Entrepreneur Office Hours - Issue #129

How to build a perfect pitch deck

A great pitch deck is like a work of art. If you’ve got a good one, you can usually get just about any investor to consider investing purely because they know they’re talking with a talented entrepreneur.

However, as I explain in this issue’s featured article, building a perfect pitch deck isn’t nearly as straightforward as it seems in any of the articles or videos about pitch decks you’ll find online.

Also, while I’m on the subject of fundraising, in case you’re wondering how much time you should expect to spend when raising a round, I answer that question from a reader in the Q&A below.

Enjoy!

-Aaron

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A Template for Building the Perfect Fundraising Pitch Deck

If you’re looking for an easy-to-follow pitch deck structure that’ll impress investors, here’s what you should know.

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What if You Could Turn Your Biggest Competitor Into Your Competitive Advantage?

I can't be the only person who's ever thought it's weird that Amazon lets you process your returns through Kohl's department stores. Aren't they direct competitors? But, as I explain in this article, once I spent a few minutes thinking about why this happens, I was shocked by what a brilliant strategy it is.

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Office Hours Q&A

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QUESTION:

My question that I’m currently struggling with is how best to put together my funding plan when reaching out to investors.

What’s the typical lead time for raising funds and how long forward should each round cover?

If you could shed some light on that in the current environment that would be very helpful!

- Irete

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Let’s start with what we might call the “standard numbers” for this answer, then we’ll explore some reasons why those standard numbers are misleading.

Generally, people will tell you that raising a round of investment capital should take between three and six months, and the money you raise should last 18 months.

I actually think that’s reasonable advice and a good starting point. It’s also wildly naive. Let me explain…

Once you accept venture capital funding for your startup, you’re officially on the “funding train.” It’s a train you can’t get off of. Well… not easily. Getting off of the funding train is probably about as difficult as getting off of a moving train. In other words, not impossible depending on a variety of different circumstances, but not something you’ll want to try unless the train is literally about to fall off a cliff.

Once you’re on the funding train, you’re pretty much always in fundraising mode, so there’s never really any time between cycles. A big part of that is because your best future investors are also your current investors (i.e. you’ll pretty much always want your current investors to follow-on in future rounds, otherwise it usually indicates a big problem with your company). Since you’ll see and interact with current investors often, it basically means you’re always fundraising.

As for that “18 months” between rounds, it’s a bit misleading because, if things are going great, you’ll probably want to raise money before 18 months. Conversely, if things are going really poorly, you’ll probably need to start raising well before 18 months just to make sure you don’t run out of money before you can raise.

Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!