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VC PITCH DECK PRINCIPLES FROM THE HORSES’ MOUTHS. PART 1.

Summary:  Somehow, entrepreneurs seem deaf on what venture capitalists want to see in the initial documents about a new company.  So, we tossed the question out at the (excellent) “Shaking the Money Tree” panel presented by LAVA—the Los Angeles Venture Association (www.lava.org).  And the answer is:

A PowerPoint “pitch deck” of no more than 15 pages and, maybe—just maybe—a two page executive summary.

The Details.

At the LAVA conference to present the quarterly results on venture investing (prepared by PriceWaterhouseCoopers) several panelists answered our question: What should a Pitch Deck look like?

Jim Armstrong of Clearstone Venture Partners (www.clearstone.com) made it clear (and we are paraphrasing here—hey, we’re not stenographers): “Entrepreneurs confuse comprehensive for compelling.  We want compelling.” Jim Andelman of Rincon Venture Partners (www.rinconvp.com) said this:  Remember your goal with the pitch deck—to get a meeting with the venture capitalist.  He put it another way (again, paraphrasing):  “VC’s are like moths to a flame and that flame is PowerPoint.”

Everyone on the panel agreed that the pitch deck should be a PowerPoint presentation of no more than 10 to 15 pages.

OK, OK, some entrepreneurs will then respond by taking their 50-page business plan and cramming it into those 15 slides using 10-point type.  Uh, unclear on the concept.

True, if the VC wants more then you will have to prepare—and later submit—more detailed plans like your go-to-market plan, etc.

So, we took that advice and mashed it together with other things we have heard from many other vc’s over the gejillion of years we have been involved with startups. In this case, the details are some pointers on what should be included in a Pitch Deck.   In subsequent posts (or articles) we’ll explain more of the process.

The Pitch Deck:  Just remember that you are not trying to get everything—or even a lot—of information in front of the VC.  You’re just trying to get his or her attention.

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15 slides.  Maximum.  That includes the title slide and the “Contact Us” slide at the end.

Standard formatting—meaning do NOT cram two, three, four five paragraphs of text onto any page.  Usually, a slide has three point with a maximum of three sub-points.  Use one.

If you ever use any font smaller than 14 points on a slide then we will hunt you down and wag a finger at you.

Why?  Well, as one of the panelists said, it’s like dating.  Would you go out with someone who told you everything about your life in your first meeting?  You need to make it compelling by highlighting the essential points, that is, the points that will get the attention of the VC, so that you can get a meeting (or another meeting).  And only those points—not a dissertation on the points.

The Slides:

OK, so you have 15 slides.  What should they say?

1. Title Slide

2. What Market We Are in

3. What the Market Is and Will Be

4. What We Do & How We Do It

5. What We Do Uniquely/Differently (sorry for the grammar)

6. Who the Competition Is and Will Be

7. How We Differ from/Are Similar to the Competition and How We Beat Them

8. Who our Management Team Is and Those We Will Need

9. Who our Management Team Is and Those We Will Need (page 2)

10. What It Will Cost

11. How Much We Need

12. How We Will Use that Money (including milestones)

13. How We Will Use that Money (page 2)

14. Bonus Slide

15. Closing Slide (“Thank You”)

Now, if you think about it, some of those slides are variations of the same topic and can be combined (e.g., Slides #2 and #3;  #4 and #5;  #5 and #7).  And, you can break out #4 into two slides.  You will notice that, actually, you could do it in something like 12 slides but we gave you two slides for a couple of topics and a bonus slide just because we're in that kind of mood.

That’s it.  Those are the slides.  Now, each slide does not have to be the exact topic listed in this list.  This is our outline, not one necessarily sanctioned by VC's, but you get the

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point (we hope).  You figure out the language, but that language should answer each question (or, more to the point, explain the topic of each slide).  And remember:  nothing less than 14 points and only then if you are explaining subpoints.  Or we'll find you and wag a finger.

And why is it that entrepreneurs don't follow this simple approach?  

And more to come in subsequent postings and articles . . .

James C. Roberts III is the Managing Partner of Global Capital Law Group (www.globalcaplaw.com) and CEO of the strategic consulting firm, Global Capital Strategic Group (www.globalcapstrat.com). He heads the international, mergers & acquisitions and transactional practices and the industry practices concentrating on digital, media, mobile and cleantech technologies.  He is currently involved in opening the Milan office.  Mr. Roberts speaks English and French and, with any luck, Italian in the distant future.  He received his JD from the University of Chicago Law School, his MA from Stanford University and his BS from the University of California—Berkeley.

The GLOBAL CAPITAL firms counsel domestic and international clients on strategic and legal issues inherent in the deployment of intellectual & financial capital—a merger or acquisition, foreign market expansion, a strategic alliance, a digital content license, a mobile deal, foreign and domestic labor and employment policies, starting a new entity or raising capital. Clients range from global Fortune 100 corporations such as Deutsche Bank and News Corporation and its subsidiaries, MySpace.com and Fox Interactive Media, to start-ups. Industries represented include digital media, Internet, software, medical and biotechnology, nanotechnology, consulting firms, environmental technology, advertising, museums and other cultural institutions and manufacturing.

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