Pitch Deck

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“Successfully raising money requires sharing a big vision in a clear way.
Anyone who comes to pitch on Shark Tank should read this book first!”
—BARBARA CORCORAN, ABC’s Shark Tank
P
GET or
py CRAFT
YOUR
BUILD
THE PERFECT
LAUNCH
THE VENTURE
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BACKED
STORY PITCH DECK OF YOUR DREAMS
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N o
o
D EVAN BAEHR I EVAN LOOMIS H A R VA R D B U S I N E S S R E V I E W P R E S S
This document is authorized for educator review use only by LEONARDO RIVERA, UNITEC Business School until May 2023. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
s t
“Get Backed is the essential guide to launching a
company—not only raising money, but also raising
relationships. If you’re a founder or an entrepreneur, this
Po “Even the best business plan will fail if you can’t pitch it
well. Read this book to make sure you can.”
—BLAKE MASTERS, cofounder, Judicata;
r
book has the tools you need to succeed.” coauthor (with Peter Thiel), Zero to One
—ADAM GRANT, Professor of Management,
o
the Wharton School; New York Times bestselling “Successful companies grow out of strong communities.
author, Give and Take This guide helps you raise friends, partners, and
investors—the ultimate community to make your venture
y
“This book delivers completely new and refreshing ideas succeed.”
on how to raise money and build genuine relationships —TOMMY LEEP, Chief Connector,
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with investors.” Rothenberg Ventures
—DAVID COHEN, cofounder and Managing Partner,
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Techstars “Founders envision how the world can be different—and
invite others to join that vision by telling stories of hope,
“The best way to solve the world’s most pressing problems failure, triumph, and a better future. Get Backed is the
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is to start a company. This book shows you how.” definitive primer on how founders ought to tell these
—JOHN MACKEY, cofounder and Co-CEO, Whole stories.”
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Foods Market; coauthor, Conscious Capitalism
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“The ability to get a startup funded is a crucial test for a
founder. It pulls together all of the larger requirements
of the job—crafting a clear vision, laying out a clear
—JAMES K. A. SMITH, Professor of Philosophy,
Calvin College; author, Desiring the Kingdom
“Finally, a book by people who have actually done it!

Get Backed is a staple for any startup library. It was our
N
execution path, and cultivating relationships above handbook for raising capital for our venture—and it will
money. Evan Baehr and Evan Loomis have created a do the same for you!”
field guide to help the best founders get the funding they —LAURA and BEN HARRISON, cofounders,
o
deserve for their disruptive ideas.” Jonas Paul Eyewear
—MIKE MAPLES JR., cofounder and Partner,
Floodgate; investor, Twitter
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BaehrLoomis_T_rev01.indd 1 9/3/15 5:21 PM

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GET py o
BACKED
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D o

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GET py or
CRAFT
YOUR
BUILD
THE PERFECT
LAUNCH
THE VENTURE
BACKED
STORY PITCH DECK OF YOUR DREAMS
C o
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EVAN BAEHR | EVAN LOOMIS H A R VA R D B U S I N E S S R E V I E W P R E S S
B O S TO N , M A S S AC H U S E T T S
D

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Po
or
HBR Press Quantity Sales Discounts
py No part of this publication may be reproduced, stored in or introduced into

a retrieval system, or transmitted, in any form, or by any means (electronic,
mechanical, photocopying, recording, or otherwise), without the prior
o
Harvard Business Review Press titles are available at significant quantity
discounts when purchased in bulk for client gifts, sales promotions, and permission of the publisher. Requests for permission should be directed to
premiums. Special editions, including books with corporate logos, cus- permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business
tomized covers, and letters from the company or CEO printed in the front School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
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matter, as well as excerpts of existing books, can also be created in large The web addresses referenced in this book were live and correct at the time
quantities for special needs. of the book’s publication but may be subject to change.
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For details and discount information for both print and Library of Congress Cataloging-in-Publication Data
ebook formats, contact booksales@harvardbusiness.org,
tel. 800-988-0886, or www.hbr.org/bulksales. Baehr, Evan.
Get backed : the handbook for creating your pitch deck, raising money, and
o
launching the venture of your dreams / Evan Baehr and Evan Loomis.
Copyright 2015 Evan Baehr and Evan Loomis pages cm
All rights reserved ISBN 978-1-63369-072-1 (alk. paper)
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1. New business enterprises—Finance. 2. New business enterprises—
Management. 3. Entrepreneurship. I. Loomis, Evan. II. Title.
HG4027.6.B24 2015
658.15'224—dc23
2015015748
D o Find more digital content or join the discussion on www.hbr.org.

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Po
or When your relationship with your spouse is strong,
y
you move out into the world in strength no matter how
tumultuous it is, explains theologian Tim Keller. But
p
when that relationship is weak, you move out into the
world in weakness, even if everything seems to be
o
going perfectly.
As residents of a tumultuous world, we dedicate this
C
work to our spouses, Kristina and Brandi, who—like so
many spouses of entrepreneurs—sacrificed eternally by
t
making ends meet, putting the kids to bed alone, and
shouldering way more than half of the work at home.
N o And despite the burdens they bore, they often looked

us right in the eyes during entrepreneurship’s darkest
moments and said, “I believe in you.” And that belief
alone equipped us to move out into the world with
great strength.
D o —Evan Baehr and Evan Loomis

Austin, TX

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Contents
Po Acknowledgments
Introduction
ix
or Part One: CREATE YOUR PITCH

1
2
3
The Birth of the Pitch Deck
The Building Blocks of a Pitch Deck
Story
15
39
9
py 4
5
6
Design
Text
Actual Pitch Decks
53
65
73
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7 Pitching Exercises 135
Part Two: GET BACKED
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8
9
A Primer on Startup Financing
Overview of Funding Sources
Intro
145
153
173
N o 11
12
13
Conclusion
Build
Delight
Invite
189
203
209
223
D o Index
About the Authors
227
237

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Acknowledgments
Po We are truly grateful to all those who have assisted with this
project, and we’d like to express our sincere thanks for the
generous help and support we’ve received along the way.
r
This book would not have happened without Trevor
Boehm’s tireless work and creativity. He served as our
o
quarterback, led the writing and research efforts, and con-
ducted countless interviews. Our names are on the cover,
but Trevor is the true hero of Get Backed.
y
We’d also like to express our deepest gratitude to Har-
vard Business Review Press. Our first e-mail from Tim
p
Sullivan, editorial director at the Press, said, “The good
news is that I took the project to our acquisitions meeting
o
this morning. The better news is that the committee was
wildly enthusiastic about the book—and how often can you
say that any committee is wildly enthusiastic about any-
C
thing?” From the get-go, the Press has been a joy to work
with, and we are deeply indebted to Tim for believing in us
t
and seeing the importance of a book like this. We are espe-
cially grateful to a few folks on his team, namely, Jennifer
o
Waring, Stephani Finks, Julie Devoll, Kevin Evers, and
Nina Nocciolino.
Showing your investor pitch deck to strangers is a bit
N
like giving the world a key to your front door. It is coura-
geous and an extreme act of generosity. Most of the en-
trepreneurs we interviewed simply said, “No, you cannot
o
publish my pitch deck . . . are you crazy?” It is for that
reason that we are so grateful to the thirteen founders who
said “Yes”: Brad McNamara, Cofounder and CEO, Freight
D
BaehrLoomis_T.indd 9
Farms; George Arison, Founder and CEO, Shift; Jonathan
| ix
8/23/15 7:06 AM
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Beekman, Founder and CEO, Man Crates; Justin McLeod,
Founder and CEO, Hinge; Kegan Schouwenburg, Founder
and CEO, SOLS Systems; McKay Thomas, Cofounder and
Po ship fundraising; Mike Rothenberg, Founder, Rothenberg

Ventures, who made countless introductions to founders
of startups along the way; Jason Bornhorst, Founder and
r
CEO, First Opinion; Michael McDaniel, Founder and CEO, CEO, Filament Labs; Will Sauer, Director of Finance and
Reaction, Inc.; Russ Heddleston, Cofounder and CEO, Operations, Skycatch; Sanjay Dastoor, Cofounder, Boosted
o
DocSend; Ryan Allis, Cofounder and Chairman, Con- Boards; Adam Tichauer, former President and CEO, Play-
nect; Steven van Wel, Cofounder and CEO, Karma; Wade button; Deena Varshavskaya, Founder and CEO, Wanelo;
Eyerly, Cofounder and CEO, Beacon; Zvi Band, Cofounder Jeff Avallon, Cofounder, IdeaPaint; Jason Seats, Part-
y
and CEO, Contactually; and Will Haughey, Cofounder and ner, Techstars; Scott Harrison, Founder, charity: water;
Chief Blockhead, Tegu. Dan Martell, Founder, Clarity.fm; Nancy Duarte, author,
p
A few other people without whom this labor of love slide:ology; Tommy Leep, Chief Connector, Rothenberg
simply would not have been possible: Curtis Eggemeyer, Ventures; and Chi-Hua Chien, venture capitalist, Good-
o
CEO of Lemi Shine, who gave us a lot of encouragement water Capital, and Twitter, Facebook, and Spotify investor.
and the seed capital needed to continue our work. A book
is quite possibly the worst investment you can make, so
Evan Loomis would also like to thank:
C
we’re hopeful that Get Backed provides social returns
for Curtis; Steve Nelson, at Harvard Business School, Mom and Dad for always saying “go for it” and funding
t
who first introduced us to Tim Sullivan; Charlie Hoehn every crazy startup idea I’ve had—from lawn mowing to
and Tucker Max for their marketing genius; Erin at Able pressure washing and even wedding videography (what
o
Lending and Lori of 33Vincent for taking care of the small the heck was I thinking? I was terrible). I’ll pay you guys
details so we could keep our sights set on the bigger pic- back soon . . . Yes, soon . . . I promise . . .
ture; Steven Tomlinson, who opened our imaginations to Former President George H. W. Bush for inviting me to
N
the idea of “play”; Steven Eggert, former designer at frog, serve as his assistant during college. Watching him gen-
who took on the first designs of the book; Dave Blanchard, uinely care for people and write countless handwritten
Josh Kwan, Jon Hart, Jason Locy, Jon Tyson, and Dr. Steve notes humbled me and helped me understand why he was
o
Graves—our dear friends at Praxis who provided friend- one of the most powerful people in the world.
ship, insight, and encouragement along the way; Francis Former US Secretary of Defense Robert Gates and senior
Pedraza, our hero of the Friendship Loop, for allowing us lecturer Jim Olson, two former cold war spies and profes-
D to dig into his methodology and crack the code on relation-
x | Acknowledgments
sors at Texas A&M University, for casually suggesting that

s t
I look into investment banking after graduation. Their
counsel changed the course of my life.
Ian Sugarman, now Vice Chairman of Retail Investment
Po private investor and co-owner, San Antonio Spurs; Justin

Cox, Partner, Cox Partners; Thomas Lehrman, Founder,
Haystack Partners; Brad Allen, private investor. You’re all
r
Banking at Morgan Stanley, for giving me my first job on mentors and I’m thankful for your wisdom.
Wall Street. Ian meticulously taught me how to create pitch The last section of the book, titled “Introduction to the
o
decks and helped me realize that I love people more than Friendship Loop,” would have been hollow without my
cubicles and Microsoft Excel. closest friends, who embody true friendship. C.S. Lewis
Scott Erwin, an American hero and friend, who got shot said that “Friendship is the greatest of worldly goods,”
y
in Iraq, almost died, and lived to complete an Ironman and I could not agree more. Here are the people who
Triathlon and swim the English Channel. He constantly have made me better simply by being my friends: Taylor
p
inspires me to dream bigger and keep going when I get Jackson, Dave Thompson, Jason Ballard, Jonathan Lusk,
knocked down. Jared Fuson, Yobany Mayen, Trevor Brock, Jon Wolfshohl,
o
Dr. Steven Garber and Mark Rodgers, my former col- David Hollon, Ryan Nixon, Brent Baker, Brad Dunn, Will
leagues at Wedgwood Circle, for showing me how to ad- Haughey, Brock Dahl, Hunter Grunden, Sean Clifford,
vance “goodness, truth, and beauty for the common good” David Vennett, Justin Yarborough, Dave Blanchard,
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through the critical sectors of media and entertainment. Duncan Sahner, Clayton Christopher, Reese Ryan, Jay
Judi McQueary, my aunt and boss at Corinthian, for Kleberg, David Mebane, Jeff Harbach, Brian Haley, Curtis
t
being the very first investor in TreeHouse at a time when Eggemeyer, Kevin Robnett, Noah Riner, Jared Jonker,
there was nothing but the proverbial notes on a napkin. Kevin Patterson, AJ Gafford, Kevin Peterson, Derick
o
But I’m most thankful for her friendship, laughter, and joy- Thompson, Sly Majid, Trey Arbuckle, and Tim Cleveland.
ful spirit.
My cofounders and investors at TreeHouse, for teach-
N
ing me everything I know about startups and giving their
Evan Baehr would also like to thank:
hearts and souls to get our first store launched: Jason Ms. Hess, my high school debate coach, who taught me the
Ballard, Kevin Graham, Paul Yanosy, Peter Ackerson, and basics of speech and rhetoric and embedded in me my life-
o
Brian Williamson. Simply put, TreeHouse would have been long passion for communication.
a pipe dream without a few key investors backing us: Gar- Kenny Trout, for creating Excel Communications, giv-
rett Boone, Cofounder, The Container Store; Greg King, ing me my first chance to sell something—and yes, it was
D former President, Valero Energy Corporation; Bruce Hill,
BaehrLoomis_T_rev01.indd 11
door-to-door long-distance phone service.
Acknowledgments | xi
9/3/15 5:21 PM
s t
Kate Reilly, my Princeton college debate partner, with
whom I disagree on nearly every possible topic . . . which,
of course, made us unstoppable.
Po Peter Thiel, whose intellectual rigor demands answers

to questions such as: “What is something you believe that
no one else does?”
r
Robert George and Cornel West, two Princeton pro- Mike Maples, our first major investor, who has been
fessors who teach the world that two men of goodwill but the ultimate supporter and encourager at every turn, and
o
diverging opinions not only can but must have civil dis- who commented after our Series A: “You could sell ice to
course to advance the cause of humanity. Eskimos.”
My cofounder, Will Davis, who puts up with my antics Dylan Hogarty, who was the first person to ever say,
y
and is always a source of encouragement. Will extended “You know, you might actually want to try out this entre-
perhaps the most generous invitation to me five years ago preneurship thing.”
p
when he said, “I want to do this with you because I know And finally to Dave Crabbe, Brett Gibson, Joel Bryce,
that if something ever happened to me you’d care for my Will Davis, Mark Gundersen, and Mike Lage: You inspire,
o
family.” And I absolutely would. congratulate, coach, and help me become the person I was
Tony Deifell, who introduced me to one of the biggest made to be.
and most important questions of my life: “Why do you do The achievement of this publication is as much for each
C
what you do?” of you as it is for us. Thank you, thank you!
Sheryl Sandberg, who introduced me to Mark Zuckerberg
t
by saying, “Evan is the only person I’ve ever hired because
he asks great questions.”
N o
D o xii | Acknowledgments

