Founders make these mistakes all too often, without realising it.
I’ve mentored hundreds of founders, through various programmes, over the last few years. On average, I review 30 decks a week. The first thing people ask me is - can I help them raise funding. I can’t answer this until I understand the business. Our first session is usually spent getting to know the business and the founder. On average, I spend about two hours doing a thorough pitch scrub. For those who don’t know what a pitch scrub is, it’s a slide by slide run through where I review every single slide and look for data symmetry, listen to the founders story and inspect various other aspects which angels and VCs are interested in. Usually by the end of the sessions, we have a clearer idea of where the business is and possibly also whether it’s scalable. There are many reasons VCs and Angels may pass on your business, and I will share some top rated PITCH KILLERS I see, more often than I would like, from decks I have reviewed.
Reverse Execution
Build it and they shall come. Too many founders run off and build full-blown solutions without understanding what the customer problem actually is that they are trying to solve. When they take him back a few steps, to do proper customer validation, many find themselves in the predicament of having a wonderfully build solution but no paying customers. There are many founders who believe that they first market and continue hurling down the track in vein to make it work. Others stop, research, identify the problem, quantify the problem, and then pivot.
Knowing The Market
When reviewing the market sizing I find that most founders do a top down approach of TAM, SAM and SOM. Whereas, this is a valid approach, is a lazy way of doing it, and is an indication that the Founder may not actually understand the market. A bottom-up approach is best as this provides a proof point .
Data Symmetry
Every slide needs to speak to each other. I often see a gap between market sizing, and what the size of the problem is that they are trying to solve, and how they’re going to go about attaining market share. Financial projections are often flawed and disconnected from the product roadmap and the SOM.
The Ask
The slide is often the most confusing for me as founders generally ask for a way round number and then kind of break it up equally between various parts of the business. For example 30% to technology, 25% to marketing and the rest to headcount. Lack of substantiation, or relation to any of the other slides, often leaves me wondering if the founder understands their own business that they are going into.
Unit Economics
Or rather lack thereof....many Founders just can't seem to get their unit economics right. This is because they really have little to no idea as to how they will make the sale and then ensure they have the processes, people and systems in place to deliver what the customer has paid for.
There are many more issues I see, which I will leave for future blogs, but for now, these remain my pet peeves. This gives you a little insight into reading decks the way an investor does.
If you want more info on that, comment below, and I will whip up a quick blog or video on it. Should you need assistance with your pitch deck, feel free to contact me for an in-depth pitch scrub. I’m planning a 1 week pitch bootcamp - pre-register here and you will be the first to know when the date is released. Alternatively, you can work directly with me to raise your next round.
Until next time, wishing you the best of luck on your fundraise.