Thanks to the data-driven research behind our extensive fundraising research, we know how to determine what makes an effective pitch for early-stage startups seeking investment. In fact, since we launched the DocSend Fundraising Network (DFN) a year ago, we’ve analyzed over 2,000 pitch decks from founders raising capital and connected over 300 founders with top-tier investors.
Your pitch deck is like your golden ticket to an investor meeting, so you’ll want to avoid information that may raise too many questions just as much as you’ll want to ensure investors are left curious and wanting to learn more. Below are four mistakes to avoid while crafting your pitch deck so that you’re in the best position to secure that meeting.
Missing a technical founder
Our research shows that the team slide is highly scrutinized in pre-seed and seed pitch decks. VCs are spending a significant amount of time on the team slide because the founding team is one the biggest indicators of success for an early-stage company. It might disconcert potential investors, then, if your team slide doesn’t list a CTO or at least has no information about the technical team building your product. This is especially true if you’re still at the idea stage and don’t have a full product yet.
It’s also valuable to note that it’s rare for teams who outsource the building of their technology to receive venture capital. Investors are looking for a team they can trust to execute the idea you’ve set forth. If you’re depending on someone else for that vision, it’s an extra complication that might turn an investor off. Most likely, other factors about your company, other than technical chops, would need to be much more compelling to confirm venture capital. Always keep in mind that investors are looking for ways to say no to a company. If you don’t have the connections to find someone to build your product, joining a tech company or networking with engineers can be a productive way to increase your team’s likelihood of success.
Once you’ve secured the team, your team slide should include each founder’s full name, photo, brief biography, a LinkedIn link, and you should craft your team slide with narrative in mind. Whether it’s the fact that you’re solving a problem you’ve personally dealt with, or you have the unique experience to make it happen, make sure you’re communicating that your team is the best to execute this idea.
Weak or ineffective competition slide
According to our most recent research of pre-seed companies, VCs spent more time looking at competition slides than ever before, up 51% from last year. This means that investors want teams that clearly understand where their product fits into the market and can articulate how they’re differentiating themselves from other companies.
This means communicating this differentiation in your deck is crucial, which many companies struggle to do effectively. Some companies simply need to work on developing stronger differentiation. For example, “Better UX” likely isn’t sufficient enough to garner VC attention to your product. You’re also not helping yourself if your differentiation is riding on vague buzzwords such as “Higher ROI” or “More Cohesive Solution” as distinguishing factors. You should iterate on how you communicate your differentiation until it’s obvious and compelling to someone.
Other companies may have strong differentiation, but they convey it in an unclear or uncompelling way. The basis of a good competition slide includes the names of at least a few other companies that you’re directly competing with and identifies how you’re doing something different from them. The most effective way to organize this information is with the help of a visual aid, such as a two by two matrix or a chart with checkboxes. The strongest competition slides also include a sentence to accompany your visual aid. It can be confusing or unclear if you leave the chart to stand on its own, but if you include a sentence that shows your viewer how to interpret your visual of the competitive landscape, you can be sure you’re covering your bases.
Too much or too little information on each slide
According to our latest pre-seed research, investors are spending just over three minutes on average reviewing pitch decks. Successful decks win a bit more scrutiny from investors (investors take roughly four minutes to look at them) whereas unsuccessful decks lose their grasp on an investor’s attention remarkably quickly (investors click out only after about a minute and a half).
A deck that has way too much or way too little information is one of the first signs of a deck that isn’t going to be worth someone’s time. On one hand, slides with too few words are an immediate indication that there’s not going to be enough information to adequately judge your company. Incorporating visuals into your deck is always a great idea, but relying on them too heavily may do more harm than good.
On the other hand, slides with too many words are an immediate headache. You’re making your viewer work hard to sift through a sea of extraneous information to find the essential information on each slide. The same logic applies to decks that include extra information in appendix sections. Our seed research shows that VCs spend a significant amount of time in appendix sections of unsuccessful decks, suggesting that it’s best to forgo the appendix and focus on perfecting the essential information in your deck. As the founder of your company, it may be difficult to distinguish between what’s essential and extraneous. Give your pitch deck to an outsider with a pair of fresh eyes and ask them to highlight which information they find most important on each slide, and use that as a starting point to trim the fat from the meat of your deck’s narrative.
Once you’ve hit that sweet spot, you should organize each slide’s information in a digestible way. Each slide should have a header that helps the reader clearly and quickly understand what they should learn on that slide. You should also tell your story with bullet points or short sentences as opposed to lengthy paragraphs that make a reader’s eyes glaze over.
Remember that your deck is your one shot to generate interest before a meeting. Crafting a deck with a goldilocks amount of info (not too much and not too little) will increase the likelihood that you’re creating a strong narrative.
You open with a “disclaimer,” “risks,” or a SWOT analysis slide
Disclaimer slides present generic information about the risks of investment. Similarly, a Rrisk or SWOT (strength, weakness, opportunity, threat) analysis slide dives into why investment may be a bad idea for your specific company. Bottom line — don’t include these slides! These slides either harm your narrative or else do nothing productive for it. Why start on a bad note?
VCs understand that some degree of risk is implied in every investment, so a “disclaimer” slide is basically a “duh” moment. Our research shows that you have just 18 slides in a pre-seed deck and 20 in a seed deck to get your story out to an investor, so you don’t want to waste any time on something an investor already knows. Similarly to an appendix, you don’t want to provide extraneous information in a risk or SWOT slide that might give an investor reason to say no to you right off the bat. If you’re concerned about painting a fully accurate picture of your company, this will happen later while meeting in person and during the due diligence process.
Remember that you’re building a narrative to compel someone to take a meeting with you, and these slides aren’t doing anything to contribute to that goal. The good news is that this mistake is an easy fix — all you have to do is delete these slides.
More startup fundraising resources
To get data-driven feedback on your pitch deck and to get connected with committed and quality VCs, submit your pitch deck to the DocSend Fundraising Network.