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Don't Bury the Lead

Ryan Frederick | March 22nd, 2021

An effective pitch deck is an important tool for founders looking to raise investment for their startup. The challenge many founders face is that they aren’t great storytellers and they don’t know what to focus on in their pitch decks, so the lead often gets buried.

Besides burying the lead, you must also avoid your pitch deck becoming stagnant. It’s not uncommon to see pitch decks that are completely outdated compared to what the founder is publishing on their website or presenting to the world.

Back to storytelling. Founders who are good at raising investment for their companies get good at storytelling. They tell a story that positions the problem as a scourge upon humanity and they know enough about the problem to be able to solve it. But effective storytelling isn’t easy. It isn’t just about the facts. There has to be some real emotion involved to motivate investors to act. Investors have to see, taste, and smell the opportunity being presented to them to act with some urgency. One of the things that gets investors interested and excited is customer traction.

Customer traction isn't only about the facts around the customers, those are good too, but investors get particularly excited around the story for each early customer. How did the startup acquire the customers, what value do the customers see in what the company is doing, how are the customers using the product, what feedback are customers providing and how is the company using them to improve the product? These are things investors will be interested to learn about because it helps investors understand the value of what the company is doing and the potential of what the company can do for other customers. Investors can begin to connect the dots between their investment and their return.

I’ve seen a growing trend inside of startups with founders not being great storytellers and creating ineffective pitch decks. They often bury their lead because they get focused on other, less important, things. Total addressable market (TAM) is one of the culprits that distract founders from focusing on their lead. Founders have heard and seen everywhere that to receive investment they have to be going after a big market. Founders have heeded these warnings and fall over themselves trying to convey and defend the size of the market for their company. I’ve seen many different formulas, calculations, and impeded spreadsheets in pitch decks illustrating and defending the TAM for their product. They do this to the detriment of the overall story and to what otherwise might be more important information for investors to know.

The most common lead I see get buried in pitch decks is customer traction. I know, sounds crazy that elusive customer traction would get buried in a pitch deck, but I see it often. Sometimes this is a result of founders not being confident in these early customers sticking around as these early customers are often doing betas or pilots. Sometimes these early customers aren’t paying, and the numbers can be small. I spoke to a founder who told me he had three customers who were currently piloting the product. This wasn’t anywhere in the pitch deck. When I asked him why it wasn’t in the pitch deck, he said it was because he was embarrassed that it was so few. For an early-stage product and company, three pilot customers is huge. I advised him to update the pitch deck with the pilot customers and to put it near the beginning. He did and messaged a few weeks later that he had raised some investment as a result. I reminded him that it wasn’t just because of the pitch deck change, and that he is working on a high value problem, but not having the lead buried was improving his ability to tell a better story.

Another way customer traction gets buried as a lead, is having it too far into a pitch deck. I received a pitch deck in which the second to last slide referenced nine, Fortune 500 companies the startup already had as customers. All of the slides about the problem, the company’s solution, and why they were right would have been much more meaningful if the pitch deck opened with the customer slide. There is no better proof of efficacy than customers engaging and buying – none - that’s the goal. Some potential investors wouldn’t have even made it to the slide with the customers.

Founders need to be great storytellers and a result of being great storytellers is understanding what their lead is and opening with it early in the story i.e. pitch deck. If a startup has customer traction of any size and scope that should always be near the front of a pitch deck and the lead.