A typical exchange between founder and investor:
Founder: Hi! Would LOVE to meet you and talk to you about what we are doing.
Investor: Do you have a deck?
Founder: Sure, here it is. When can we meet?
1-2 week(s) later…..
Investor: Sorry, doesn’t look like I could help.
I am pretty busy now, let’s re-connect in a month.
Why do investors ask for decks?
The number one reason is to avoid a meeting.
Since most founders won’t get the check from this specific investor, but most founders want to meet the investor anyway, the investor simply doesn’t have the time to meet. The investor’s way of avoiding the meeting is to ask for the deck.
Secondly, most founders don’t get strong introductions. They just get any introduction they can get. So the investor doesn’t feel like they have to meet the founder. They ask for a deck instead.
Thirdly, the investors ask for decks to get an idea if the business is a fit for them. But that’s not quite true. Investors are really just looking for the team slide and the traction slide. First and foremost, the investors want to know if the team has experience in the space, and what progress they made.
Investors pass immediately if the team doesn’t have relevant experience, and there is no traction.
Why sending the deck before the first meeting is a bad idea
Investors will make a decision to pass on your business based on your deck. Once they decide to pass, it will be difficult to get another look.
Your business isn’t your deck. You are not your deck. Don’t let the deck represent you.
This is as simple as I can put it.
Once the investor gets the deck, there is little urgency to act. It can sit in their inbox for days. It feels like work to look through.
All decks are different. Some are really long, and non-standard. Investors hate them. They flip through a slide or two and stop. I know that because I often struggle to get through the decks I get.
And then there is the whole thing about sending decks around. If you liberally send out your decks, very quickly you will find out that your competitors have it. It’s just the way it is. Things spread quickly on the Internet, you know?
Traction + Warm intro + 2 paragraph + 15 min call/hangout
But Alex, you say, EVERYONE is asking us to send the deck. How could I possibly say NO to that? What do I send?
To solve a problem, let’s understand the cause. The cause is that you are actually too early, don’t have traction, don’t necessarily have background in the space, and you are coming into the investor’s inbox via a not-so warm intro, and asking for a lot of time – meetings are typically 30 minutes.
Flip it on its head.
Don’t go after investors until you have traction. Get a warm intro from someone who knows you / can attest to your progress, and who knows the investors. Someone who investors actually trust and respect – most likely another founder they backed or someone they worked closely with in the past.
Instead of the deck, send a 2-paragraph intro. Read this post for full details on what should be in those two paragraphs. Most importantly, include traction, how you are different, and why you are working on this business.
Ask to get feedback via a 15-minute Google Hangout. Not a meeting. A Google Hangout. Why? Because you can still make a connection with the investor, because in the worst case you will get a call, and in the best case, the investor will actually be impressed and ask you to come in for a meeting.
Two paragraphs written correctly should be easy enough for an investor to decide if it makes sense to engage. Two paragraphs are A LOT EASIER to understand than the deck. You are actually saving the investor a lot of time. You are also making sure your deck is not parading around the Internet.
If you want to up the game, shoot a 60-second (not longer) introductory video to give more background on you and the business. I love seeing those included in Techstars applications. The video is WAY better than the deck. The investors can actually tell a little bit about you as a person. An awesome video increases the chance of investors saying YES to a meeting.
When to actually send the deck
While sending the investor deck before the meeting is generally a bad idea, you do need an investor deck, and it needs to be awesome. You will use the deck when formally raising money from VC firms. Typically, you will need the deck to walk investors through your business during the second and the third meeting.
You will need to send the deck to the firm before the partner meeting. It is a standard ask. All partners are given your deck in advance of the partner meeting so that they can review it in advance.
What has been your experience with investor decks? Feel free to jump in to share your story.