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D o

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Introduction Po Fundraising for my startup almost wrecked my marriage.
Every Monday morning, I would fly out of Dulles Airport
and crisscross the country to pitch my dream of a new, sus-
r
tainable, home improvement store to potential investors.
The weeks and months dragged on. The dream started
o
to unravel.
Investors committed, only to bail months later because
the process was taking too long. My friends sent e-mails
y
by Evan Loomis with subject lines like, “Are you alive???” It was even worse
at home.
p
A creeping separation had started to set in between my
wife and me. We were spending too much time away from
o
each other. Our love was icing over. Our lives were diverg-
ing, and I hated the direction in which mine was headed.
I knew a lot about raising money. After college, I worked
C
as an investment banker on Wall Street, where I sold mega-
companies like Burger King to private equity firms. I had
t
analyzed hundreds, if not thousands, of deals. When I left
New York, I cofounded an angel investment group in DC.
o
I knew what investors wanted because I was one of them.
Every day I received e-mails from people looking for tips
on fundraising. I was the fundraising guy.
N
And yet, here I was, two years into launching TreeHouse
Home Improvement, with a third of my $7.5 million round
left to close in the worst housing crisis in US history. It
o
felt like Bill Murray’s 1993 classic Groundhog Day. In every
meeting, I relived the same maddening defeat over and
over again. A few friends had the courage to tell me that
D
the dream needed to die.
| 1
8/23/15 7:06 AM
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In November 2010, I finally admitted that there was no
way I could close the remainder of the round. This e-mail
was my white flag of surrender:
Po our investors and partners is “This is a great idea. Someone

will eventually do it, but the timing for the launch may be off.”
TEMPORARILY PUT THE BUSINESS IN HIBERNATION. In
Date: Tuesday, November 9, 2010
Subject: TreeHouse Update
Dear Friends and Investors:
or light of a great business concept and potentially bad timing,

we think that putting TreeHouse in hibernation is the right
course of action. It allows us to preserve all the intellectual,
relational, and financial capital that has been poured into the
business, and wait on alert for better timing.
Over two years ago, we started off with a unique vision to
launch a green home improvement store called TreeHouse
that would make sustainable building easy, accessible, and
fun . . . As you know, we have hit some roadblocks that
py This decision was not reached in haste, or without a lot of

consideration. We look forward to discussing or answering
any questions with you over the phone, but wanted to make
o
sure communication got out in a timely manner, so you are
have kept us from getting the necessary funding for our
released to take any steps you need to take.
first store.
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Again, we are proud to call you partners and friends, and
With this in mind, here are a few options our team has
we will continue to keep you informed of any developments.
considered:
Many sincere thanks on behalf of the entire TreeHouse team,
o t
KEEP PUSHING. Under this scenario, our team would keep
pushing to lock down the remaining investment capital. In
our opinion, and while our emotions and courage want to
walk this path, this is not the right choice. It is not sustainable
and as always, please do not hesitate to call us with any
questions.
Best, Evan
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to our team financially, it stretches our credibility and good
I had failed. We were done.
word with partners, and it fails to acknowledge the current
Then, a miracle happened. Two weeks after that e-mail
situation.
went out, I got a call from Greg King, one of my investors.
o
THROW IN THE TOWEL. This scenario would dissolve the “TreeHouse needs to come off the shelf,” he said. He would
idea, team, and legal entity. We do not believe this is the right help us raise the remaining $3 million.
course either. One of the consistent points of feedback from Within thirty days, we had closed the round.
D 2 | Introduction

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How Do You Launch
the Venture of Your
Po The purpose of this book is to demystify one of the
most intimidating parts of launching a venture: raising
money.
Dreams?
Sixty-three percent of today’s American twenty-somethings
or Seriously? Another
Book on Fundraising?
y
want to start a business.* By 2020, there will be an esti-
mated billion entrepreneurs worldwide. Whether it’s the
p
next Facebook, the next world-changing nonprofit, or the There’s no shortage of advice on fundraising. Most of it is
next coffee shop down the street, starting something is the terrible.
o
ambition of today’s generation. Self-described experts spout phrases like, “create a busi-
But here’s the dirty little secret: starting something is ness plan,” “show traction,” and “create urgency,” without
insanely hard. any practical insight into how to do what they suggest. A
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Launching the venture of your dreams takes more great strategy for a serial entrepreneur with a track rec-
hustle, more failure, and significantly more resources ord of success will likely be the worst possible advice for
t
than a lot of people can stomach. Yet, talk to any entre- a first-time founder. Experienced entrepreneurs forget
preneurs who’ve been through it and they will tell you what raising money is like when you have no network, no
o
one thing: it’s worth it. track record, and, at best, only a conceptual knowledge of
a term sheet. The entrepreneurs we know aren’t interested
in the theoretical best way to do something; they are inter-
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*Minda Zetlin, “Survey: 63% of 20-Somethings Want to Start a Business,” ested in what works. That’s why we (Evan Baehr and Evan
Inc., December 17, 2013, http://www.inc.com/minda-zetlin/63-percent-of-
20-somethings-want-to-own-a-business.html; and “An Entrepreneurial
Loomis, longtime friends) wrote this book. We wanted to
Generation of 18- to 34-Year-Olds Wants to Start Companies When give entrepreneurs what we wished we had had when rais-
o
the Economy Rebounds, According to New Poll,” Ewing Marion ing money for our ventures.
Kauffman Foundation, November 10, 2011, http://www.kauffman.org/
newsroom/2012/11/an- entrepreneurial-generation-of-18-to-34yearolds-wants-
to-start-companies-when-economy-rebounds-according-to-new-poll.
D Introduction | 3

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There’s a big gap between what
experienced entrepreneurs like
Po The Secret to
Raising Money
r
giving out as advice and the
specific circumstances in which
o
What we discovered is that the skill to raise the money you
young entrepreneurs are operating. need, get expert feedback, and build partnerships isn’t just
an X factor that some people have and others don’t. On the
y
—Deena Varshavskaya, contrary, it can be decoded.
founder and CEO, Wanelo There are specific habits and tools that aspiring entre-
p
preneurs can cultivate to dramatically increase the likeli-
hood that their ventures will succeed. We give you those
o
Over the last two years, we mentored dozens of first- skills and tools here.
time founders and interviewed angel investors, venture In the next several chapters, you will:
capitalists, directors of angel networks, heads of family
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investment offices, and CEOs of crowdfunding platforms. • Study the original pitch decks of startups that raised
We took improv classes. We infiltrated some of the coun- wildly successful funding rounds.
t
try’s biggest accelerators and angel groups, and sweet-
talked fifteen successful entrepreneurs into letting us • Access templates for common pitch deck ele-
ments, like identifying the problem, showing
o
show you exactly what they did to raise money, including
the pitch decks they showed investors. We’re excited to your solution, and distinguishing yourself from
write this book because we have done this and are doing the competition.
N
it now. In the middle of writing this book one of us scored • Find out which kind of capital to raise from
a $100 million business deal and one of us raised $25 mil- which people.
lion, which included the second-largest round ever raised
o
on the startup platform AngelList at the time. We did all • See e-mail scripts and techniques to get a meeting
of these things to answer one question: What does it really with absolutely anyone, including angel investors,
take to raise money? venture capitalists, and potential board members.
D 4 | Introduction

s t
Yet, as helpful as these techniques are, they are not the
secret to raising money.
Nearly every startup founder we interviewed had a
Po the future further down the field by surrounding them-

selves with like-minded brothers and sisters who believe in
what they are doing. Along the way, you may just find your-
r
“miracle” like the TreeHouse story you just read about— self with access to more cash than you need.
some unexpected occurrence that catapulted him or her
o
into ultimate success. As we dug in, we discovered that
these miracles weren’t really miraculous at all; they were
the direct result of relationships the founders had nurtured Part One: Create
y
earlier. For Loomis, his friendship with Greg King caused
Greg to put his own reputation on the line to help Loomis Your Pitch
p
close TreeHouse’s funding round.
The secret to raising money is one simple principle: suc- Part one is all about the pitch. It starts by introducing you
o
cessful fundraisers don’t raise money, they raise friends. to the pitch deck, why people make them, and why they
matter. Chapter 1 describes the birth of the pitch deck.
Chapter 2 outlines the key building blocks of a deck: ten
C
key slides you should start with. Then, chapters 3 through
Friendships Matter 5 focus in detail on three elements of your pitch deck and
t
pitching in general: story, design, and words. Chapter 6 is
We want you to crush it with your startup. But even more devoted entirely to the pitch decks that have successfully
o
than that, we want you to build friendships that outlast any raised money, and chapter 7 offers some practical exercises
term sheet and create true value for you, your community, for improving your pitching muscle.
and your venture. The different strategies for fundraising
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will come and go. Market dynamics, industry trends, and
timing make each venture’s fundraising journey uncharted
territory. Yet, the one constant across every startup, every Part Two: Get Backed
o
industry, every moment since the beginning of human life
on earth is the value of meaningful relationships. This book Part two is all about the fundraising process. Chapter 8 is
is really about challenging people to move their visions for an introduction to startup finance 101—how funding rounds
D Introduction | 5

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work, the difference between debt and equity, and an over-
view of basic terms in an agreement. Chapter 9 describes
which kinds of investors fund which kinds of companies.
Po ing relationships with people who have the power to take

your venture to the next level. The final part of chapter 13
coaches you through the elements of closing when an in-
r
Chapters 10 through 13 are the culmination of everything vestor says yes.
else in the book—a simple but powerful process for build-
y o
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Po Part
One
or
CREATE
y
o p
YOUR
PITCH
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What if you could take everything
world-changing about your venture
Po
r
and boil it down to a handful of
words and images—a bundle of
“ahas”—that you could pass along
to people who could help you take
your venture to the next level?
y o
o p
t C
N o
D o

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1 Po
The Birth of theo
r
Pitch Deck y
o p • What is a pitch deck?
t C • A short history of startup funding

• The pitch deck as your first prototype
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What Is a Pitch Deck?
Po A Short History of
Startup Funding
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A pitch deck is a series of words and images that illustrate
a venture’s story and business model.
o
Pitch decks do three things: they get people to under- If you were an entrepreneur in the 1960s, your options for
stand, they get people to care, and they get people to take funding were slim. Today, the startup landscape is over-
action. flowing with options.
y
Entrepreneurs have used them to raise money, recruit It’s not just in tech and health care. In 2014, $24.1 bil-
employees, and close customers, partners, and suppliers. lion were invested into 73,400 ventures in angel invest-
p
They are one of the most powerful tools early-stage entre- ment alone. Add another $48.3 billion in 4,356 deals from
preneurs have at their disposal. They represent everything venture capital. Then, double that from friends’ and fam-
o
that is valuable about the startup—the vision, the team be- ilies’ investments. Simultaneously, crowdfunding sites
hind that vision, the core elements of its business model, like Kickstarter and Indiegogo have opened the door for
and the insights into the customer that the venture plans entirely new ways for entrepreneurs to fund and validate
C
to take advantage of and the industry that the venture a business. With the passing of Title IV of the JOBS Act
hopes to disrupt. in 2012, almost anyone will be able to invest and receive
t
There are two kinds of pitch decks: equity in startups, not just the ultra-wealthy among us. We
have moved from a few venture capital firms investing a
o
1. Presentation deck. A visual to assist your oral few million dollars in startups to an almost infinite variety
presentation in an investor meeting or on stage at a of funding sources collectively investing big-time money.
demo day. The funding that many visionaries and entrepreneurs
N
need is more available than it has ever been. You probably
2. Reading deck. A more thorough and detailed deck
already know all this.
that can be read and understood without you there.
You also probably know something else: getting funded
o
is hard. Depending on whom you talk to, it’s either way too
hard or not nearly hard enough.
You can guess what an entrepreneur would say. Entre-
D 10 | CREATE YOUR PITCH

preneurs hate being held back. For a founder struggling to

s t
get funded, the problem is that there isn’t nearly enough
money to go around. Investors, on the other hand, hate los-
ing money. Yet, they know that most of the startups they
Po expect the market to value the company when they sell it

or take it public.
This “business in sixty pages or less” gave entrepre-
r
invest in will fail. For them, there aren’t nearly enough neurs everything they needed to execute the venture. All
good startups to go around. that was left was for the right investor to come along, see
o
Both sides agree that there needs to be a better way for the value of the plan, and pour a ton of cash into it. The
the startups that have the best chance of success to get idea caught full steam in the 1980s when every business
in front of the right kind of funding. To get there, entre- professor, consultant, and professional coach in the nation
y
preneurs and investors look for ways to date each other— published books to get the everyday Joe to become the
opportunities to charm or size up those on the other side next Steve Jobs or Bill Gates through one simple tool: the
p
of the table. Often, though not always, this means entre- business plan. Sounds great, right?
preneurs spend their time wooing the investor while the Business plans for startups turn out to be one of those
o
investor plays the role of coy mistress, oscillating between great ideas that fall apart in real life. Serial entrepreneur
flirtation and outright rejection. and Stanford professor Steve Blank puts it this way, “No
business plan survives first contact with a customer.” Plans
C
work fine when all the information you need is available
The Age of the Business Plan and all you have to do is execute. By definition, though, a
t
For years, the de facto entrée into this dating game was the startup exists in an environment of extreme uncertainty. A
business plan. startup, as Steve Blank puts it, is an organization in search
o
Originating with companies like DuPont and GM that of a business model, not an organization with a plan to exe-
had large government contracts with the US Department cute. Between 1982 and 1989, in the middle of the business
of Defense during World War II, the business plan takes plan craze, 79 percent of the companies in the Inc. 500 were
N
cues from strategic planning within the US military. After launched without a formal business plan (including Apple
an exhaustively thorough analysis of the industry, the and Microsoft). A more recent study found the same con-
competitive landscape, and target and potential markets, clusion: business plans aren’t critical to a startup’s success.
o
aspiring entrepreneurs would create a play-by-play of the Over the last ten years, and with the encouragement of
business from launch to exit, articulating every detail of books like Eric Ries’s The Lean Startup, more and more
the marketing and operations plans, year-by-year growth entrepreneurs are abandoning the business plan as an
D in revenue and costs, and, ultimately, the amount they opportunity analysis and launch tool in favor of tools that
The Birth of the Pitch Deck | 11

s t
give them the flexibility to test and iterate the critical as-
sumptions of their business model—assumptions like the
problem you are solving, the cost of acquiring a single cus-
Po out the obviously unqualified prospects and clue them in

to opportunities where they could do a more thorough pro-
cess of due diligence.
r
tomer, and your defense against competition. Perhaps the greatest advantage of a pitch deck was that
it allowed the presenter to tell a great story. Investment
o
bankers, like all great salespeople, knew that the data they
The Rise of the Pitch Deck had on a company wasn’t nearly as important as their abil-
Entrepreneurs weren’t the only ones to realize the busi- ity to tell a compelling story about that company. Like a
y
ness plan didn’t work. With the explosion of venture capi- filmmaker crafting the arc of a great movie, investment
tal starting in the 1970s, the investment banking industry bankers made their living telling stories of how awesome
p
found itself faced with ever-increasing stacks of poten- the world would be if ACME Corp. bought AJAX Corp. to
tial deals. Tossing the business plan, it began to adopt make the super-company ACMAJAX (the marketing de-
o
new methods to quickly screen and pitch the opportu- partment would sort out the naming). Pitch decks became
nities before it. By using new presentation software like the medium to tell that story. By the time Loomis entered
PowerPoint, investment bankers could replace the busi- the “Analyst Class of 2004” at a bulge bracket investment
C
ness plan with a series of slides that displayed big ideas, bank on Wall Street, his company devoted nearly a month
data, and other visuals while they gave a short pitch for of its three-month employee training program to Power-
t
the venture. Point. (You read that right.)
These presentations became known as “pitch decks.” The next year, a serial entrepreneur named Paul Graham
o
In addition to being shorter, this new way of presenting launched a three-month summer camp for startups. In
the business had several other key benefits. Pitch decks it, very-early-stage startups would get access to mentor-
could be easily revised and customized, for example. A ing, connections, and a small amount of seed money. The
N
business plan took months to draft and redraft, but with a focus of the program, which Graham named Y Combina-
pitch deck, you could swap out individual slides for others tor, would be what he called “Demo Day,” an all-day event
and rework your entire presentation in a few minutes. You where each team pitches its startup to a room of investors
o
could also create a readable version of the presentation using a short presentation and a slide deck. As for busi-
with the script written down on the slides so it could be ness plans, “Not for us,” the company writes on its site’s
printed out and sent to an investor ahead of time. Investors FAQ. “We love demos, but we never read business plans.”
D loved the new format, using the short presentations to filter
12 | CREATE YOUR PITCH

