February 4, 2021

How to modify your ‘investor deck’ to meet each fundraising stage

Written By: Tal Dekel, Allon Sasson, Gal Shefer

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We recently wrote here about the different sources of fundraising for your startup, and the relationship between the amount of money that can be raised from each of the investors and the degree of influence they would seek in return. Following the responses and questions we’ve received; we decided to try and similarly simplify another aspect of the fundraising process — what the most important components of the investor presentation at each stage of the fundraising are.

TL;DR: In most investor presentations you can find 12 main components that the entrepreneur asks and is expected to present, while adapting to the specific investor and the stage of development and fundraising stage in which the company is at the time being. However, if we divide the fundraising rounds into three stages — the end of the Seed stage, the first round (A) and later rounds (growth) — it is possible to mark four main components for each stage that are most critical for that stage, and are highly recommended to pay the most attention when preparing an investor deck.

Don’t get us wrong, reaching out to investors with only four slides deck and say you thought you could just settle for this — may perceive you as very brave, but an actual investment is unlikely to come out of it. Therefore, it is worthwhile to understand the uniqueness of each of the stages and the critical components in it, and to know what data needs to be completed and updated in the upcoming fundraising stages. For this reason, it is more proper to relate to the components of each stage as a cumulative and updated list over time and not as a stand-alone list.

For the sake of refinement — we refer to the investor deck which is usually intended for sharing with a potential investor, and not to the frontal presentation intended for pitching your startup, nor to a presentation to a potential client (which is visual and ‘story-telling’ based). In other words, a component in a n investor deck can be spread over more than one slide and include more detail and depth, but it is not recommended to load information on every slide. The presentation is a tool for the investor to filter inquiries, so it is advisable to direct questions that will arise when the investor reads about the company, in order for you to reach the frontal pitching stage, the investment committee and later the due-diligence stage.

A bit of methodology: How did we choose the necessary ingredients of each stage?
There is no single list of components that are ‘a must add’ in investor deck and the recommended number of slides usually ranges from 8 to 15. Some entrepreneurs choose to emphasize the slides that are related to the business aspects while others emphasize the solution to the problem and the size of the potential market. We chose to use the list of the most common components in investor deck, as identified by the staff of ‘Presium.io’, which analyzed 100 such decks of different companies at different investment stages. On this list we have done some add-ons and processing in the style of the recommendations list of Donna Griffit, who is known in advising startups at Silicon-Valley. Although Griffith refers mainly to startup pitching, her messages about storytelling to an investor can help here as well. At the end of the process, we’ve selected 12 repeating components to which we referred in this article.

The differentiation between the fundraising stages was relatively easy to produce. The first round of recruitment (A) is considered one of the most significant barriers in the startup’s life cycle, so much so that it has earned the nickname ‘The Chasm’, the pit barrier that must be crossed for the startup to survive and start generating significant revenues. Therefore, we divided the fundraising rounds into three groups: all the recruitments before A, the A round itself and the later growth rounds that follow.

Now that the boundaries are clear, we have selected for each stage the four most necessary components in the presentation and two “backup” components, which can help in case one of the critical elements is not due enough or the data about it is partial. For each component we present both a brief explanation, as well as tips that help to present it optimally.

Although such a division produces some abstraction, we preferred this method for two main reasons: First of all, it was important for us to show the big picture at a glance and the changes investor deck highlights as you go through the stages, so that you as entrepreneurs know what the next stages expected to be like and not just what the current stage is.

Bottom line: What have we learned from listing the necessary components at each recruitment stage?
Our choice of four critical & unique components at each stage was challenging, and was accompanied by a lively discussion , and yet, here are the five prominence insights we identified by the end of the listing. We believe this picture will help you see the insights. The critical components are marked in green and the backup components in orange:

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  1. At the most basic level, it is indeed possible to mark the unique critical components for each investment stage. As mentioned, this does not mean that the investor deck includes only these components, but it is recommended that these be the tightest slides.
  2. To be precise, with the transition between the investment stages, the critical elements from the previous stages may undergo adjustments, but additional critical elements will also be added, so it is more accurate to say that the investor deck is a collection of components that accumulate and update throughout the company’s journey.
  3. Examining the full picture makes it possible to clearly identify a ranking of components following the transition between the stages: A. In Seed phase, we emphasis on the basic components (problem, solution, market, team) without which it is impossible to kick-off.
    B. In Round A, the emphasis shifts to the business components (value, business model, competitors and opportunities).
    C. In the growth phase we emphasis on the financial data (the metrics, the roadmap, the financial figures and the breakdown of the investment required).
  4. This is not an equal random segmentation between the stages, but this ranking reflects the change in the entrepreneur’s state of mind that is expected to be noticed as the startup progresses from a personal initiative to a real business and later to a business with significant growth potential and possibly a public business. This is the point of view of investors at every stage and adjusting to it can greatly support the investment prospects. The key to showing the investor that you are in the right state of mind is not the number of slides but rather the focus and sharpness in selecting and presenting the data.
  5. And finally, the “backup” components of each stage may close the gaps to the components that have changed since previous investment stages or as a preparation for the next investment stage. This is the explanation we found for the fact that the backup components are also a critical component in the prior phase or the following.

Interested to get tips and details for each round?

To list of the necessary components in ‘seed round’ investor deck

To list of the necessary components in ‘A round’ investor deck

To list of the necessary components in ‘growth round’ investor deck

If you have additional insights that you’ve identified in regards — please do share it with us.

You can examine investor decks of hundreds of past and present startups, including companies such as LinkedIn, Google, MySQL, Airbnb and many more — click on the link here

So far for this time…