that they presented the GTM plan verbally while this slide was up.
Slide 8: “Social Media Landscape”
This slide feels completely out of place, but without hearing the pitch, it’s hard to tell. At this point, they’ve established that people are adopting and paying for their product. Today, this would have been where you would show the market potential. This slide seems to be attempting to do that, but with vague information. The audience doesn’t have a way to connect the traffic info with things like “potential users” or “potential revenue”.
Slide 9: “The effect of Buffering”
I love this slide but for all the wrong reasons. It appears that Buffer sent out a press release where they released the results of analyzing their user data. Those results said that their app increased clicks on links by 200%. That press release was used in an article in ReadWrite in August 2011 and the statistic from Buffer was included. Then Buffer uses the statistic in their presentation, citing ReadWrite as the source. They made internal information look like external validation. Yikes!
Maybe it’s cheesy and a little transparent, but I thought it was clever. That said, beware clever tactics. If it’s seen as an attempt to mislead, it could blow up in your face.
Slide 10: “A sharing standard”
This slide is in the completely wrong place. Earlier they mentioned 50 integrations. Now they have a slide with 6 integrations. The integrations piece could have been much more effective and should not have been split up like this. Not only is it split up, but they don’t even mention the 50 here. This feels like a step backward.
Slide 11: “Competitive Landscape”
This is my least favorite slide. Please do not lay out your competitors like this. This layout shows a ton of competition and doesn’t clearly show why Buffer is differentiated. It shows industry giants and doesn’t even hint at why they won’t eat us alive. It’s crowded and confusing. The audience will get sucked into trying to decipher what is going on here. Moreover, this crowded competition slide comes on the heels of an absent Go To Market slide and a vague Market Size slide. No Bueno.
Slide 12: “Team”
Joel and Leo were a 2 man team, but they included the info that mattered and used the team slide to remind the audience about their traction. Bravo. If you have great team backgrounds, use those. If your team has executed like crazy, this is a great way to go. On top of that, they had real relationships with recognizable advisors and they had actual investors. This was an important slide and they nailed it while keeping it simple.
Slide 13: Closing slide
Their closing slide with just an email address was another “meh”. Remember that this is a slide that you can often leave up when you are finished. Why not use the space to remind the audience about your highlights? I generally advise clients to end with 3-5 bullets with your strongest assets. In this case, I would have had bullets with some of the same info they included in the Team slide. In fact, I think the Team slide would have been a better closer than the email address slide.
What are the Key Takeaways?
- Design matters less than content
- The script can make or break your deck
- Emphasize your strongest validation points
- Don’t be vague or try to be clever
- Leverage your advisors for introductions
- Interact with your early users and let them know when you are raising money
- Find investors that “feel” the problem you are solving
- Focus on executing and traction. It will help you more than a pitch deck.