By 2011, that summer camp had become the “tech world’s

s t
most prestigious program for budding digital entrepre-
neurs,” according to Wired magazine. By then, it repre-
sented just one of as many as 200 startup accelerators in
Po “What if I . . . ?” or “Why isn’t there a . . . ?” or “Wouldn’t

the world be so much better if . . . ?” That seed, once planted,
grows so invasively that it’s impossible to ignore and you
r
the United States. can’t help but do something about it.
That same year, the Wall Street Journal posed a ques- Now, that first moment of insight might be totally wrong
o
tion to a forum of startup mentors: “Where do founders (it usually is). But what is most certainly not wrong is the
go wrong with business plans?” The short answer: when questioning—that burning, impossible to ignore “why?”
they make one. The response from one of the mentors was The hidden power of the pitch deck is its ability to infect
y
to say, “Burn your business plan—before it burns you.” In- others with the “why?”
stead, the mentors said, focus on two things: your business Think about the excitement you feel about your venture.
p
model and your pitch. In another response titled, “Your You probably can’t help but tell people about it. There’s a
Business Plan Isn’t a Fundraising Tool Anymore,” venture good chance your husband or wife is jealous. Let’s be hon-
o
capitalist Paul Lee writes: “The best pitches come with a est; you are obsessed. In another time period, you wouldn’t
10–12 slide PowerPoint that succinctly explains the busi- be an entrepreneur; you’d be a crazy person. That’s the kind
ness, with a link to the working service or website and the of excitement you want others to feel when you pitch them.
C
entrepreneurs biography/past experience. That’s it.” But getting others that excited about your idea will be mad-
Despite the cries from a remnant of business professors, deningly difficult if you don’t know how to communicate it.
t
consultants, and bank officers, the business plan was dead.
In the world of startups, a new kind of tool had been born.
Getting Clarity on Your Idea
The Pitch Deck as

Your First Prototype N o Too often, people passionate about ideas have articulated
them across scraps of paper, e-mails, and thoughts in their
head. This constellation of notes looks a lot like the way
the idea looks in your brain: thousands of neurons firing
thoughts, making connections through synapses in a web
o
of what were once disconnected memories and inputs. But
if you want someone else to understand that mess of a
You’re at work, doing what you do every day, when, all of a web, you’ve got to find a way to get it into something more
D sudden, this brilliant idea pops into your head.
accessible.
The Birth of the Pitch Deck | 13
8/23/15 7:06 AM
s t
Committing a business model to paper is the first step
to making the model better. It forces the entrepreneur to
break down the business into each of its components and
Po ready to send in advance. This artifact then becomes some-

thing others can react to, comment on, and add or subtract
from. There is no faster or cheaper way to iterate your ven-
r
to articulate those components clearly. You might say you ture when it is in its earliest stages than to create and revise
can’t make a business model better until you actually have a pitch deck. For many pre-seed-stage startups, the pitch
o
the business model written down. deck literally is the startup, the very first prototype. It artic-
For first-time founders, advice on their idea is more valu- ulates the critical assumptions of your venture, and almost
able than money and is likely to be a precursor to it. There’s more importantly, it gives you a chance to practice telling
y
an old cliché we heard often while interviewing investors others why they should care about it.
and entrepreneurs for this book: If you want advice for So how do you create a pitch deck for your venture? The
p
your startup, ask for money. If you want money, ask for basic anatomy of a pitch deck is surprisingly simple. It
advice. To succeed, you will need both. aligns with the critical questions investors ask themselves
o
You owe it to yourself and anyone you meet with to have a when looking at a potential opportunity. We introduce you
description of the vision and business model of the venture to them next.
t C
N o
D o 14 | CREATE YOUR PITCH

s t
2 P o
o r
The Building Blocks
y
of a Pitch Deck
p
C o The building blocks of a pitch deck are the slides. Slides are like the panels of a comic strip;
they break down the story of your venture into discrete digestible chunks. Each slide high-
lights a different aspect of the venture and furthers the plot of the pitch. Eventually, you’ll have
t
a whole archive of slides to draw from and sequence for each meeting or presentation. These
are the essential ten (not including your cover page):
o
Cover
N
Overview Opportunity Problem Solution Traction
o
Customer or Business
Competition Team Use of Funds
Market Model
D | 15

s t
Cover
What should I expect?
Po
What is it?
The cover slide captures the audience’s attention, sets the
r
tone for the pitch, and serves as “white space” during a pre-
sentation so you can express gratitude for your audience’s
o
time, show your passion for your venture, and build trust
by mentioning mutual connections.
MAPPING THE WORLD WITH ROBOTS

February 2015
py
What should I demonstrate?
• Clean logo. Your logo is the face of your brand;
it can be very important to your overall image.
C o •
•
Inviting picture. You might include an engaging
picture of your product or customer.
Descriptive title. Put “Investor Briefing” or “Inves-

tor Presentation” somewhere on the front cover
t
with the date. Dates help you keep track of differ-
Skycatch ent versions.
N o funding the fortune 5 million

What questions do I need to answer?
• Does the cover make you want to open the pitch
deck?
• Does the cover visual communicate what the
o
Karma. WiFi Made for Sharing.
Karma Able
product is or who it serves?
D 16
| CREATE YOUR PITCH
8/23/15 7:06 AM
s t
Overview
Who are we?
Po
What is it?
The company overview is your “elevator pitch”—the fifteen-
r
second version of your deck. It describes a problem you
see in the world and how you are going to solve it. Give
o
your audience a small taste of what your company does,
but leave them hungry for more.
y
p
• Clarity. It should be extremely easy to understand
what the company does.
Contactually is a relationship marketing platform

that helps professionals keep and generate business from
their existing network.
C o • Swagger. Startups are bold, audacious undertakings.

Your summary of the venture should demonstrate
that you have the energy and the confidence to take
on something big.
t
• Passion. If you don’t care about what you’re doing,
no one else will.
Contactually
Meet Karma
o
Karma is the easiest way to get online. By unlocking WiFi we
N
will make it possible for everyone to bring their own
bandwidth, anywhere in the world.
Today, our Social Bandwidth hotspot brings frictionless WiFi

sharing to the masses. It's WiFi for everyone to use.
Reaction Systems, inc.
Building hardware &

software to (re)meet  
a basic human need:
shelter.
And, we know how to turn a substantial profit  
• What exactly does your company do?
• What industry are you in?
o
doing it. By targeting vertical markets valued at over  
• Is this a novel idea?

$11.4 billion annually with innovative products and  
services, we are going to change the world.
Karma Reaction, Inc.
D The Building Blocks of a Pitch Deck | 17

s t
DEEP DIVE
The Elevator Pitch Po Pick a fight. Don’t be afraid to build off of a universally
hated experience. Picking a fight can be a clear sign that
you’re solving a real problem.
An elevator pitch is the simplest, quickest way to describe

what your venture is and what makes it so amazing. It’s the
or Tell your vision. Don’t get lost in describing the product.
Describe the new and better world you want your product
to help create.
Examples
y
pitch you prepare for when you only have fifteen seconds
to catch someone’s attention—like when you meet him in
The first [what you are] that doesn’t suck.
p
an elevator or see him on a street waiting for an Uber or
Lyft ride. • SilverCar: The first car rental company that doesn’t
o
The great screenwriter Blake Snyder argued that the se- suck.
cret to all great pitches is learning to combine the familiar
• Karma: The first mobile provider that doesn’t suck.
with the intriguing. You must start with something your
C
audience knows well. Then, surprise them with an ironic
The [easiest/fastest/funnest/best] way to [your solution].
twist that captures their interest and will make them want
t
to know more. • Shyp: The easiest way to ship your stuff.
Use an analogy. Do not assume your audience knows what
o
It’s [analogy] for [your space].
you are talking about. Describe your venture with com-
mon language and universal images that appeal to your • TreeHouse: It’s Whole Foods for Home Depot.
prospective investor and future customers.
N
Don’t talk about what your product does; talk about what it
does for your customer. This is a really common mistake
We help [your customer] do [your solution] by [your prod-
uct]. Or, We are a [your product] that helps [your customer]
do [your solution].
o
for engineer types. The classic maxim from Harvard pro-
fessor Ted Levitt illustrates the idea well: “People buy a ¼" • Contactually: Contactually is a relationship marketing
drill bit not because they want a ¼" drill bit, but because platform that helps professionals keep and generate
D they want a ¼" hole.”
18 |
CREATE YOUR PITCH
business from their existing networks.
8/23/15 7:06 AM
s t
Opportunity
What’s happening in this market?
Po What is it?
The opportunity slide is your chance to describe your in-
r
dustry and how your business will work within it. You will
Why now? describe trends within that environment, the size of your
o
market, and the growth potential of your venture.
The opportunity slide is the 40,000-foot picture of your
The Housing Gap product’s space. You want the investors to see the trends
y
and market conditions that will give you an entrance into
There is a housing gap today Ð a 45 to 90 day long window where there the market and a competitive position. If your audience
p
are simply no mass housing systems currently available that can be agrees with you on how things actually are right now, they
deployed in a cost effective manner. Reaction housing units fill that gap.
will be open to the particular problems and solution you
o
describe.

\
Disaster Event
+0
days
Opportunity
+ 90
days
t C
Temporary Housing Arrives Recovery Complete
+ 18
months
• Explosive market sectors. By explosive, we mean
growing very, very fast. The faster your market is
growing, the bigger the opportunity for your ven-
o
ture will be.
Reaction, Inc.
• Confusion and ambiguity in the market. A lack of
clarity allows ventures to easily differentiate them-
N
ACROSS 300B+ IN APPLICATIONS
GROWTH IN AERIAL DATA MARKET
selves from others.
FOOTWEAR
• Thoroughness. This slide is proof that you have

HELMETS M I L I TA R Y
SHIN
GUARDS
HEARING
Market becomes less interested in drones
AIDS
Replaced with demand for aerial data
o
ORTHOTICS
done some serious research and really understand

HEAD
PHONES Tech evolves to fulfill data demands
BRAS CLOTHING
BRACES
the market better than your audience does.

SOLS Systems Skycatch
D The Building Blocks of a Pitch Deck
| 19
8/23/15 7:06 AM
s t
• What trends is your company riding?
Po Problem
What are you trying to solve?
• How big is the market?
• How big can your company be?
• What are the macro- and micro-trends that your
company will be riding?
or HUMAN SHELTER IS RESPONSIBLE FOR THE MAJORITY OF ENERGY,
WATER, AND RESOURCE USE. THIS IS THE PROBLEM, AND
OPPORTUNITY, THAT ANIMATES EVERYTHING WE DO AT TREEHOUSE.
py
C o 72% ELECTRICITY USE 30% WASTE OUTPUT
t
38% CO2 EMISSIONS 14% WATER USE
TreeHouse
o
1
Ò ONLINE DATINGÓ FOR 23-36
Moms Need Discussion Current offerings donÕ t appeal to this generation.
2M Moms At Baby.com.br 80%
Singles 18-301
N
At Baby.com.br I helped build a base
18% and audience of over 2 million moms, Ò I donÕ t want to create

33% which we communicate with on a daily
a dating site profile.”
more MONTHLY
basis. In engaging with these moms, I
found them actively discussing the 40%
health and development of their “I don’t think I’d find the

More Smartphones Track Health kids with us and others.
right kind of person.”
Moms are 18% more likely 33% of smartphone-owning Moms have an emotional need to
to own a smartphone than moms used it for health and
discuss their children. They don’t need
any other adult. wellness last month. 0%
answers so much as conversation.
Life g Si
te Site
ing atin ing
Dat dD Dat
o
Bad Trie Use
INFO FROM BABYCENTER SURVEY, MARCH 2011
1 Survey of ~300 people conducted by Hinge in 2012 and confirmed by TechCrunch article Oct 21, 2013
Confidential | Copyright 2013 Cleod9 Inc
Moms have 1st
Team
a problem Opinion
Tuesday, October 22, 13
First Opinion Hinge
D 20
| CREATE YOUR PITCH
8/23/15 7:06 AM
s t
What is it?
Entrepreneurship, at its core, is about solving problems.
Po • Deep understanding. Confidently and empathet-

ically display how well you understand the com-
plex market dynamics surrounding the problem.
r
The bigger the problem, the better.
• A specific person. Consider presenting the prob-
In your problem slide, describe the problem you are
lem by telling a short story of a real person and
o
solving and how and why that problem is painful. Your au-
how he experiences the problem.
dience should feel as if an injustice has been done. In a
meeting, you’ll know if your problem hits home when the
y
investors begin nodding their heads in agreement. De- What questions do I need to answer?
scribe the problem at a high level first and then quickly
• What is the problem?
p
transition to a specific story of a customer to make the
problem personal. People don’t empathize with big, gen- • How big is the problem?
o
eral problems; they empathize with the struggles of spe-
• Why does the problem exist?
cific people with names and faces.
Not all companies solve new problems; some focus on • How is the problem currently being addressed?
C
solving age-old problems in a way that changes customer
preferences. This is especially true in apparel, restaurants,
t
and many consumer product goods. If you have one of
these ventures, you should focus on the opportunity be-
o
fore you (the previous slide) rather than the problem you
are trying to solve.
•
N
A big problem in a big market. Provide a very large
o
and specific number of people who feel the pain of
this problem every day.

