Resources

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A beginner’s guide to your deck

The deck is your starting point to funding and as such needs to stand out amongst the hundreds of others that investors will see.

It needs to be:

Concise
Punchy
Correctly ordered
Flowing
Visually attractive but not to the detriment of the content
Informative but not overly detailed
Leaving the reader wanting to know more

I have seen, written and re-written hundreds of the things. Some need more work than others. We expect companies to already have a deck but as part of our process we will scrutinise, question and amend until it hits the right spots.

Introduction

In all my years of raising money for companies, aside from having a good business, the next most important factor for me has always been the management. Investors need to believe in you, so start by telling them who you are and why you founded the business. Investors love someone who has found a solution to problem – it may be a personally experienced problem, or it may be an industry problem but tell them what you are disrupting in a way they can relate to.

The Problem

What specifically is the problem, how have you been affected by it and what impact does this problem have on your customers?
Why does it need addressing now?

The Solution

What does your company / product do (briefly)?
Why is your company better than existing solutions?

The Industry / Competition

What is the market size and growth potential (use credible current sources and reference them)
Identify your target customers – what does your research show about your potential customers.

Your Business Model

Nearly 20 years ago my boss in equity sales told me that the only thing investors care about when meeting a company is ‘is this going to make me money?’ Times have moved on a little with some investors also prioritising purpose over profit, but most of them essentially want their investments to make them or their investors’ money. If they are funds, they are accountable to the underlying shareholders / investors – it’s their job to make money and be accountable for their investment decisions.

What is your business model – SaaS, B2C, a one-off purchase, or a freemium model and premium model – spell it out and be specific.

Be sure to highlight when you expect to get to your next milestone be that break-even / profitability / £Xm of sales etc.

Milestones

Particularly for start ups, a great way to demonstrate what you have achieved to date is a time line of what you have already done. This may not be revenue generative yet but show how you have built a business from scratch. This could include product development, marketing figures such as social media followers, customer acquisitions, key hires, past fundraisings, grants received etc. You can also include quarter by quarter goals – investors like to have something they can measure your achievements by and hold you accountable to – so be realistic, don’t overpromise and under deliver.

Financials

This is really important – include historic financials – these are often overlooked, but investors want to see demonstrable evidence in order to believe your projections. Be transparent about the assumptions you have made in order to get to these forecasts. This will be the basis for your justification of your valuation. Hockey sticks are not often trustworthy … and rarely materialise in the expected time horizon.

Funding Round

How much cash / debt do you currently have?
What is the monthly burn rate? Runway?
How much are you looking to raise?
At what valuation?
What is your use of proceeds – be specific – show how much you need for each element e.g.: £150k for new sales hires; £750k for marketing; £1m for working capital; £5m for an acquisition. This shows that you are not wasting anything and you’re raising exactly what you need to get you to the next stage. No war chests.

Team

Full team, board and advisor biographies. Don’t forget your advisors – having those with strong industry credentials and contacts can be hugely persuasive for investors. If you have attracted expert advisers, with industry clout, there must be a very good reason.

Summary

Why should readers invest? The main overarching sales points only.

Appendix

Previous raises and who participated and at what valuations
Industry exit multiples examples.

TIP

You have a limited number of slides and words so don’t waste them

Use your headers to give information. For example, instead of ‘Total Addressable Market’, say ‘£2bn industry in the UK alone and growing’
Don’t use too much technical jargon, acronyms or industry speak
Don’t over promise and then under deliver
Be realistic and sensible
Not everyone loves a hockey stick growth curve
Practice it – practice it so much it doesn’t sound rehearsed
You should be able to get through your deck in around 30 minutes leaving enough time for pleasantries at the beginning, questions throughout and next steps at the end. Some investors will only give you 30 minutes for the first meeting so you need to be even more concise in this instance
Use data and visuals
Back your assumptions up
Use respected sources
Don’t get distracted and go into huge amounts of detail in the first meeting, you need to make sure you don’t run out of time having spent 40 minutes on the problem leaving little time for the solution
Make sure your deck is ‘on brand’ and graphics are appropriate and not too distracting
You don’t want your investor to be reading the deck whilst you are talking – they can’t listen and read at the same time so stick to short concise bullet points

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Valuation

We will advise and guide you on a reasonable and objective valuation for your business that is going to be palatable to potential investors.

