When introducing a startup company to a VC, I observed that the startup failed to attach a pitchdeck in its reply to the VC. I commented to the startup that VCs receive hundreds of business plans a week, many unsolicited. The introduction only helps to differentiate the company from the startup“noise”, but it does not excuse the company from providing the VC with the pitchddeck in order to determine the viability of the business.
Then, as a followup discussing the pitchdeck, I also added to make sure that the pitchdeck contains the appropriate format and does not include errors and omissions. Otherwise the startup will lose the advantages provided by the introduction for the right opportunity. And everyone knows that opportunities are finite and not renewable.
Pitchdecks are the introduction for a company and must be perfectly prepared. In my NYC experience, I have witnessed that the investment banks have many internal experts supporting their “pitchdecks”. One former Blackrock executive related to me that she was in charge of the appropriate “blue” background. I have discovered expert Powerpoint engineers, inhouse business writers all employed by investment banks and hedge funds. So these firms make sure that whatever marketing teasers or pitchdecks presented to investors will be flawless.
Mind you that many VC directors began their careers on Wall Street and have viewed many pitches on the Street.
Then the other side of the coin I have heard recently, I don’t have the money to pay for those services. Lawyers demand and receive retainers, accountants expect their fees. But a critical ingredient to raising capital is not considered worth investing in. Then, why do all Wall Street firms invest millions for staffers to do exactly that? Maybe because their experience have proven that badly prepared collaterals will not generate investors’ confidence in the deal. The opposite would mean being “pennies wise, pounds foolish.” And that philosophy applies to investment banks all the way down to Angel investors.
I myself have observed the differences on why pitchdeck quality matters. One NYC fintech company, Azygo, had been searching for investment for over a year. It had had zero presentations even though it held a patent. A NYC VC firm asked for me to visit them and see what was wrong. I first reviewed their pitchdeck and found it wanting. I rewrote their pitch deck, and a week later, they were invited by a Boston VC firm. One ecommerce pitchdeck prepared for a Los Angeles IT startup raised almost ¾ of a million dollars after reviewing my pitchdeck. But these pitchdecks must be written in a specific format, include financials, and tell a good strategy and product for the investors with a persuasive story line. The key lines must include a value proposition with enough details to describe value and executions. Otherwise that pitchdeck will not work.
Without this persuasive document, the pitchdeck, I don’t bother any potential investor. Why would I bother them without that collateral? The VC must have that document in front of them to begin discussion. Now there are countries where only the intros play an important role for attracting capital – in Russia, any intro by its President Putin must certainly bring in the beef. I have noticed that VIPs in China have considerable clout. But this is U.S.A., and your pitchdeck is of paramount importance to begin the discussions for raising capital.