s t
Solution
What are you doing about it?
Po What is it?
By this point, you and your audience agree on what is hap-
r
pening in the industry and you have introduced a huge
problem. Now, it is time to pull out all the stops. Show them
o
your magic, your one-of-a-kind solution to the problem.
You want the investors to marvel at it. You can also remind
them how you can defend what you are doing through intel-
y
lectual property claims. Develop use cases to demonstrate
how your customer will be delighted with your solution.
p
Make your solution as realistic and interactive as possi-
ble. In meetings, bring the physical product or do an inter-
o
active demonstration. Short (one- to three-minute) videos,
illustrations, screenshots, pictures, prototypes, samples,
sketches, or demos are all great ways to show rather than
C
tell your solution.
If you learn nothing from this book, remember this:
t
Connect
never use bullet points for your solution slide!
HOW HINGE WORKS
o
Tegu is building the world’s most innovative premium toy company.
Better research. Better design. And, a modern brand to boot.
No Profile

One-click signup via Facebook
People already have an identity.
Right People
•
Friends of friends, or their friends
Uses the Facebook social graph
Beauty. There should be an element of elegance
N
and other ambient information
to your solution. It should feel like the way things

Moves Offline
Social validation + natural intros
Friend in common and content-rich

introductions facilitate meetings
2
CONFIDENTIAL
should be.
Tegu
•
Hinge
Surprise. Your solution should feel like nothing

your audience has ever seen.

s t
• Repeatable and scalable. It should be evident in your
solution that what you are building can be replicated
across the market.
Po Traction
What evidence do you have that shows
•
•
Solving something painful. It should be clear that
your solution relieves a persistant pain point the
customer currently experiences.
Team excellence. This is your chance to brag and
or this will be successful?
We’ve built a reliable, scalable
y
show off that you have an awesome team that has
built something that delights. inside sales model

• Does it solve the customer’s problems like magic?
• Is the customer going to crave this product?
o p •
•
•
•
3-person inbound sales team
Each rep owns $400k new ARR
(8x cost)
Customer size: 1 to 73 seats
Payback period < 3 months 38%
Trials
C
Qualifying Call
$453 $110 22%
• What will the customer’s life be like once the prob- Annual
Contract Value
CAC % Annual Accts
25%
t
(vs Monthly) 88%
Conv Rate
lem is solved? Check In Call
$898 3.46 24 days

• How are you going to pull this off?
73%
Customer CAC Ratio Avg Sales Cycle Close Sale
o
LTV (ACV * Gross %) / CAC
• Is it awesome? Contactually
Sales Strategy.
N
TREEHOUSE QUARTERLY REVENUE
$XXX, XXX, XXX
•  Digital •  Cost to Acquire: $1K

$XXX, XXX, XXX
•  In-person •  Estimated Customer:
$XXX, XXX, XXX •  Direct mail LTV $32K
•  Trial flights
o
$XXX, XXX, XXX •  Brand Ambassadors
$XXX, XXX, XXX
Acquisition
Methods
Cost & LTV
$XXX, XXX, XXX
$XXX, XXX, XXX
2012 - Q1 2012 - Q2 2012 - Q3 2012 - Q4 2013 - Q1 2013 - Q2 2013 - Q3 2013 - Q4 2014 - Q1 2014 - Q2 2014 - Q3 2014 - Q4
8
D
TreeHouse Beacon
The Building Blocks of a Pitch Deck | 23

s t
What is it?
The goal of this slide is to demonstrate that each of your
Po What questions do I need to answer?

• Is there massive growth?
r
assumptions about the venture is proving true and you
• Where are the venture’s assumptions proving true?
are making significant progress. The most common way
• What is the strategy to reach and close more
o
to show traction is through growing sales or users—one
with the “hockey-stick” graph—but you can also focus on customers?
other key metrics you have identified. Investors don’t want
y
to feel that a venture needs them. Traction helps convince
an investor that the idea is going to be a success no matter
p
what. If you are preproduct and don’t have any meaning-
ful milestones or metrics to display, you can use this slide
o
as an opportunity to illustrate your sales and marketing
strategy.

• A pattern of fast-growing momentum.
t C
• Clarity around what you are measuring and why it
matters.
N o
• A clear sales process you use to attract, educate,
qualify, close, and provide after-sale service for
your customers.

s t
Customer or Market
Who are your customers—and how many
Po What is it?
In this slide, you demonstrate how well you know your cus-
r
tomers and the market they represent. Describe where they
of them are out there? live, what they like to do, and how much they’d be willing
o
to spend. If you already have sales, you can use those as an
example. Also describe the market, that is, how many po-
Go to Market Strategy
Focus on three vertical markets provides stable & diverse cash flow tential customers are out there who will want to buy your
y
product.
We will generate a steady cash flow through direct sales and support  
of the Exo Housing System components to three vertical markets.
1. FIELD SERVICES
Science research stations; Military;
Utilities & Construction base camps
Sales Cycle:
Short Medium Long
2. RECREATIONAL
Large scale multi-day music &
sporting events; camping & hunting
Sales Cycle:
Short Medium Long
3. DISASTER RESPONSE
Government agencies &
suppliers; small to large NGO's
Sales Cycle:
Short Medium Long
o p What should I demonstrate?

•
•
The customer. Describe the person in a way that
reminds listeners of someone they know.
A clearly defined market. Give specific numbers
C
Example Customers: Example Customers: Example Customers:
NASA 
Variety of agencies and universities 
SXSW / ACL / Coachella 
Large Event Organizers  
FEMA’s Suppliers
United Nations
for how many people fit your customer descrip-
Cabela’s / REI / Other “Outfitters”  
tions. Include how many people might possibly
t
U.S. Military  Red Cross
Foreign Militaries  Wal-Mart (Outfitter)  Foreign Governments
Various Site Operators
buy your product, what percentage of those people

City & County Governments Variety of small & large NGOs
Worth over $3.2b annually Worth over $156m annually Worth over $8.1b annually
you expect to buy it, and which ones you will tar-
Reaction, Inc.
We target the 8M professional

service providers in the US
Financial Planners
IT Consultants
Other Professionals
238K
311K
1,762K
1,389K
Attorneys
895K
Consulting Engineers
N o ¥ We sell to both individuals

and companies
¥ Our most successful
customers are top-
performers that realize
high ROI
CHANNEL
P O D I AT R Y
PHYSICAL THERAPY
OPPORTUNITY SIZE
CUSTOMERS
8,820
10,000
1% MARKETSHARE
2,646,000
1,500,000
10% MARKETSHARE
26,460,000
15,000,000
50% MARKETSHARE
132,300,000
75,000,000
•
get first.
Revenue. It’s much easier to argue that there’s

a demand for your product if you have paying
customers.
o
421K Residential RE Agents
¥ We’ve specifically focused

Advert/Marketing 844K
Consultants
612K
Commercial RE Agents
701K 718K
on residential real estate CHIROPRACTORS 51,000 7,650,000 76,500,000 382,500,000
(30% of paid accounts) and

Insurance Agents
Accountants
are expanding to other
$3.9B TAM verticals in 2014 CUSTOMERS 237,000,00 71,100,000 7 11 , 0 0 0 , 0 0 0 3,555,000,000
(at current price point)
• Who is your customer(s)?

Source: Hoovers
Contactually SOLS Systems
D
8/23/15 7:06 AM
s t
• How will you reach the customer?
• What is the acquisition cost per customer?
Po DEEP DIVE
Market Sizing
r
• Is your customer willing to pay for your product
or service?
y o Market sizing is about answering a few key questions on

who your customers are, how they are segmented, and how
big the opportunity they represent is. The science of market
sizing is finding hard data on your customers—how many
p
there are, the amount of revenue you could get from each
customer, and the percentage of the market you hope to cap-
o
ture. The art of market sizing is deciding what key charac-
teristics differentiate your customers from everyone else in
the world in order to make those calculations. For ventures
C
that are targeting new markets or helping to create one, the
challenge of market sizing becomes even harder. You can
t
simplify the process by focusing on those key questions
that hide behind the terms many investors use.
N o Total addressable market:

How big can this get?
The total addressable market (TAM) is about figuring

out how many people could possibly buy your product,
o
how much revenue you could make from each one, and
the product of those two numbers. Many ventures find
TAM by searching industry profiles from big research

s t
companies like Gartner, Forrester, Dun & Bradstreet, and
Hoover’s for big, sweeping, industrywide categories like
“e-commerce” and use whatever number they give for that
Po need done that they could hire your product to do. To find
these customers, you have to find special characteristics
that only your customers have. These characteristics are
r
industry. A more reliable way to find TAM is to pick one unlikely to be traditional ones like location, industry, or
to two relevant characteristics (that is, “e-commerce busi- income level. Harvard professor Clayton Christensen de-
o
nesses in America”) and multiply the number of people or scribes a fast-food restaurant that was trying to improve
businesses with those characteristics by your expected its milkshake sales. When traditional segments like demo-
lifetime value of a single customer. graphics failed, it started looking at the “job” that people
y
were hiring a milkshake to do. When it dug in, the com-
Served addressable market: pany found that most people bought milkshakes either to
p
Who do you plan to serve—and how entertain themselves during a long morning commute or
big an opportunity is that? to treat a son or daughter in the afternoon. This insight
o
helped it improve its product and gave it specific filters for
The served addressable market (SAM) is a smaller collec- segmenting its customers (that is, those with long morning
tion of potential customers who you are actively choosing commutes or parents with small children). For your beach-
C
to serve. With SAM, you are increasing your degree of res- head, choose a job that people hire your product to do, find
olution into who your customers are by choosing one to two a measurable characteristic that unites those people, count
t
more characteristics, like location or product, and filtering them up, and multiply them by your expected lifetime cus-
your bigger TAM with them. The process for calculating tomer value.
o
SAM is the same as TAM: choose your filters, count the
number of people who match those filters, and multiply by
your expected lifetime value of a single customer.
Beachhead market:
N
Who are you selling to first?
D o Your beachhead market is the first market you will sell

to. These customers should all have a similar job they

s t
Competition
Who or what will steal your customers?
Po What is it?
Every venture has competition. Every venture.
r
Your customers must be doing something right now to
cope with the problem you solve. That “something” is your
o
competitor.
Able = Network Lending to SMB List competitors and describe how each competes in the
market. Then, show what differentiates you from competi-
y
tors and what advantage you have over them. Partnerships,
Consumer SMB technology expertise, intellectual property, simplicity,
p
business processes, and networks can all be significant ad-
1:5 relationship vantages. Many founders find it helpful to create a map of
Network
o
1 borrower, 5+ backers the competitive landscape, using important aspects of the
product as x and y axes. For example, if you have a prod-
uct that is both priced affordably and is a great value, you
C
Traditional 1:1 relationship
could put “cost” on the x axis and “value” on the y axis and
place your product in the top-left quadrant (high value, low
t
cost), with the rest of your competitors spread throughout
the other quadrants. By doing this, you visually demon-
Able
o
strate how your product differentiates itself from other
Competitive Landscape
WeÕ re uniquely positioned against
Our closest, existing competitors
Despite a tremendous TAM, at present there are no direct other competitors & partners
players in the market.
competitors in market. Here are the closest competitors by type.
N
Relationship Marketing
Marketing
SFA / CRM
Automation
MIL. SPEC TENTS
¥ Inexpensive
¥ Very portable
MODIFIED CONTAINERS
¥ Cheap materials
¥ Mass shipping friendly
TRAVEL TRAILERS
¥ Kitchen & restroom

¥ Ò Trailer ParkÓ feel
PREFAB STRUCTURES
¥ Good for long durations

¥ Kitchen & restroom
¥ No privacy ¥ Lots of hand fabrication ¥ Low volume transport ¥ Long lead times
•
¥ Not secure ¥ Needs heavy machinery ¥ Expensive hookups ¥ Low volume transport
Industry knowledge. You should know your competi-

Competitors: Competitors: Competitors: Competitors:
Eureka! Global Portable Gulfstream Coach Clayton Homes
Mahaffey  Industrial Crewquarters  Keystone  Action Mobile Industries 
o
HDT Global Aztec Container Forest River Pacific Mobile
$3,600 + $16,390 + $18,000 + $26,000 +

= Contactually Integration Partner Industry-specific competitors (Ex: Real Estate)
tors and their unique advantages and disadvantages.
Reaction, Inc. Contactually

s t
• Sober judgment. Entrepreneurs caught up in the
brilliance of their own ideas might miss major
warning signs. An investor wants to know whether
Po Business Model
How will you make money?
r
or not you are underestimating the threat of
competition.
•
Differentiation. Is it clear that you are different
enough to compete?
Unique advantage. What is your specific advantage

over your competitors?
y o
• Who are your primary and secondary competi-
tors and in what ways do they compete for your
o p
C
customers?
• Are there any unknown or potential competitors Tegu
entered the market?
o
• Do you displace commonly used companies? t
that would have a better advantage than you if they
• How will you disrupt the current competitive

●
●
●
●
Unit Economics.
(1 Market Ð Steady State)
1 Members per Market: 1,000

2 Revenue per Member: $2000/MO
3 Monthly Recurring Revenue: $2MM
N
●
● 4 Aircraft Cost: $1,500/HR; $1MM/MO
landscape? 5 GROSS PROFIT MARGIN: 45%
Beacon
• Are you faster, cheaper, better?
DocSend
D o • Why won’t an incumbent rip your product off and

roll it out faster than you can?

s t
What is it?
Don’t worry; showing how the business makes money is
Po What should I demonstrate?