In a difficult market, you have to be sensible about your valuation. As an entrepreneur who has started a business with a lot of sweat equity, you understandably think your business is outstanding, and so you should, but you must also recognise that so does every other entrepreneur, and investors see hundreds of investment opportunities every week.

The value you place on your business on initial contact can be the reason that potential investors choose not to participate in a round, and this can make the difference between funded faster growth, and missing the boat and stagnating, potentially running out of money and folding.

The balance has to be fair and it has to be in line with the current market, not the lofty heights of 2020/21. It’s hard to go back to investors cap in hand with a lower valuation or a future down round as this harms credibility and trust in management.

The below table from Mark To Market gives you an idea of how valuations have moved over the last two years and it is worth remembering that 2022 figures fell significantly from 2020/21.

	Pre-Seed	Seed	Series A	Series B
Raise Size	250k – 1m	1-3m	3 – 10m	10m +
PNM Val 22	6.8m	3.6m	18m	70.2m
PNM Val 23	6.4m	3.7m	16.9m	65.5m

	Value	No. Co’s
2022	16.2bn	3793
2023	9.2bn	3095

Source: https://marktomarket.io webinar April 2024
https://marktomarket.io/uk-equity-fundraising-report-q1-2024/

Note that, companies raising pre-seed money in 2022 were likely to see their valuations cut in half for a Seed round the following year!

Also note that this is an average of all deal private deals where some sectors command higher valuations as their business models are more attractive (B2B, SaaS, recurring revenues, long contracts).

It’s also important to remember that for some HNWs and funds, you will also be competing for capital with small listed companies who offer quarterly reporting and liquidity. Many of these companies are currently trading at a huge discount to fair value.

To get to a sensible valuation, you have to have a clear understanding of your financials. We work with a number of independent advisers who can help with internal budgeting and financial forecasting which in turn will help you arrive at a sensible valuation. In some situations, they can offer a fractional CFO role.

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Q&A

For companies we work with, we want to ensure that you have the swiftest path to funding.
What slows a lot of fundraises down is founders not having access to all the answers they need at their fingertips.

By devising a company specific Q&A document, we aim to tease out answers to all the possible questions you could be asked. It will also help you see what the most important aspects are of your business are so you can ensure they are all highlighted in your deck.

You can turn this into an FAQ document that you can send to potential investors, making investor committee meetings easier for them and allowing you to have control over the narrative.

A sample generic Q&A document we issue to clients is below, but the one you would receive would be much more tailored to the specifics of your business.

Intro

Who are you?
Who else is involved (team / board / advisers)?
What do you do?
Why are you doing this?
What problem are you solving and how?
How do you differ from competitors?
What is your business model?
Why now?

Industry

What is the market size?
Total addressable market?
Immediate addressable market?
Who are your largest competitors?
What do they charge?
What multiples do competitors trade on?
Why would a customer chose you over a competitor?

Product

How does your product differ from the competition?
Can you expand your product offering?
Why are you prioritising certain products / markets?

Customers

Who are your customers and why did you choose that particular cohort?
Are you planning on expanding this outside of your current niche / could you?
Describe your typical customer?
What reasons do customers give for not taking up your product after trial?
How do you acquire customers?
What is your CAC?
What does it cost to onboard customers?
What is customer retention / churn?

Financials

What revenue have you achieved to date?
Is it recurring?
What has been your growth trajectory to date?
What’s your projected revenue?
What assumptions are you making to get to that?
How long are your contracts?
What are the payment terms?
What are your gross margins?
Can you improve on those margins and how?
What margins do competitors / the industry have?
What is your pricing model – SaaS etc?
Why that price point?
Do you have a finance director? Do you plan to get one? Who currently does this?

Barriers to Entry

What are your barriers to entry / moat?
What are they in the future?

Sales & Marketing

How do you currently market your offering?
What are your future marketing plans?
How many employees do you have in sales and marketing? Are they full time or consultants?

Vision