Thinking About Thinking

The 10 Slide Company Pitch Deck

Posted in Growth Equity, Technology, Venture Capital, Volition Capital by larrycheng on April 29, 2014

I love meeting with new companies.  To me, it’s the oxygen of this business and the most energizing aspect of the job.  That being said, the one thing that can take the energy right out of an introductory meeting is the obligatory 20-40 slide company pitch deck that drags on and on.  Personally, I prefer a more conversational meeting in which slides are used to launch conversations, rather than claim the entire conversation, about various important topics relevant to the business.  Therefore, I thought I’d provide a general framework for a succinct 10-slide pitch deck that should be more than sufficient for an introductory investor meeting.  Keep in mind that given Volition is a technology growth equity investor, this is more geared towards companies with some revenue and customers rather than a pure start-up.  But, I do think there are principles that are portable across different stages.

The 10 Slide Pitch Deck (in no particular order):

1.  The Problem Statement. This is the problem the company solves.  What is the problem, why is it such a high priority for whoever has it?  Why does this problem have to get solved?

2.  How You Solve The Problem.  This gets to what the company does.  Why do you have unique knowledge of the problem, how do you solve the problem, and why is that a differentiated / defensible approach?

3.  The Customer.  This gets to who the target customer is specifically.  The more detailed and segmented this is, the more credible I find it to be.  I’d rather hear, “The chief compliance officer at hedge funds with $100M+ in assets” than “financial services companies”, as an example.  Then provide examples of actual customers.  How many of those target customers out there actually have the problem you articulated?

4.  The Value to the Customer.  This gets to the return on investment.  How much does the customer have to pay (what is the pricing model), and why is it clearly worth it to them to pay it.

5.  Actual Use Cases.  Now that you’ve established the problem, solution and value in concept – let’s talk about it in reality.  If there’s only one primary use case, given an example of a real customer with a prototypical use case.  If there are 2 or 3 common use cases, let’s hear example of all of those.

6.  The Product.  This can go anywhere in the presentation, but if it’s at this point, I’m probably more than eager to see the product in action.  A live demo is always best.

7.  Competitive Position.  Who else out there is also trying to solve this problem, and why are you better positioned to succeed?  Why are you going to win your segment?  This is a great chance to talk about win-rates against competition, etc.

8.  Financial Overview.  A simple slide with historical and projected (to the degree you have them) income statement, balance sheet, and cash flows.  A couple of bullets on financing history and ownership breakdown are helpful.

9.  Other Key Metrics.  This is your opportunity to brag with the actual data that you consider leading indicators for your business.  Maybe it’s retention rate, lifetime value/CAC, upsell dynamics, customer or transactional growth, etc.

10.  Management Team.  Who are the people behind this company?  Don’t just put logos of past companies, but titles/roles, companies, and key achievements for each exec at their prior companies.  Also worth noting if there are any key hires you want to make.

Every company is different, but hopefully this provides a helpful framework to organize a simple pitch deck.  Don’t feel the need to address every sub-question with actual content on the slide.  You can always talk to the details during the presentation.  Often times, less is more when it comes to slide content.

My suggestion in terms of order is to start with the strongest aspect of the company.  If the management team is the strength, lead with it.  If the financial performance is the strength, by all means, lead with that.  If you’ve got a breakthrough product, start with a demo.  But, creating momentum in the meeting right out of the gate is always a good idea.

I’m probably missing something important, but hopefully this is helpful in getting readers pointed in the right direction.


The World of Finance Has Problems

Posted in Books, Economy by larrycheng on April 12, 2014

I have to shake my head in disappointment at the headlines this past week in the world of finance and money.  It makes me wonder why I even periodically come to the defense of the industry when in weeks like this, it seems like a fruitless exercise.  Here’s a tasting of this past week:

1.  LIBOR manipulation settlements.  LIBOR is the benchmark interest rate that impacts hundreds of trillions of dollars worth of financial contracts.  Everything from mortgages, student loans, car loans, derivative contracts, and many others are pegged to LIBOR.  LIBOR is calculated daily based on the submissions of some of the largest banks in the world.  And, in 2005-2009, it was apparently manipulated by some those contributing banks for their own personal gain.  This week, one of the chief offenders, Barclays, reached another settlement with a regulators over their behavior in this period.  How is it possible that one of the most important metrics in the global finance industry is manipulated over many years?  I guess it’s entirely possible.

2.  The stock market is “rigged” – according to author Michael Lewis.  His claim is that high frequency traders front-run stock trades all day and every day so that both institutional and retail investors alike pay what amounts to artificially expensive and manipulated prices on routine stock trades.  This is apparently legal, for now.  But, its potentially wide-ranging impact on the US stock market is coming to light.

3.  Alleged IRS corruption hearings proceed.  Claims of the IRS abusing power are came back into the forefront this week.  This has unfortunately become a purely partisan issue.  But, further information about the IRS suggests there’s potentially a bigger issue at hand than even what’s presently going through the House.

4.  SAC Capital pays largest insider trading settlement in history.  $1.8 billion is what it takes to settle one of the longest running, widest ranging insider trading scandals in history.

So, in one week, the headlines are about THE benchmark interest rate being manipulated for years, the entire stock market being rigged, the largest taxing authority in the US potentially corrupt, and the largest ever insider trading investigation being settled.  Clearly, this has not been a proud week for the world of finance.  Let’s hope better things are in store next week.