What’s The One Thing You Shouldn’t Put In Your Pitch Deck?
I have a lot of pet peeves regarding pitch decks. For example, it drives me crazy when I see founders waste money hiring designers to help them pretty up their decks.
What a waste of money. All you need is white background, your company name and logo in the footer of the deck and you’re good to go.
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Then there’s the urge too many founders can’t resist. You know, the urge to show off their technical prowess to their potential investors.
What a mistake that is. Yeah, you may show off your technical chops to investors, but you’ll also lose your audience in the process. Ugh.
But of all my pet peeves regarding pitch decks, there’s one pet peeve that rises above the rest, and that is, drum roll please…
You use a classic, “hockey stick” graph, instead of an income statement chart with numbers, to show your financials.
Oh, but the graph looks so cool. Up and to the right? That’s what investors want to see:
After all, just look at that growth! The problem is there is no useful data in this graph. None at all.
Now let’s compare the classic hockey stick graph to what LinkedIn provided investors in their Series B pitch deck:
Ah, this may not be a hockey stick, but this makes life so easy for your potential investors because everything an investor needs to quickly evaluate your company’s financials is in one easy place:
- You show your historical data, and…
- You show your revenue growth, and…
- You show your expenses by year. That’s helpful, and…
- You show your cashflow. Excellent, and…
- You show how much money you think you need through the life of the company to get to cashflow breakeven. Super helpful, and…
- You show your headcount year by year. That’s great because that provides an easy check of your expense projects.
This is, in my opinion, the gold standard of what you want to provide your investors. And the great thing is this is so easy for you to do.
All you need to do to provide LinkedIn level quality information to your investors is cut and paste from your financial plan.
I literally had a tab in my financial spreadsheet that compiled my income statement plus a few extra pieces of information that I new investors would want (headcount, cashflow, and cash) into one easy to follow chart. Then all I did was copy and paste the chart into my pitch deck.
Your goal is always to make things super-easy for your investors to follow.
I was having a conversation yesterday with a CEO I am working with. He was preparing his deck, and he was concerned about sharing too much financial information with his investors.
I said, “When I was younger, I was really paranoid about sharing what I felt was sensitive financial information. But, as I’ve gotten older, I’ve realized nothing bad is going to happen. After all, what bad things are your potential investors going to do with the information you give them?”
Your investors are trying to decide whether or not to invest in your company. If you make things too difficult for them to understand, they will pass on investing in your company and move on to the next company on their list.
That’s why you want to make it really easy for investors to understand the financial status of your company. And the best way to do that is with a simple chart like the one LinkedIn provided their investors.