• Consistency. There should be a clear relationship be-
r
much simpler than you think. tween how costs and revenues grow over time.
For example, a solid financial model will answer the fol-
• Financial literacy. You know how to think about the
o
lowing questions:
financials of a startup.
1. How much does it cost to acquire a customer? • Level-headedness. You are not overly optimistic
y
about your projections or too cautious.
2. How much cash will you make from that customer,
over the course of their lifetime with you?
3. How do your costs break down, per unit and on a

monthly basis?
Prerevenue companies may have the good fortune of

o p What questions do I need to answer?
• Can you acquire customers for less than a third of
their lifetime value?
• What is your monthly burn rate—how much money
C
making up assumptions and financials, but that is not
are you spending a month?
an excuse for having unrealistic projections. Since the
t
pitch deck is designed to introduce the idea, it’s not too • Are the revenue projections reasonable?
important to show a full-blown financial model with every
• Are costs legitimate?
o
assumption, sensitivity, and margin analysis. However,
it should include the important aspects such as revenue,
gross profit, earnings before interest, taxes, depreciation,
N
and amortization (EBITDA), net income, burn rate, and
cash flow. Equally as important is to contextualize your
math (as in, “if we get 1 percent of the market, then we will
o
have hit our revenue projection”).

s t
DEEP DIVE
How Financial Models Work Po

Assumptions ➞ [create] ➞
All financial models begin with as-
Projections
or
➞ [that give you] ➞ Critical Insights
Those assumptions, played out over The reason you create a financial model
y
sumptions—a series of guesses about time, create projections for the venture’s is to gain a few critical insights about
when a business will gain customers, future financial health. A full financial the venture that can tell you how risky
p
how many customers it will gain, and model will have three projections: or attractive the opportunity is:
how that growth will affect costs and, • Income statement. How much • Cash flow. Will it make money?
o
ultimately, profit. money the business brought in When?
Common assumptions: through sales, the cost of making • Burn rate. How much cash are you
• Customer acquisition cost. How and selling the product, and the
C
losing each month?
much does it cost to acquire one amount of money left over (net
customer? income). • Profit margin. Your net income di-
t
vided by revenues.
• Revenue growth. How fast do you • Cash flow statement. How much
expect revenue to grow? By how cash a business has in the bank. • Breakeven. When will the venture
o
many customers a month? By what With complex businesses that have turn cash flow positive?
percentage a month? things like inventory or debt, a cash • Pricing. Do small decreases in pric-
N
flow statement can be very different ing eat up your profit margin and
from its income statement. cause you to run out of cash?
• Balance sheet. A list of a venture’s
o
assets—things like cash, buildings,
and inventory—balanced against
its liabilities—things like debt—and
D
all the owners’ equity stakes.
8/23/15 7:06 AM
s t
Team
Who is going to pull this off?
PoWhat is it?
In the team slide, you want to give the background for
r
each of the key team members, including their current
roles, prior experience, significant accomplishments, and
o
education. If there are any major investors or advisers, you
can name them here. Keep your bio to less than a minute
total when presenting. Your goals are to build rapport, be
y
Leandro Harper known, and build confidence that the team can accomplish
the mission.
McKay Thomas
Father Of Two
Co-founded Baby.com.br
From Ideation To $23MM In VC
o p What should I demonstrate?

• Brevity. Each bio should be only seventy-five words
or less.*
C
Over Product
• Domain expertise. You have the experience and
insight to get the job done.
t
Moms have 1st
Team
•
a problem Opinion
Passion, intensity, and a good team culture. You
First Opinion
o
know the kind of team culture you are creating and
THE TEAM that each person is committed to it.
Kathleen Shea-Porter Justin McLeod

Operations / Brand
Editorial Manager
at LivingSocial
CEO
Game Theory Major
Harvard MBA
N AJ Bonhomme
Lead Engineer
Cyveillance (acqÕ d)
AgentLogic (acqÕ d)
o
+2 engineers, data scientist, growth hacker, community mgr, designer
Shift
*You should also prepare a longer (250–500 word) bio, in case an investor asks
Hinge
for it. The point of the pitch deck bio is to get your audience’s attention, not
tell your life story.

s t
• Why are you the right people for the job?
Po Use of Funds
What do you want and why?
• Is this team sufficient to accomplish the goal?
• Are there others who need to be hired?
or We’re raising a $5M Series A

with three goals
py 1. Ramp up sales: Scale inside sales team and develop
o
outbound sales practice
2. Optimize the platform for scale & ROI:
Improve performance & deliver value, esp for teams
t C 3. Emphasize thought leadership: Drive lead gen

via content marketing and partnerships
Contactually
o
Funding Needs
Seed capital for 12 months of operations + initial inventory
Everything is in place, we just need capital to move forward.

The following provides initial startup capital, 12 months of sales
Raising and operations (full time staff x 4), work space, rapid
N
prototyping, and freelance contractors as needed.
$
1M - $ 1.5M Build Initial Inventory $175,000
25 Exos for demonstration, initial low volume sales, lease based operations
FOR THE FOLLOWING

Staffing & Service Overhead x 12 months $550,000
Full time staff of 4, ample freelance/contractor budgets, legal & accounting services
2 APPS (Moms & Docs) Operating Costs x 12 months $100,000

Office space, prototyping facility, utilities and supplies
McKAY THOMAS
415-726-8494 500,000 active moms Initial Startup Costs
Office equipment, furniture, prototyping equipment and needed software
$125,000
mckayt@gmail.com
Inventory Equipment Costs $50,000
o
Flatbed trailers, forklifts & vehicle purchases for lease based operations
Total Funding Needed $1,000,000
First Opinion Reaction, Inc.

s t
What is it?
A good pitch deck has a clear ask of the investor. This is
Po Extra Slides
r
married with an understanding of what the investor gets in Although the ten building blocks make up the core of most
return and what the money will be used for. Some entrepre- decks, there are an almost infinite number of slides you
o
neurs like to create a slide with every way the company can might add, depending on your venture and the way you
be sold, potential acquisition targets, initial public offerings, tell your story. Here’s a list of forty-one other slides to build
yada yada. Everyone will tell you something different, but into your deck or add to an appendix.
y
we think it’s best to focus on your company. Spell out how
you actually plan to use the money you are asking for. What 1. Frequently asked questions (FAQs). Usually, there
p
will it give you in terms of resources or achieved milestones? are about five to ten questions that almost everyone
asks. Build trust with investors by facing the diffi-
o
What should I demonstrate? cult questions head on. Create a slide and put the
questions and answers next to each other.
• Clarity. You specifically and clearly state what the
2. History. Context can be helpful. A history slide,
C
funds will be used for.
typically laid out as a timeline, gives you the ability
• Milestones. You should show what you expect to to show your company’s key mile markers, for exam-
t
achieve by the time the money is gone. ple, incorporation, team formed, first product sold,
money raised, and record sales month.
N o
• What size and type of investment are you looking for?
• How will you spend it?
• What will you accomplish with it?
3. Products. Simply show your product(s). Make the
product the hero of the slide: large, front and center,
with little or no text around it.
4. Market. The market slide can show anything you

want about the market you operate in. Characteris-
D o 34 |
• Who else is likely to be participating in this invest-
ment round?
CREATE YOUR PITCH

tics like where the market is heading, how large it is,
the changes taking place are important to lay out.

s t
5. Patents. Patents can add value to your company.
If you have them, show them. Patents are a clear
demonstration that you can defend your venture
Po get stuff done. If you haven’t released your prod-

uct yet, milestones are a great way to demonstrate
momentum.
r
from copycats.
11. Branding. Consumer-facing and product-based
6. People you are learning from. Few entrepreneurs startups often live and die by the experience they
include this slide; it’s one of our favorites. List
everyone you are learning from: advisers, friends,
investors, and so on. They can be people you know
personally or whose work you follow and admire.
The list shows you are curious and are sourcing a
y o create for their customer. If the physical experi-

ence of your product matters, this slide gives you a
chance to show that off.
12. Product road map. Investors want to know where
p
you are headed next. What’s most important in the
wide range of feedback from key people.
next three, six, and twelve months? A product road
o
7. Executive summary. This simple overview of the map, usually displayed through a timeline or Gantt
venture and its opportunity usually consists of one chart, gives your audience a full picture of the long-
or two sentences, placed in the middle of the slide. term vision of the product and your priorities.
t C
8. Income statement, balance sheet statement, and cash
flow statement. This trio makes up what people
usually mean when they say “financials.” The later
the stage of the venture, the more important these
13. Mission. A mission statement should be actionable
and personal. It answers the question: Why do we
exist? The mission statement should help your team
make better decisions and gives others insight into
elements become.
o
9. Investment highlights. List well-known and re-
N
spected investors who have already invested in the
business, as well as previous successful funding
rounds.
what’s driving the venture.
14. Vision. Vision statements are aspirational; they de-

scribe the kind of world you are striving to create.
The goal of this slide is to get others to buy into
your vision of the future.
D o 10. Milestones achieved. This timeline of important

achievements shows that your team knows how to
15. Pictures. This really isn’t a slide type, but a story-
telling technique. Using a picture with few or no

s t
words can help immerse your audience into a scene
or experience that you want them to understand.
16. Supply chain. This diagram traces where and how

Po 22. Screenshots. Screenshots of your product are a
simple way to show your audience exactly what you
are doing and lets them experience your product as
r
a customer would.
you source your raw materials and inputs for your
product. A solid and protected supply chain can be 23. Sales funnel. This diagram demonstrates how you
a hedge against competition and an unfair advan-
tage over existing players or new entrants.
17. How it works. Quickly explain to your audience how

your product does what you say it does.
y o are systematically getting customers. A typical

funnel moves through a process of gathering leads,
qualifying those leads, educating potential cus-
tomers and answering objections, closing, and then
following up with after-sales service. Investors like
18. Risks. This slide lists the biggest challenges you
face as a venture. Examples of risks include assump-
tions you’ve made that you have to prove or indus-
try dynamics that make you vulnerable. This slide
o p to know how you are moving people through each
stage in the process and what the conversion rates
are from one stage to the next.
24. Customer acquisition strategy. This slide is a dif-
C
explains that you understand exactly what those ferent way of showing the same thing as the sales
risks are and what you are doing to defend against funnel: how you plan to get customers. Be specific
t
them. on this slide. E-mail marketing campaigns, Google
19. Differentiation. If you are in what others may con- AdWords and Facebook ads, influencer or ambassa-
o
sider to be a crowded market, this slide explains dor programs, referral programs, trade shows, and
what makes you different. cold-pitching are all examples of potential acquisi-
tion strategies. In addition to showing the strategy,
N
20. Locations. Show a current map of where your cus-
tomers are or where your product is available.
give data on the expected costs and conversion
rates of these strategies.
o
21. Geographic growth plans. This future-oriented ver- 25. Customer lifetime value. How much will each cus-
sion of the “locations” slide shows where you plan to tomer be worth over the course of his or her engage-
be over the next several months. ment with your product? Show this number and how
D 36
| CREATE YOUR PITCH
8/23/15 7:06 AM
s t
you arrived at it (how many times do they purchase
over what period of time?).
26. Designs/blueprints. Similar to the “how it works”

Po 32. Customer quotes. Customer quotes give others a
more intimate picture of why people buy your prod-
uct or service.
slide, this gives you a chance to demonstrate the

underlying mechanics of a product.
27. History and background. Tell the backstory of your

team and the venture that led to where you are
or 33. Comparable companies. This slide lists the compa-
nies in your space and key metrics.
34. Go-to-market strategy. Which customers do you

plan to target first and how do you plan to target
y
today. This slide can help you demonstrate exper- them? Include evidence for why this is the right first
tise and previous success in your space. move to make.
28. Unique value proposition. Popularized by tools like

the Business Model Canvas and Lean Canvas, this
slide presents a clear statement of what makes you
different and why customers will buy your product.
o p 35. Case study. Tell a story of a specific customer or
partnership and how your product did amazing
things for them.
C
36. Organization chart. This slide is a diagram of your
29. Competitive or unfair advantage. What difficult-to- current team, their titles, and who reports to whom.
copy advantage do you have over competitors? Show a typical organization chart in a hierarchical
t
30. Pipeline. Depending on the size of each deal, this
o
list of the customers that you are currently negotiat-
ing with shows the names and logos of well-known
customers or calculates the total size of those deals
tree format.
37. Exit strategy. Explain your strategy for whether

you plan to exit the business through acquisition,
IPO, or something else, when you plan to exit. For
N
in dollars to show likely future sales.
31. Strategic partnerships. This slide shows the names

acquisition exit strategy, include a list of potential
acquirers.
o
or logos of strategic partnerships that will help you 38. Exits. List the companies that are similar to yours
get more customers, lower costs, or break into new and have had successful exits. Include their valua-
markets. tions at the time of the exit.

s t
39. Conclusion. This is the “sum it all up” slide—a clear
statement that explains the power of your venture
and the opportunity your audience has to be a
Po Beyond Just Slides:

Story, Design, and
r
part of it.
40. Technology. Describe and visualize the core tech-

Text
nology that powers your product and keeps your
venture from being copied by others.
41. Valuation. List the terms of the deal you are offering:
how much you are raising and the valuation of the
y o In “The Building Blocks of a Pitch Deck,” we gave you a

basic outline. Most entrepreneurs stop there. But over the
next three chapters, we’re going to dig into the key ele-
p
company. If you are structuring your raise with a ments that transform a deck from a lifeless document that
convertible note, include the valuation cap and the fails to inspire into one of your biggest assets: story, de-
o
discount you are offering. sign, and text. For perspective, you might spend 25 per-
cent of your time on the architecture and the remaining
75 percent on these components that really differentiate
C
your deck.
o t
N

s t
3 Po
Story or
py Stories explain, captivate, disturb, and inspire. They can tell us there is something very, very
o
wrong, and they can give us a vision for what we never thought possible. Great stories are
about what’s true inside all of us. That’s what makes them work. Entrepreneurship is about
telling a story that connects the deep needs of a group of people with a repeatable solution.
C
For your deck, stories are the fabric that stitches everything together. You will use stories in
three primary ways:
o t 1. To create a narrative arc that ties your slide deck together.

