All Hands on (the) Deck

Posted on January 31, 2018 by Hansen Babington

A summary of key business and legal issues affecting a business presentation, or “deck.”

Presenting the core facts of a new company and its business model is no easy task. We have all heard of the “elevator pitch,” and it’s certainly important for key members of a company’s team to be able to giv e a 30-second overview of a company’s mission statement. However, oftentimes a more formal explanation is required, or simply useful. Need a visual aid while presenting your business idea at a conference? Trying to explain to a strategic partner how your product fits into a larger ecosystem? Attempting to catch the ear (or access the balance sheet) of a potential lender or investor? This is where the “deck” comes in.

In its essence, a deck provides a general overview of a company and its strategy in 10-20 presentation slides. Depending on industry or target audience, a deck can take on many different forms—data heavy, narrative driven, dependent on linked external content. However, regardless of form, successful decks we see are above all clear and concise, and address the following core elements of a company:

  1. Product
  2. Market Opportunity
  3. Management Team

At the center of any company is its product. What is the problem facing your industry? How do you address it? These are the crucial questions you must answer. That said, we caution companies against including too much product description. This can be tough. Founders and management, especially those with scientific or engineering backgrounds, often want to focus on describing the product. Page two of what’s supposed to be a quick-hitting summary, however, might not be the best place for describing how, exactly, a tolerizing immune modifying nanoparticle works. We recommend simple descriptions that can be grasped by a lay audience. Founders can address technical concerns in follow-up discussions. As far as the presentation goes, fewer words are often better. This is because…

Most audiences—but especially investors—are focused on the potential market opportunity. Remember, these folks are at the party for one primary reason: money. A deck needs to describe a product’s addressable market. What constitutes the market? What is its dollar-size? Is it growing? What portion of the market will your product address? Who are your target customers? Your key competitors? Have you gained traction, or actually entered or capitalized the market you have just described? You will need to differentiate and include different information depending on your company’s growth stage (Seed, Series A, Series B, mezzanine or pre-IPO, seeking strategic exit). Avoid narrative descriptions here—clean graphs and supportable numbers are best.

A deck should absolutely not underestimate the importance of describing the management team. As a colleague says, “don’t bet on the horse, bet on the jockey.” Nowhere is this more true than in the business world. Investors know that great ideas are relatively abundant; finding a team that can execute on them is tough. A deck must describe key founders, executives and other members of the management team, including their education, relevant business experience, successful exits, and any meaningful accolades. Make sure management descriptions sync with the business strategy and prove that the team is capable of execution.

Finally, a company needs to keep several general legal considerations in mind throughout the drafting process, especially when the target audience includes investors. First and foremost, avoid promissory language. Do not use Amazon’s IPO as a comparable for your pre-revenue medical device company. Do not promise an exit. Do not sprinkle exit multiples or cap rates into your deck. Everyone knows a successful exit is the goal, but do not promise or imply an exit! You don’t need a legal disclaimer (save those for your offering documents), but be mindful of how you calculate and utilize forward-looking projections. Second, will your deck form a part of your offering documents or a targeted selling effort? If so, you might need to pay a bit more attention to certain financial details. Similarly, are you using a placement agent or investment banker? If so, you will need to be mindful of version control and ensure that all investor audiences receive the benefit of any information that might have been made available to a subset.

At the end of the day, keep a few key principles in mind. Be clear and concise. Stay on target and don’t clutter your layout or delivery with extraneous information. Speak to your audience. Remember that most people lack a sophisticated knowledge of your product and are focused on several key data points, many of which are financial in nature. Less is more. You can drill down to granular details in follow-on discussions, but keep the deck approachable, both visually and in terms of content. A deck should stand on its own, but also blend seamlessly as a visual aid into a more detailed presentation. Every company has a story—makes sure your deck tells yours.

In case you find them helpful, below are several deck resources:

Google’s Template Pitch Deck for Startups

LinkedIn’s Pitch Deck for Its Series B Round

Facebook’s Original Pitch Deck from Spring 2004

Airbnb’s Pitch Deck for Its Angel Round

Mint.com Pre-Launch Investor Pitch Deck