> No money raised means companies are forced to surive on revenue
The statistically recommended pitch deck breakdown:
The original FaceBook pitch deck, including a keg stand:
1) Social proof
2) Significant Traction
That's it. In fact I'd go as far to say that without either of those, you won't get funded period, except through lucky angel connections. In fact I can't think of a case of something getting funded without one of these.
Social proof is typically something of the form of the founders being 3 PhDs in something hot from insert-top-school, or there's a co-founder with a previous successful exit, or there's a top notch advisory board of semi-famous or at least provably successful people. So when Mr. VC throws his money at this startup, hey it's in the hands of the best.
Traction is the other option, and is the typical desired hockey stick graph of users, revenue, deals, whatever. The traction metric often maps really well onto software startups specifically, because very limited labor and capital can lead to real results. Meanwhile for larger enterprises that require legitimate development and manpower to get traction - it's going to be tough to show traction before you have the resources to deliver something. So something like a "nuclear power startup" (which YC has funded for instance) would probably rely more on social proof.
It's a tad disheartening because it makes something like non-consumer hardware a very difficult spot to be in if you're a younger entrepreneur. Maybe an incubator/accelerator (plus personal savings) can get you on the order of $100K, but that's often not enough to prove real traction. And unless you have significant social proof (often not the case for a younger first time founder), then it seems you're going to be stuck in a vast fundraising chasm between $100K and $1M, e.g. between accelerator and seed financing.
In particular I'd be interested to hear people's take on hardware startups in this respect. Consumer hardware has the recently developed option of crowdfunding to bridge this gap. But what about industrial hardware, like a piece of smart machinery, or something in robotics that isn't a sub-$1K developer kit? Maybe then traction looks like a big deal or two that the crafty entrepreneurs are able to hustle.
Anyways, good overall deck template but I don't think people should be under the impression that a good deck is a huge piece of the puzzle. It's social proof and/or traction, plain and simple.
that's a bad thing?
"For every buck you give us, we will give at least two bucks back next year."
You take this extortion because the benefits are ludicrous. "If we get EBay into every country before anyone else, we make silly money" or "We need want <mumble> million to make <mumble> billion in the next few years." The hardest part to get investors to understand that exiting in two years with only a 3x return is still a win.
Not for traditional VCs it isn't.
As a rule of thumb, 90% of the startups they bet on will fail outright, and simply burn through the investment.
If you're looking to raise, you need to convince them not only that you are in that remaining 10% (ie, those that will generate any revenue at all, let alone profits), but that you're going to generate massive returns to way more than subsidize and justify all the other losses. Pitching VCs with "3x in 2 yrs" is saying you are not what they're looking for.
(That said, it'd be a huge success from a business mgmt perspective.)
I recently heard a VC say that this was true back in the 90s but not so much today — that they're looking for singles, doubles, and triples as much as they are for grand-slam home runs.
Would you take a risk-free 70%/yr return? Of course you would. Every damn time. But you can't know if the investment is risk-free.
AKA that is likely to be highly unprofitable, insanely stressful, and only more capital intensive for potentially years to come.
I think that PG does an outstanding job outlining this model for growth in his
"Startup = Growth" essay:
Unit economics - what it'll take to make this work with healthy profit margins? This is crucial in case of online-offline startups, infra heavy products, or hardware products. May not be critical in consumer startups until they start monetizing.
Bottoms-up analysis of market - what will be your CAC (cost to acquire customers), ARPU/LTV (avg. rev per user/lifetime value) etc.
Both of these things are quantifiable and it'll answer an important Q - how much money will it take for the biz to reach whatever milestones that are decided.
And founders who do this exercise really set themselves apart as they know their business and gives strong signal to investors. Moreover, investors that I've spoken to often talk that they fund startups not only based on growth, or existing business but also ability to raise next round.
Directionality rather than absolute value.
Dark Theme: https://goo.gl/tcLkWY
Personally though, I found the original version to be more presentable.
Perhaps that's just me.
Bright yellow background.
What were you thinking?
Yellow stands out from other colors, and with the support of other lively colors, it can spark one’s creativity while invigorating one’s spirit. In fact, people who suffer from mild cases of color blindness can usually see the color yellow more easily than other colors.
The opposite seems more true: insufficient revenue means companies are forced to fundraise.
Are there any investors that will take a look at the plain deck and think it is highly unprofessional, turning them down?
I like that YC don't care about the fluff. But I do wonder how "other" investors feel about it.
If there's a (little) design touch it doesn't hurt either.
Color, layout, can all be used for good effect as long as it's not over done or distracting.
I think YC's stealthy AI is finally on to me..
Our instincts tend to be all wrong. When making general statements about a business, most try to make the most general statement possible. Otherwise we feel like we're selling it short. It's like when people write resumes. All trees, no forest.
That's why "X of Y" is so common, it's a formula to get past your bad instincts to a better, less accurate abstraction.
People are bad at going to abstraction without passing through specifics. If you'd never heard of jobs, it'd be hard to explain without examples. Fireman would be easier. Policeman would be even easier after that. Once we have two, the concept of job gets easier. Starting from the abstract... we'd be talking about, wages, specializations, uniforms, sick days... hard.
Case in point here, can we see this deck for an actual startup or startupses? It'd be easier to grasp the good/bad points in context.
Would be really great to remove that description, no one should lionize that behavior.
My point was that joking about that kind of culture is not a good thing and proliferation of the sleepless founder/employee/programmer that permeates startup culture is a bit ugly.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me."
If you need any advice, feel free to ping me.
We focus on exactly the types of things you're mentioning, but we try to automate it for those who don't have the design skills (or time to invest even if you do have design skills)!
The shorter answer is that we don't have any ML in production at the moment, but we will as we grow. The core of our product is similar to video game enemy AI.
"design" is such a vague term. In 99% of the cases the meat of the pitch is much more important than design, at least because of the thinking process that needs to lead there. Making beautiful decks without substance is going to be the risk if you hammer that kind of message, because there is always going to be more time you should spend on perfecting your pitch that will be taken by trivial design details. By going with very simple decks (little text, spare visuals, very few colors if any), you remove the risk of "bad taste" and this enables you to focus on everything else.
Blindly pitch investors random ideas then build whatever they fall for.
Now if a different template making company had a version that was exactly the same in every way but included machine learning, suddenly it's a no-brainer (literally: no thinking required.) The fact that I would invest just shows how effective that template would be.
The above is a very real thought process. If you want a real template, litter it with the buzzwords you need. In 2018 that is AI/machine learning, and for at least a few more months, ICO and blockchain.
Is this the case?