2. To explain one or more of your slides.
3. To have as a reservoir of things to discuss and ways to respond to questions during a
conversation.
N
Whether you’re presenting in person or sending the deck for someone to read, without the
elements of story, your deck is just a bunch of boring slides.
In this section, we outline four basic story archetypes and use the case study of Scott
o
Harrison, founder and CEO of charity: water, to illustrate their power. In the last decade,
charity: water has revolutionized the nonprofit industry, put a significant dent in the global
water crisis, and set the standard for raising money in the twenty-first century for any venture.
D | 39

s t
Its efforts have funded more than 16,000 water projects
and brought clean water to 5.2 million people in 25 coun-
tries. It has also raised over $185 million from 1 million
Po The Origin Story
r
supporters. After eighteen years in a loving, conservative family,
As a nonprofit, charity: water’s engine works a bit differ- Scott Harrison decided it was time to rebel. Like a kid in
o
ently than a typical startup, but the basic stories it uses to a bad teen movie, he moved to New York, joined a band,
sell others on its vision are universal to any venture. and started drinking. The band broke up immediately, but
he discovered you could make a lot more money book-
Key Elements:
y
ing shows than playing them. If you got good, companies
would pay you to be seen drinking their booze at a party.
• The origin story
p
That began Scott’s life as a nightclub promoter. Every night,
• The customer story he would convince people to buy $20 bottles of champagne
o
for $200. Budweiser paid him $2,000 a month to drink its
• The industry story
beer; Bacardi paid him another $2,000 to drink its rum.
• The venture growth story Ten years later on a New Year’s trip to Uruguay, he
C
realized he was the worst person he knew. Surrounded by
beautiful people and Dom Pérignon magnums, he said to
t
himself, “I’m never going to find what I’m looking for where
I’m looking for it.” Hung over the next day, he started read-
o
ing the Bible. He came across this verse: “True religion is
to look after widows and orphans in their distress and to
keep oneself from being polluted.” Not the most encourag-
N
ing verse for a guy who got people wasted for a living.
He knew he had to do something big. Making a deal
with God, he decided to spend a year serving the poor to
o
make up for the ten he’d wasted. Eventually, an organiza-
tion agreed to take him on as a volunteer photographer if
he paid them $500 a month. “Here’s my credit card,” he

said. “Where are we going?”

s t
Liberia. Doctors from the organization Mercy Ships
traveled from country to country, giving operations to help
people with facial deformities. Overwhelmed by the pov-
Po
r
erty and sickness surrounding him, Scott broke down. He
photographed thousands of people—people with tumors
o
on their lips so large that they were suffocating or whose
communities shunned them and threw rocks at them—all
of which were healed by simple surgeries. The first year
y
went by. Scott signed up for another. In the second year, he
discovered one of the things that made people sick: dirty
p
water. Standing in front of a beautiful still pond on the out-
side of a village, he watched as a young girl dipped her
o
bucket into the green water and pulled it out to drink. “No
wonder there are things growing on people faces; look at
what they’re drinking,” he thought.
C
He moved back to New York City, unable to get that
image of the girl drinking from a swamp out of his mind.
t
Eight hundred million people just like her lacked access to
clean water every day. So, at the age of thirty and $30,000
o
in debt, he moved onto a friend’s couch and started char-
ity: water with the goal of ending the water crisis in his
lifetime.
N
Seven years later, every time Scott speaks about charity:
water, he opens with that story. Images copyright Scott Harrison
D o Story | 41

s t
Your Origin Story
Po If you want to get people fired up about an idea, they
need to know why you are fired up about that idea. Scott
knows that sharing the story of how he started keeps
r
The journey from loving home to the nightclubs of New people from seeing charity: water as just another charity
York to the poorest parts of the world is Scott’s origin and creates a bond between him and his audience. “Many
o
story—his personal “why.” It’s how he came to discover his people want to know what is driving the entrepreneur for-
mission and start pursuing it, and it is at the core of his ward, and learn more about his or her character before
ability to rally people to his cause. they invest,” Scott said. “I think one of the most important
py The Hero’s Journey
12 1
o
Final mastery Limited
Act 3 of the awareness of Act 1
Diagram of 11 problem a problem 2
Joseph Campbell’s
C
Final attempt Increased
at a big awareness
Hero’s Journey change Return
with the
Ordinary
World
Elixir
t
Gray circle = inner journey Call to
Resurrection Adventure
Blue circle = outer journey (character transformation) 10 Rededication Reluctance
3
to change to change
Ordinary Refusal
o
Road Block of the Call
World
Conse- Reward Meeting with

quences of (seizing the Special the Mentor
the attempt sword) World Overcoming
reluctance
N
(improve-
9 ments and Crossing 4
Ordeal the
setbacks)
Approach Tests, Threshold
the Allies,
Attempting a Inmost and Committing to
big change Cave Enemies change

Act 2B
8 Preparing
for a big
change
7
Experimenting
with first
change
6
5
Act 2A

s t
things is being able to tell your personal story in a way that
engages people.”
What has brought you to this moment? Why were you
Po 2. Suddenly, you have an epiphany and feel a call to

adventure.
3. You accept the challenge and take bold action.
r
“made for a time such as this”? What has prepared you to
take on this challenge? Why is it so important to you per- 4. That action gives you a new sense of purpose
o
sonally? Why would you do what you’re doing for free? and understanding that continues to motivate
Like Scott, many of the best and most successful entre- you today.
preneurs have found a beautiful match between their per-
y
sonal passions and the companies they launch. They talk
about their journey in a way that feels as if their ventures
The Customer Story
p
are the fulfillment of their life stories. The beautiful part
is that it is true.
o
A founder’s origin story follows the classic pattern Scott also tells another type of story whenever he speaks:
known as the hero’s journey, originally described by the story about the people charity: water helps. He talks
Joseph Campbell in The Hero with a Thousand Faces. It about a woman who walks eight hours a day for water, carry-
C
starts with the hero living life as usual, unaware of any ing a clay pot that weighs ten or fifteen pounds empty, and
great need or problem. Then, one day, he’s faced with a another thirty pounds when it is full. One day, she comes
t
deep and troubling experience that keeps him from ever back into the village with her clay pot filled with water, and
living “life as usual” again. That experience leads to a new she slips and falls. The clay pot breaks. She takes the rope
o
sense of purpose, causes him to take great and sometimes she used to wrap the pot around her back and uses it to
risky action, and ultimately changes the way he sees the hang herself on a tree in the middle of the village.
world. All great hero stories follow this storyline—includ- Or, he tells the story of a woman named Helen Appio.
N
ing those about entrepreneurs. Helen grew up in a village in northern Uganda. Before her
village had clean water, Helen woke up before dawn to walk
nearly a mile and a half to the closest water point. There,
o
she would wait for hours with hundreds of other women to
The Elements of an Origin Story fill her two five-gallon jerry cans. When she walked back
1. You’re living life as normal, unaware of anything to the village, she was forced to make a decision: How do I
D
wrong with the world. use these ten gallons of water today? Cook a meal with it?
Story | 43
8/23/15 7:06 AM
s t
Po Drink it? Clean the children’s clothes? Then, charity: water
built a well in her village. Now that she has water, every-
thing is different. “I’m happy now,” she says. “I have time
r
to eat, my children can go to school, and I can even work in
my garden, take a shower, and come back for more water if
o
I want. I’m bathing so well.”
Seeing her bright face and beautiful green dress, a
woman from charity: water told her, “Well, you look great.”
y
Helen put her hands on the woman’s shoulders. “Yes,” she
said. “Now, I am beautiful.” Recounting that story, Scott
p
marvels, “What an amazing thing. What a crazy thing! To
be able to restore someone’s dignity and make them feel
o
beautiful, just by tripling the quantity of water.”
A venture’s success rests on its ability to make the lives
of the people it serves better. By telling the story of a per-
C
son your venture serves, you demonstrate how it solves a
deep need in the world. By articulating your value propo-
t
sition as it relates to a single, real-life person, founders can
help the people they are trying to persuade understand the
o
true potential of what they are working on.
These stories follow a very predictable pattern, as well.
First, they introduce someone with a big and frustrating
N
problem. They describe what life looks like for that person,
Images copyright Esther Havens
how she tries to overcome or solve her problem now, and
how nothing she tries works. Then they describe how, one
o
day, that person came in contact with your product, which,
almost miraculously, solved the problem she has been
struggling with for so long. The stories end by describing

s t
what life is like for that person now that she has your prod-
uct. She is happy. She can’t help but tell others about it.
She is free to do so many other things that before she only
Po The Industry Story
r
dreamed of. Scott tells another story about the charitable industry it-
These stories communicate the value of a venture self. He talks about how, after coming back from Africa,
o
in microcosm and give others an anchor to focus their he discovered his friends were disillusioned and suspi-
attention. cious of charities. With the image of charity directors buy-
ing BMWs and multimillion-dollar mansions with other
y
people’s donations stuck in their heads, no one was inter-
The Elements of a Customer Story* ested in giving. “How much money would actually reach
p
1. Meet Joe. Joe has a problem. This problem really the people? How will I know where my money is going?”
bothers Joe. they asked.
o
Scott realized that the charity industry was ripe for
2. Joe tried this and this, but no matter what he does
innovation. People didn’t give because they thought too
he can’t solve his problem.
much money went to the operations of the charity itself. So,
C
3. Until, one day, Joe finds [your amazing product]. Scott opened two bank accounts when he launched char-
ity: water: one for all the overhead of the business, which he
4. Now Joe is so happy, he tells all his friends. Don’t
t
would fund with money from private donors, and another
you want to be like Joe?
for the work of the charity. This way, 100 percent of the
o
funds he raised publicly would go directly to the people
he served.
Another reason people didn’t give was because they
N
didn’t feel connected to the impact their money was hav-
ing. With most organizations, it felt like any money you
gave went into a black hole. You never knew where it went
o
or what kind of effect it had. Scott decided charity: water
*Adapted from Lee LeFever, The Art of Explanation (Hoboken, NJ: Wiley, would make a commitment to never fund a project unless it
2013). could know it exists through photos and GPS coordinates.
D Story | 45

s t
Po Whenever someone gave to charity: water, he or she would
be able to go to a Google map and literally see the well that
was built with his or her money.
r
Finally, he realized that charities were often phe-
nomenal at the service they gave but horrible at rais-
o
ing money. The damning words of New York Times
columnist Nicholas Kristof motivated him: “Toothpaste
is peddled with far more sophistication than all of the
y
world’s life-saving causes.” There were no effective char-
ity brands. They had horrible websites, hosted speaking
p
events that nobody came to, and were constantly limited
by a lack of funds. To be successful, Scott decided, char-
o
ity: water would create an amazing brand that people
wanted to identify themselves with.
This is Scott’s industry story: how, at a macrolevel, the
C
trends and environment of the charitable industry created
100% PROOF a unique opportunity for charity: water to do something
t
amazing. In the pursuit of ending the water crisis, it would
also reinvent charity.
o
Telling the industry story gives your audience the confi-
BRAND dence that the larger forces at play around you are moving
in your favor. The story also shows that you have a deep
N
understanding of how your venture fits into the larger so-
Images copyright Scott Harrison
cial, political, and economic picture. Can you identify the
trends and signs of the space you are in? Who does well in
o
good times? Who does well in bad times? What are the bar-
riers to entry in your industry? What effects do customers,
suppliers, substitute solutions, rivals, and the threat of new

entrants have on you and other companies in the space?

s t
Industry stories usually follow this kind of pattern: They
start by describing where the industry is now and how it
got there. They identify the key players in that industry,
Po The Venture
Growth Story
r
and the assumptions they make and problems they are fac-
ing. Then, they introduce a few key cultural, technological,
o
or economic trends that present an opportunity for some- The fourth story Scott tells is charity: water’s growth story.
one to do something different. These stories are proof that This story illustrates how the other stories—his personal
the wind is at your back and not in your face. discovery of his mission, the transformation of the people
y
he serves, and the emergence of an opportunity caused
by broader societal forces—have come together to enable
The Elements of an Industry Story
p
charity: water’s amazing growth and impact.
1. For a long time, the industry has operated according Scott launched charity: water by doing the only thing
o
to a set of assumptions based on the environment it he knew how to do: throw a party. Luring them with free
grew up within. booze, he convinced seven hundred people to pay $20 a
ticket for his thirty-first birthday party as a fundraiser
2. As a result of specific social, technological, or eco-
C
for the charity. Then, he took the $15,000 they made and
nomic factors, those assumptions are no longer
brought it immediately to a refugee camp in northern
holding true, creating problems for the big players
t
Uganda. They fixed three wells and sent the photos and
in the industry.
the GPS coordinates back to the people who had given.
o
3. This change creates a unique opportunity for some- The donors couldn’t believe it; they had never heard of a
one to step in and take advantage of these new charity following up on such a small donation. Some had
circumstances. forgotten they had even given.
N
The next year, he told people to stay home for his birth-
day and donate $32 instead. That year, he raised $59,000.
Soon, others followed suit. A seven-year-old in Austin,
o
Texas, raised $22,000. Justin Bieber raised $47,000. Twit-
ter cofounder Jack Dorsey raised $174,000. Charity: water
experimented—using any medium it could to get people
D
to care and take action. With each experiment, it took
Story | 47
8/23/15 7:06 AM
s t
Po what worked and found a way to expand it. By 2013, char-
ity: water had brought clean water to 3.3 million people in
twenty different countries. Yet, as impressive as that prog-
r
ress is, the need is still far greater. Scott has set a goal that
by 2020, charity: water will have given 100 million people
o
access to clean water. To get there, it is going to need help.
Charity: water’s growth story contains four basic ele-
ments. Scott starts by describing the actions and experi-
y
ments charity: water took to achieve its mission. Then, he
tells how it followed up with those experiments by closing
p
the loop with donors and taking what it learned and ap-
plying it to more experiments. Then, he shows how that
o
learning has resulted in astounding results and progress.
Finally, Scott shows how despite all that progress, charity:
water still has a long way to go, and he invites people into
C
the adventure to help achieve the vision.
IN SEVEN YEARS... Once you discovered your idea, what did you do about
$100+ MILLION RAISED
t
it? What happened after that? What needs to happen in the
future? For founders, the venture story is the hub around
500,000+ DONATIONS
o
which every other story turns. If the team members cannot
translate their passion, understanding, and potential into
a venture that produces measurable results, they are wast-
N
ing their time.
Images copyright Scott Harrison
The Elements of a Venture Growth Story

1. We took action.
2. We got results. We learned from those results and

took more action.

s t
3. This resulted in unbelievable progress.
4. For as much progress that’s already been made, the

vision for what we can do is bigger.
Po through our five senses—a storyteller can literally create

the event he or she describes inside the mind of the lis-
tener. When we describe the sweat dripping from an ath-
r
lete’s brow as he jogs beneath an August sun, parts of our
brains light up as if we were actually out on the pavement
o
with him.
As you incorporate stories into your pitch, you can in-
crease their impact by paying attention to these character-
How to Tell a
y
istics of great stories.
Great Story
A story has been the preferred medium of world changers
since the beginning of history. Plato told stories. Jesus
told stories. Abraham Lincoln told stories. Steve Jobs told
o p What Makes a Great Story?
Things happen. For a story to be a story, things have to

happen. Usually, one big thing happens and everything
C
stories. The difference between a great idea you’ve never else in the story is in response to or a result of that one
heard of and one that’s changed the world is its origina- big thing. For the story of your pitch to be engaging, you’ll
t
tor’s ability to tell a damn good story. And, yet, stories are have to choose the biggest and important events in your
extremely simple. venture and describe those in a way in which each event
o
This thing happened. Then, this other thing happened, builds on the other.
which caused this other thing to happen, until finally
something else happened as a result of all those things Your five senses give you access to vivid details. If you want
N
that had already happened. The end. So what makes sto- to tell a story, you have to start where human knowledge
ries so effective? begins: with the senses. As highly educated adults, we like
Stories aren’t powerful because they are fancy; they are to speak in abstractions, focusing on the ideas, concepts,
o
powerful because they are like life. They can’t be boiled and complex emotions that are the result of thousands of
down to bullet points; they must be lived in and through years of philosophy. We forget that no one has ever seen the
time. With tools like MRI scans, we know now that by fo- wind blow. We see leaves turn, or feel a cool, intermittent
D cusing on the details in a story—the world as we know it
pressure against our skin, or hear whistling all around us.
Story | 49
8/23/15 7:06 AM
s t
It’s those sensory details that lead us to conclude that the
wind is blowing.
To get your audience’s attention, you must literally put
Po Too often, people passionate about ideas have ar-

