The one pitch slide every startup gets wrong

The one pitch slide everyone gets wrong

When raising money for their startups, entrepreneurs get one crucial slide wrong. every. damn. time.

Sometimes, the slide is known as 'the ask’. Some founders omit the slide altogether. Some founders just stick a number on there. Some add something like “We are raising $2m at a $20m valuation”. None of that works. Wanna know why? Because it isn’t about you or your startup — it is about what the investor is going to get for the money they invest.

Or, put differently: If I invest $2m into your company, what is my money going to buy me? I’m not talking about the number of shares or the percentage of the company. I am talking about progress and milestones. What are you going to accomplish with $2m?

Oh, and before we talk about anything else: If you don’t have a term sheet in hand, don’t include a valuation on the slide; that’s all up for negotiation anyway.

Silly stock photo aside, using a calendar — and input from your team — isn’t actually a bad way to do the first pass of your operating planning.

How much should you raise?

You would be surprised at how many of my clients don’t have clarity on how much money they should raise. Often, they think they should be raising a ‘seed round,’ and they have a feeling for how much money that represents. More often than not, that means they are raising far too much capital — or far too little.

You need to know how much money you need to raise. And how do you know that? Well — it’s simple: you need to know what you’re going to do with the money. Realistically, the amount of money you raise should be enough to get you to the next round of fundraising. That sounds simple, but how do you know how much that is? That is where your operating plan comes in. In fact — I usually advise to my clients to forego an ‘ask’ slide in favor of an operating plan slide instead.

SMART goals and milestones

What it all boils down to is this: What milestones do you need to hit in order to raise the next round of funding? For most startups, this includes:

  • Product — What product milestones do you need to hit in order to raise the next tranche of money? In particular, this includes beta or full product launches, major feature-sets in the product pipeline, or integrations with partners.
  • Traction — What business metrics do you need to hit in order to raise more money? How many units do you have to sell, how many subscribers do you need, how many customers do you want? Other metrics may also be helpful here — your NPS score, monthly active users, etc.
  • Market Validation — What can you do to prove that there’s a real market out there willing to pay for the product or service you are peddling?
  • Key hires —In order to reach the above goals, you probably need to hire. Who do you need to hire? When?

In other words: If you are raising a Seed round now, think about what you need to prove to your investors in order to be able to raise a Series A. Map all of that out, and figure out what resources you need to get there. That’s how much money you need if everything goes to plan. Add 30–70% as a safety buffer (depending on how good your planning is, and how predictable your business is), and that’s how much money you need to raise.

Each of these goals should be a SMART goal: The goals need to be specific, measurable, achievable, relevant, and time-based. A poor goal is “Improve marketing,” or “Get more customers,” or “Add features to our product.” Examples of great SMART goals are “By June 2021, we need 2,000 paying customers on our recurring subscription model,” or “In the next 6 months, we need to reduce our customer acquisition cost by 20%,” or “Our B2B sales need to improve, so by July we are aiming to hire an experienced VP of Sales who can help shape our sales processes.”

Once you have clarity on your milestones, you can map them out in a spreadsheet. What resources (time, money, staff) do you need to reach each milestone? Are there any dependencies in your plan? Add it all to the sheet. Now, you’ll have clarity on what you need to accomplish, how long it will take, and what it will cost. Bingo. That’s the perfect “the ask” slide for your slide deck.

From milestones to a fundraising goal

With all of the above in place, you’re in a much better place; you’ll be able to see how long it will take to hit the milestones.

Don’t go into too much detail in your operating plan — you can’t predict things that happen 24 months from now, so there’s no point in even trying. Keep your numbers round and easy to read, and make sure that the next 12–18 months of your operating plan are reasonably detailed. As the founder, that’s roughly the amount of time you’ll need to hit your milestones and start the fundraising for your next round.

For your pitch deck, you will be able to distill all of the above into a simple table. Use one column per month, and mark out the major milestones and cost centers for your development.

Finally, make sure you do a sense check. If you are going from 10 customers to 10,000 customers over the course of the next 18 months, can the staff you have support the extra customers? Does marketing spend seem reasonable? Do the operating expenses scale along with the number of customers? If all of those things seem right, then you’re probably on your way to having a solid operating plan.

See also…

Haje is a pitch coach based in Silicon Valley, working with founders all over the world to create the right starting point for productive conversations with investors — from a compelling narrative to a perfect pitch. You can find out more at Haje.me. You can also find Haje on Twitter and LinkedIn.


The one pitch slide every startup gets wrong was originally published in Pitch Perfect on Medium, where people are continuing the conversation by highlighting and responding to this story.

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Sanity Group is led by Finn Hänsel, an alum of the Boston Consulting Group and a founder of the Sydney, Australia based fashion e-commerce company The Iconic, and by Fabien Friede, who also worked with Hänsel at The Iconic.

Sanity Group has two main businesses, one focused on medical cannabis and pharmaceuticals, and one focused on “wellbeing” or branded products containing popular cannabinoids like CBD and CBG.

Raising money in 2020 was a challenge, says Hänsel. The first $22 million closed before the pandemic took hold in Europe. Hänsel says they had celebrities lined up to invest early last year, though as the pandemic forced many countries into lockdown, “suddenly everyone was insecure about how this would affect the global cannabis industry.”

The startup raised a small seed round in 2019. In February of last year, Sanity Group closed a $22 million “pre Series A” as Hänsel calls it, led by Calyx, a European fund focused on cannabis, HV Holtzbrinck Ventures, and Karan Wadhera, a managing partner of the cannabis-focused fund Casa Verde. The remaining $4.8 million came in December in the round that included the celebrity investors, Hänsel said.

THC-containing cannabis is legal in limited medical applications in Germany, though lawmakers rejected a recreational legalization bill last October.

Hänsel said investors asked questions like how does the European market compare to Canada? What will it look like in five years?

“This is something we discussed very, very intently with investors,” Hänsel said.

“I think it’s very important for a company at our stage that we have the balance that we already show that we are able to execute by showing revenues, but then also actually have a clear vision about where we think the market will go over the next five years,” Hänsel said.

Last year, the UN Commission on Narcotic Drugs reclassified cannabis to a less restrictive regime, acknowledging the drug’s beneficial medical qualities Hänsel said the UN’s move is creating a “huge movement” within the European Union of legalizing cannabis.

Sanity Group has about 65 employees, with plans to expand to over 100 in 2021, Hänsel said.

Hänsel says investors he spoke with were “really sensitive” about the background of his management team, doubly so since they were trying to raise millions and steer a startup through an industry with byzantine, rapidly evolving regulations during a pandemic.

And that’s also because it’s hard for investors to separate “the good from the bad” in cannabis as more companies pile into the industry, Hänsel said.

Investors always asked Hänsel the golden question: Will there ever be a recreational cannabis market in Germany? “What we normally say is we see ourselves two to three years behind the US market,” Hänsel said. “So we see basically medical cannabis is picking up like crazy, especially in Germany.”

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