ticulated them across scraps of paper, e-mails, and
thoughts in their head. [what is] This constellation of
r
them into the scene, letting them see what you see, feel notes looks a lot like the way the idea looks in your
what you feel, and hear what you hear. The more vivid the brain: thousands of neurons firing thoughts, making
o
details in your story, the more likely they will stick in the connections through synapses in a web of what were
mind of your audience. once disconnected memories and inputs. But if you
want someone else to understand that mess of a web,
y
Conflict. Life is about struggle, and stories should be, too. you’ve got to find a way to get it into something more
If there is no conflict in your story, the audience won’t have accessible. [what could be]
p
anyone to root for. The point of a story is to get people to
care. Nothing gets people to care like seeing someone they The sparkline happens at a more metalevel, too. The
o
like face hardship. first half of the introduction was all about “what is” (fund-
raising is hard, experts give bad advice), but then the very
first thing we do in chapter 1 is hit you with one big “what
C
could be” (sharing everything that is world changing about
Nancy Duarte’s your venture with others through a pitch deck). Great sto-
t
ries have a unique rhythm that carries the listener from
Sparkline the beginning and middle to the end, through a constant
o
tension between what is and what could be.
In her book Resonate, Nancy Duarte highlights another
key characteristic about stories that is especially relevant
N
for presentations: they contrast what is with what could be.
The contour of a presentation as the speaker moves back
and forth between what is and what could be is called a
o
“sparkline,” kind of like the heartbeat of the presentation.
We use this technique throughout this book. Take the sec-
tion on “Getting Clarity on Your Idea” in chapter 1:

s t
BEGINNING
Paint a picture
MIDDLE
Present contrasting content,
Po END
End the
CROSS THE
THRESHOLD
The audience
r
of the realities of alternating between what is and what could be. presentation on leaves the
the audience’s a higher plane presentation
current world. than it began, committed to
o
with everyone taking action,
understanding knowing it won’t
the reward in be easy but will
the future. be worth the
y
reward.
p
What What What Reward:
could be could be could be new bliss
The gap
What is
C
What is
o
What is What is
o t
N
Turning Point 1 Turning Point 2
CALL TO ADVENTURE CALL TO ACTION
o
Create an imbalance by Articulate the finish line the
stating what could be audience is to cross.
juxtaposed to what is.
D Story | 51

s t
Using Story to Craft
the Arc of Your Pitch
Po Origin Story 1. The Cover
2. The Team
r
Industry Story 3. The Opportunity
Customer Story 4. The Problem
o
You’ll need to choose how to arrange the stories and the 5. The Solution
slides in your pitch. By leading with the stories and aspects
Venture Story 6. The Competition
of your venture that are the strongest, you can align your
7. Your Advantage
y
stories in a way that creates an interesting arc and captures
8. The Business Model
the audience’s attention.
9. The Financials
p
Here are a few examples of how stories might fit into
10. The Ask
your pitch.
Origin story for:
C
Customer story for:
o Industry story for: Venture story for:
t
• Products or services with • Complex products or • Disruptive products or • Ventures with immediate
high social benefit services services traction
N o
• Effect: Taps into the audi-
ence’s desire for meaning.
• Customers with dramatic
transformation stories
• Effect: Explains your ven-

ture and its value.
• Effect: Shows you know
what you’re talking about
and that the idea could be
huge.
• Effect: Feels like you’re
on a train that’s headed
somewhere big.

s t
4 Po
Design or
py The chapter on story was about the content of your pitch. Design is the tool you will use to
o
help you tell that story.
The effectiveness of your pitch deck rests on its ability to communicate the brilliance of
your venture clearly, compellingly, and immediately. Pitch decks are a visual medium; they use
C
the power of visual thinking—a process of organizing, interpreting, and showing information
spatially—to make an immense amount of information accessible and meaningful to an audi-
t
ence. Visual thinking engages the creative parts of our brain and allows us to see an idea or
concept—even a very complex one—intuitively and simultaneously.
o
In this chapter, we will apply the best practices of visual thinking and design masters like
Nancy Duarte, Dan Roam, and Scott McCloud to assemble a toolbox of design techniques
and frameworks that help you bring your pitch deck to life.
N Does This Stuff Really Matter?

A lot of entrepreneurs have asked us, “Do investors really care about what kind of fonts I use
o
and the color of my slides?”
The short answer: Absolutely. Here’s why.
D | 53

s t
1. Investors are extremely busy. They see hundreds, if
not thousands, of pitches a year.
2. The eye is faster than the mind. Sight is our fastest
Po Don’t Do This
r
sense, and subtle changes in color, shape, and
style can dramatically affect our understanding of The state of enterprise mobile
o
a subject and our opinion about it.
3. Good design improves clarity. People learn better ¨  Mobile technology landscape is confusing and constantly changing
when information is presented with great illustra- ¨  Lines of business hiring mobile development shops to build apps
y
outside of the IT department
tions. Good design lets you communicate your
¨  Enterprise IT not in control of the mobile architectural decisions
story more easily and effectively.
p
¨  Data and app security issues complicate the development of
4. People are insulted when you give them trash. Let mobile apps
them know you care enough to put time into what ¨  Large enterprise systems having to spend years developing an API
o
layer to fuel mobile initiatives
you ask them to read. ¨  More complex mobile apps must communicate with the enterprise
system of record
Key Elements:
C
¨  Customers, employees, and business are demanding more mobile
• Layout apps
Building mobile enterprise apps is too expensive and lengthy
t
¨ 
• Typography
• Color
o
• No relationship between bullet points
• Images and photography • Inconsistent margins
N
• Visualized data

s t
Do This
Po
There’s something almost quite
magical about visual information.
r
It’s effortless; it literally pours in.
And if you’re navigating a dense
Fixing the world’s broadband problem.
A network of networks. Our software bridges existing infrastructure to provide
frictionless access to the Internet. We're moving your data from provider A to
provider B. Our customers always interact with Karma.
o
information jungle, coming across
a beautiful graphic or a lovely
y
data visualization, it’s a relief, it’s
Buy
10GB
Use
-2GB
Use
-2GB
Use
-1GB
o p
like coming across a clearing in
the jungle.
—David McCandless, data journalist
C
Own
5GB
and information designer
•
•
No bullet points
Visualized data
o t
N
• Consistent color scheme
D o Design | 55

s t
Layout
Po
r
How items are spaced in relation to each other and their
background is one of the most important elements of good
o
design. A grid allows you to arrange elements on your slide
so that they look consistent and unified.
In her book slide:ology, Nancy Duarte discusses the
y
idea of gridlines—crossing lines and rectangular boxes to
give your slides a consistent structure. They work as an
p
organizing principle to hang all of your content on. Here
are some examples of different grid patterns used in decks
o
throughout this book.
Place and lock the grid over each slide while you’re ar-
ranging the elements in your pitch deck. When you finish,
C
delete the grid from all but one extra slide at the back or
front of your deck. You don’t need to keep the same grid
t
pattern every time, but you should know when you are
breaking the pattern so that you can do it intentionally.
N o

s t
Typography
Po
r
There’s one thing you need to know about fonts: serifs.
Serifs are those little feet that extend out of the edges of
o
certain typefaces. In the words of one designer we spoke
to, serifs are the “crown molding” of typeface. In the very
old days when letters were chiseled into stone, the writers
y
would use serifs to neaten and sharpen the ends of the
lines they were creating, just as an architect would use
p
molding to create a sharper edge in a room. In typefaces,
when that little bit of crown molding is present, we call it a
o
“serif” font. When it’s absent, we call the font “sans serif”
(that is, without serif).
Most designers will use two fonts for a project, one for
C
titles and headings, and the other for body copy. Choos-
ing one serif and one sans serif for those two fonts can
t
create a nice sense of contrast. Our advice is to pick two Serif Sans Serif
to three favorites of each category and use those as your
o
go-to fonts. Use one font for headlines and subheadings
and another for blocks of text. There are few reasons to
use any more than that. Fonts, like all good design, should
N
be felt and not seen. Your fonts should reflect the person-
ality you want to project. To make sure your font size is
large enough, Duarte recommends that you measure the
o
diagonal length of your screen, then stand back many
feet and see if you can still read it. If you can, you’ve got
the right font size.
D
Design | 57
8/23/15 7:06 AM
s t
Color
Po
r
The most basic building block of color is called hue. When
we say that these colors are all “red” and these are all
o
“blue,” we are referring to the color’s hue.
As you may remember from elementary school, there
are six hues: red, orange, yellow, green, blue, violet.
y
But if there are only six, what makes for all the variety in
color? Adding white (tint) or black (shade). We get all that
p
wonderful and problematic variation in color from these
two simple tools.
o
When it comes to your color palette, your focus should
be on consistency or contrast. Colors that are too similar
will make your design feel disorienting. And don’t trust
C
your eyes; get the RGB numbers. Create a slide at the be-
ginning of your presentation that contains your color pal-
t
ette and stick with it.
The color palette for your deck should contain three
o
core colors, a neutral color, and a highlight color. As you
assemble your color palette, ask yourself: In the mind
of my audience, which colors are associated with the
N
thoughts, feelings, and ideas I want the audience to have?
Of these colors, which relate well with my logo and with
each other?

s t
How to Hack Your Color Palette
Go to color.adobe.com, register on the site, click the cam-
Po Images and
Photography
r
era icon, and upload an image of your current56 logo. If FOR
THE CASE youPITCHBOOKS
don’t have a logo yet, create a collage of a handful of pho-
o
tos that are representative of your industry and upload it Clear, defining images are one of the best ways to improve
as one image. The site will analyze your picture and create the design of your pitch deck. You can choose to use pho-
a color palette for you based on that image. Copy the RGB Image & Photography
tos as a section of the slide or as the background, or simply
y
numbers of each color in the color palette and save them Clear, showdefining
56 THE CASE FOR PITCHBOOKS
a photoimages
on a slide with
are one nobest
of the words
waysattoall. Herethe
improve aredesign
someof
on a backup slide in your pitch deck. Presto! You have your keys to making the images in your deck sing.
your pitchbook. You may choose to use a single photo on a slide with no
p
words at all.
color palette.
Rule of ThirdsRule of Thirds
o
Image & Photography
The rule
Clear, defining images of of
thirds
aregraphic
one the bestis ways
the tomagic trick design
improve of every
The rule of thirds is the magic trick of every good photogra-
pher, designer, and artist. For some the of
reason, our minds
your pitchbook. good photographer,
Youperceive
may choose use a graphic
greatertoenergy single
and designer,
photo
tension on athe
when slideand
with
object ofart-
no
a
C
words at all. photograph is focused around for key “crash points.” You can
ist. visualize
For some reason, our minds perceive greater
these crash points by dividing your photo into two
energy and tensionsets ofwhen
Rule of the object
thirds, horizontally
Thirds
andof a photograph
vertically. is fo-
The points those hori-
t
zontal and vertical lines intersect at the crash points.
cused around four key “crash points.” You can visualize
The rule of thirds is the magic trick of every good photogra-
these crash points by dividing your photo into two sets of
pher, graphic designer, and artist. For some reason, our minds
Type of Shots
o
perceive and
greatervertically. Thewhen
energy and tension points at ofwhich
the object a
photograph is focused around for key “crash points.” You can
those horizontal and these
visualize vertical
ESTABLISHING linesbyintersect
crashSHOTS
points dividing your are
photothe
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This document is we are in. for educator review use only by LEONARDO RIVERA, UNITEC Business School until May 2023. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
authorized

s t
• Cheap. Stocksy and Creative Market sell quality
stock photographs for as little as $10.
Po Highlight What Matters

Emphasize the specific data and the conclusions you want
r
someone to make from it. Change the color, zoom in, or use
Resolution arrows.
o
Just like bad stock photography, photos with poor resolu-
tion hurt more than they help. For a full spread, look for
images with a resolution of 1024 x 768.
Give Context
y
Look for ways to show how your numbers fit into a larger
context. What percentage of the whole is that? How do your
p
Using Photos as Backgrounds numbers compare to something the viewer is familiar with?
Increase the transparency on bold photos to help them fade

into the background. You can also shade the area around
the text to bring attention to your copy.
C o Stay Simple
Your data needs to be seen and understood in three sec-
onds or less. If you think you might be trying to show too
much at once, break it into more than one slide. Don’t be
t
afraid of simplicity and white space.
Visualized Data
N o
Data visualization is a kind of visual storytelling; it takes
viewers on a journey to show them why what they are
seeing matters. In her book slide:ology, Duarte outlines a
few keys to great data visualization. We’ve adapted them
to create our top three.
Data slides are not really
about the data. They are about
the meaning of the data.
o
—Nancy Duarte, author, slide:ology
D
Design | 61
8/23/15 7:06 AM
s t
Dan Roam’s Five Ways of Showing
Po
r
In his books The Back of the Napkin and Blah Blah Blah, Dan Roam divides every visual display of information into five
basic types. Like the parts of a sentence, each of these visuals plays a different role in telling a story. Say goodbye to the
o
bullet point. Here are your new ways of showing information. We use slides from Reaction, Inc.’s pitch deck to illustrate
each way of showing.
1. Portraits
Visual representations of a person,
place, or thing.
2. Maps
Show where things are.
py
The prepositions and conjunctions
3. Charts
Show how many things there are.
o
The adjectives of visual thinking
The nouns of visual thinking of visual thinking
Use to show: market size, sales, and
Use to show: customer, solution Use to show: competition marketing
CO
t C
NF
IDE
NT
IAL A Global Marketplace
We are launching in North America, then we will smartly grow to worldwide operations.
Revenue Projections
5 Year Forecast
o
We are launching in U.S. to get our manufacturing and supply chains
established first. Then we will strategically scale to meet global demand. $ 750 M
$ 500 M
N
$ 250 M
$ 100 M
$0
o
2013 2014 2015 2016 2017
Gross Revenue ( Note: Forecasts only account for Exo sales in revenue. )
reaction systems inc. Total Expenses
NoD5m_101813v112e
D 62
| CREATE YOUR PITCH
8/23/15 7:06 AM
s t
Po
or
4. Timelines
Show when things happen.
The tense of visual thinking

5. Flowcharts
Show how things happen. Combine
a map and a timeline.
py
Use to show: milestones
C
The complex verbs of visual
thinking
Use to show: solution o

The Housing Gap
o
There is a housing gap today Ð a 45 to 90 day long window where there
are simply no mass housing systems currently available that can be
deployed in a cost effective manner. Reaction housing units fill that gap. t The Exo Shelter Unit
A modular hardware foundation for the system.
The Exos were designed to  

be extremely flexible. Quickly
changing interior fittings  
means an Exo can serve  
many purposes. Changing
floor plates means a unit can
N
become a bathroom or kitchen
while connecting units together
creates larger spaces. It’s a
complete ecosystem.
Disaster Event Opportunity Temporary Housing Arrives Recovery Complete
+ 90
\
+0 + 18 1 One shell, many applications 2 Interconnected Exos = space 3 Variety of deployment configs
o
days days months
( Shelter ) ( Office ) ( Storage ) ( Bathroom )
D
Design | 63
8/23/15 7:06 AM
s t
Po
or
py
C o
o t
N
D o

s t
5 Po
Text or
py
This chapter is all about the words in your deck—what they should be, where they should be,
o
and how they should change depending on your audience and environment. By paying atten-
tion to things like the voice and writing style of your text, you’ll build a pitch deck that creates
an experience that reflects your brand. The text in your deck must also do one more thing:
C
communicate the data and evidence that will overcome doubt and push someone to action.
t
Key Elements:
• Writing style
N o • Voice and tone

• Format
• When words are not enough
D o | 65

s t
Writing Style
Po want to put forth, back that point up with evidence, and
then move on. Watch out for sentences that sound impres-
sive but mean nothing. “We plan to pursue an effective
r
Every communication medium carries a certain style with marketing strategy” is a waste of time to read. If you create
it. You write a love letter differently than you would write a slide for your marketing strategy, put the words “Market-
o
web copy or a legal contract. Pitch decks carry their own ing Strategy” in the corner and then write out your strat-
unique style, too, and that style has a lot to do with your egy in a sentence of fifteen words or less. If your strategy
audience, and where, when, and how they will see your has multiple phases, create headings that describe each
y
deck. phase and then add short, straightforward explanations
after those headings. Reading decks should also be “scan-
p
ning” decks. If I only have fifteen seconds to look through
Writing Style for Presentation Decks the whole thing, I should still be able to get a pretty good
o
idea of what it is about.
A deck used as a visual aid during a presentation should
have very few words—no more than one sentence per slide.
Presentation decks also don’t need to have complete sen-
t C
tences. Often, one word or a short phrase is enough to in-
troduce the idea that you will carry forward. If you have
already completed your reading deck, try deleting every
word in it except for the headers and see if the words give
N o
enough context to still understand what the slide is about.
Writing Style for Reading Decks

With decks you plan to send to others to read, the slides
o
have to do a lot of work to communicate everything you
would have said in person. Your words have to catch their
attention quickly, clearly communicate the basic point you

s t
George Orwell’s
Rules for Writing
Po Voice and Tone
r
Voice and tone show the personality of your deck. If
Amazon wanted to publish your pitch deck as an audio
o
George Orwell, the famous author of Animal Farm and book, who would it get to read it? James Earl Jones? Tina
1984, wrote a list of rules for writing in his 1946 essay, “Pol- Fey? Justin Timberlake? How do you want people to feel
itics and the English Language.” Treat these six rules as when they are reading your deck? Should they be smiling?
y
your bible; they will make you a significantly better writer Should their brows be furrowed with passion or intense
overnight. concentration? You have the power to decide what expe-
p
rience your audience has with the kind of voice and tone
1. Never use a metaphor, simile, or other figure of you use.
o
speech which you are used to seeing in print.
2. Never use a long word where a short one will do.

Word Choice
C
3. If it is possible to cut a word out, always cut it out.
To establish your voice and tone, start with the words you
4. Never use the passive [“was saved”] where you can choose. Are they formal or informal? Do you use a lot of
use the active [“saved”].
o t
5. Never use a foreign phrase, a scientific word, or a
jargon word if you can think of an everyday English
equivalent.
words that end with the “shun” sound (execution, comple-
tion, formation)? Do you want to use slang?
N
Sentence Structure
6. Break any of these rules sooner than say anything
Take a look at the punctuation we use in this book. We
outright barbarous.
have a lot of shorter, simple sentences that only communi-
o
cate one idea at a time. Sometimes, we add in asides using
em dashes—like we’re doing now—or commas that make
the sentence sound more conversational.
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s t
Metaphors and Imagery
What do people see in their heads when they read your
Po Common Formatting for Reading Decks

• Capture the audience’s attention in the top third
r
words? Should you use military metaphors (like “capture of the slide. Use titles or short phrases to give just
the first beachhead”) or organic metaphors (like “plant and enough information for someone to understand what
o
grow new markets”)? the slide is about in less than three seconds.
• Reading decks often contain three content elements:

a title, a short phrase or sentence laying out the core
Format
py argument of the slide, and a larger 1–3 sentence para-
graph with further explanation or evidence.
• Word economy still matters. Use as few words as
o
When you first saw the previous page, one of the things possible.
you likely noticed right way was “Voice and Tone” in big
• Think graphic novel.
letters. You knew that this section was going to have
C
something to do with voice and tone because the way the
copy was arranged told you that. You also knew that a Common Formatting for Presentation Decks
t
concept like word choice was related to voice and tone,
• The fewer the words, the better. Limit each slide to
probably as one aspect of voice and tone. You knew that
ten words max. Who says you need any text at all?
o
because the phrase “Word Choice” was placed in bold, on
its own line, in a font size that is bigger than the rest of • If you are not sure about whether to include some-
the text but smaller than the heading “Voice and Tone.” thing, imagine you are a grandparent and are trying
N
You can make all of these conclusions because of the for- to read the slides from the very back of the room.
matting of the text on the page.
• If you already created your reading deck, start your
Formatting is the appearance of the design or layout of
presentation deck by deleting every word except the
o
the actual words on the page and within a paragraph or
title.
sentence. Your formatting will change slightly for your pre-
sentation deck and your reading deck. • Think Steve Jobs.

s t
When Words Are
Not Enough
Po ing had happened, the tiger walked around the table, sniff-
ing the bewildered executives.
End of discussion.
r
Your evidence will not speak for itself. You must find
ways to make that evidence compelling and real to your
o
One of Walt Disney’s dreams was to have rides where live audience.
animals interacted in close proximity with the guests. For example, Freight Farms, an agricultural startup that
Imagine the experience of a real safari—elephants and turns used shipping containers into automated hydroponic
y
giraffes so close to you that you could see the individual farms, would always bring investors into a freight farm be-
strands of their fur. But there were too many technical and fore it asked them to invest. Paradigm, a social business
p
safety obstacles, so he had to settle for those goofy anima- that sells highly efficient stoves to women in the develop-
tronic animals. Fast forward a half-century. Michael Eisner, ing world, would tie a huge bundle of sticks together—the
o
now CEO of Disney, was participating in the last round of same size that a women in a developing country would
discussions for a soon-to-be-built new theme park: Magic carry for miles to use for fuel—and would challenge inves-
Kingdom. Finally, Walt’s dream might be realized. But Eis- tors to try to carry it on their backs. Many couldn’t.
C
ner couldn’t see what the big deal was. What’s so special What will create a visceral experience in the minds of
about a live animal? your audience? What will make them feel the power of
t
Joe Rhode, the lead Imagineer on the project, gave the what you are doing and motivate them to do something
final pitch to the Disney executives. “We know that there about it? Turn the page, and imagine, as an investor, see-
o
are concerns about whether animals are, in and of them- ing that walk into the room.
selves, dramatic,” he began.
“The heart of the Animal Kingdom park is animals, and
N
our guests’ encounters with them. We have gone to great
lengths to make sure that the animals will be displayed in
a way that will bring them and people together as never
o
before . . . ,” he continued.
Then a door opened and in walked a 400-pound Bengal
tiger. While Rhode continued his presentation as if noth-
D
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s t
Po
or
py
C o
t
Joel Sartore/National Geographic/Getty Images

N o
Enough said.

s t
How to Start
Your Deck
Po
1. Draw ten rectangles and put the
name of each slide at the top.
or
y
Divide a whiteboard or a piece of paper into ten rectangles
and treat each rectangle as a slide. Put the titles of each
p
slide at the top. Then, sketch out the storyline of your pitch
in words and pictures. The image to the right is a photo of
o
one of our original outlines of the pitch deck for this book.
2. Tweet the big ideas
t C
Turn the ten building blocks into a Twitter-size phrase that
describes that aspect of your venture. You can also use vi-
suals to describe each aspect.
o
3. Ask yourself: If I were to insert my
N
most compelling story about my venture,
what story would I tell?
Use that story to craft the arc of your deck and the order
o
of your slides. You can open with that story to hook your
audience, or you can build toward it as the climax.
D
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8/23/15 7:06 AM
s t
How to Send
Your Deck
Po Tips for a Digital Deck
PDF, not Keynote. Always convert your deck into PDF for-
r
mat rather than a Word, Keynote, or PowerPoint document.
Editable documents are messy, don’t always open, and are
o
The type of file you send as an attachment or the kind of much too large.
paper you print your deck on may seem like a minor detail.
It’s not. The way you send your deck dictates what kind of Controlled access. There’s little you can do to prevent
y
first impression your deck will make on others. You have people from sharing your deck if they really want to.
invested a lot of work to get your deck ready to send to Password-protecting the PDF can keep your deck from
p
others; you don’t want all of that work wasted because they ending up in the wrong hands. You can also use docsend.
can’t open the file or are distracted by the terrible stapling. com (Google Analytics for documents), which will tell you
o
who read your deck and how long it took them.
Tips for a Printed Deck Updates and versions. Instead of attaching your deck to
C
Proper binding. Steel binding is the best and most expen- an e-mail, consider hosting it on Dropbox and sending
sive, but it can be hard to find a print shop with the machine only the link in your e-mails. This way you can keep your
t
to do it. If that is unavailable, then we recommend spiral deck updated and the investor will always see the latest
binding. Comb binding is okay, but has a tendency to fall version. When you save a new version, keep an archive of
o
apart. If this sounds confusing, your local print shop will the old one in a separate folder so you can keep track of the
be able to set you in the right direction. Never use a staple! changes you’ve made.
N
Good paper. Use twenty-eight- or thirty-two-pound paper.
The twenty-two- and twenty-four-pound paper feels cheap
and gives you hellish paper cuts.
D o A full deck and a one-pager. The one-pager should con-

tain each element of your deck but on one page for easy
viewing.

s t
6 Po
o r
Actual Pitch Decks
p y You’re about to see what only venture capitalists and investors typically get to see: excerpts
o
from the actual pitch decks and fundraising strategies of fifteen successfully funded startups.
For this chapter, we profile ventures from across multiple sectors, stages, and cities. Com-
bined, these ventures have raised well over $100 million.
C
We debated whether to include this chapter at all; people find it nerve-racking to show
their investor decks. But in the spirit of giving back, the founders featured here have chosen
t
to offer you something that they normally never show anyone. We are deeply grateful for their
commitment to advancing entrepreneurship.
o
As these profiles illustrate, when it comes to fundraising, there is no one-size-fits-all tem-
plate, but there are patterns and principles to identify. Aside from the founders’ own com-
ments and advice, we let their decks speak for themselves.
N
Drum roll please . . . Here are the strategies and materials of fifteen ventures that crushed
it at raising money.
D o | 73

s t
Able Lending •
Po
Low-interest loans to small businesses.
r
Founding team: Evan Baehr, Will Davis
Location: Austin, TX
o
Funding round: Series A
Market category: finance; banking
y
Able is a set of engineers, math geeks, designers, and busi- Advice
ness consultants that together built a new way to fund “the “Build a deck early and then use it to refine your business
p
Fortune 5 million”—the 5 million small businesses in the model over time.”
United States that create two-thirds of all jobs, but can’t
o
access reasonably priced capital. The deck is clean with Redo
simple, to-the-point visuals. It’s also text-heavy, with the “I’d find a way to answer some of the most common objec-
bottom third of the slide often used to explain the specifics tions early on. Also, we often ended up scrapping the deck
C
of the Able model. This structure, combined with large and in our pitches and instead writing four core graphs on the
phrase-length titles, lets the reader understand each slide board. The deck should start with those.”
t
quickly, but then dig in if and when they want more.
Slide Investors Focused on Most
o
Common Mistakes Founders Make “The amortization slide, though a bit technical, is actually
“Their decks are usually terrible. They wait to meet inves- the core of the model.”
tors until they need money. They are too tense and fail to
N
build positive rapport with investors.”

s t
MEETINGS
Number of investor meetings
250
Highest:
250 meetings
Po AMOUNT RAISED
Capital raised with this investor pitch deck
150
50
Lowest:
2 meetings
60 meetings
COMPARED TO OTHER COMPANIES IN THIS BOOK

or COMPARED TO OTHER COMPANIES IN THIS BOOK
$6 million
TIMING
1 year, 8 months
First pitch deck
created
py Started talking to
investors
o
Dec. 2013 May 2015
2013 2016
t C
Idea conceived
Nov. 2013
Company officially
launched
Aug. 2014
Closed the
financing round
June 2015
INVESTORS
o
Number of investors
N
8 investors
Investor type
Angel
investors
20%
Primary locations
San
New York
City
o
Francisco
* Venture
COMPANIES IN THIS BOOK capital firms
D
* Data not available 80%
Actual Pitch Decks | 75

s t
Cover
Po Problem (Small Businesses)
Small business want credit, can' t get it
r
5,700,000: number of small businesses in the United States (SMBs):
• create 65% of all jobs in US
• employ 50% of workforce
75% of “fortune five million” is not even applying for (or has applied and cannot get) the
o
credit they desire
Banks have abandoned SMBs:

• bank consolidation eroded community banks (14,000 down to 7,000 in last 20 years),
acquisition costs very high
• regulatory overhang powerful
y
funding the fortune 5 million Result?
• SMBs are dying—this year we’ll lose 75,000 SMBs. In only 6 of last 40 years have
more SMBs been destroyed than created—each year since 2008.
p
• Going concern SMBs are not growing: 42% wanted to expand but couldn’t, 18%
couldn't hire, 16% couldn’t complete existing orders
• in this environment, big, old companies win
Problem (Lenders)
Lenders face vicious cycle
C o Competition
Able = Network Lending to SMB
o
Interest Rate
t Network
Consumer SMB
1:5 relationship
1 borrower, 5+ backers
N
Cost of Acquisition Default Rate
Traditional 1:1 relationship
Cost of Capital
D o Online lenders start out with very high acquisition costs; for example, CPC' s for ª small business loanº are often $50+. Such high acquisition costs can only be overcome when high rates /
fees are charged. Often, products with high rates attract riskier borrowers with higher default rates. At last, senior lenders demand high rates to compensate for the default risk. This
viscous cycle drives up rates and cost of capital. An example is OnDeck' s average APR of 56.1% and acquisition costs of 3-7% of total loan amount. A competitive strategy ought to include a
strategic way to decrease acquisition cost and keep cost of capital low.

Traditional lenders have 1:1 relationships between the providers of capital and the borrowers; although Lending Club does source some capital from retail investors, there is no materially
helpful relationship between themÐ they do not know each other nor do they communicate. The core strategy to tackling cost of acquisition is to build a lending network in which ª backersº
can help acquire borrowers. Vouch has done this for consumer loans; for every 12 loans they make, at least one new one comes in. With Able, for every 9 loans we fund, 3 come in.

s t
Unique Value Proposition
We apply production not consumption model

Collaborative peer rents/sells personal asset/ Collaborative peers work together to generate an asset/
inventory to be consumed by a third party
Po Solution
r
inventory to another peer
Consumption Production
increases supply
drives down cost
peers lend to each other

distributes workload
sources new intelligence
peers underwrite each other
y o
p
more retail capital more data for underwriting
lower cost to borrowers better analysis by crowd
o
Harvard economist Yochai Benkler distinguishes between two forms of collaborative cooperation: consumption versus production. As the examples above show,
Meet Able: a network of friends and family lenders

consumption is usually 1:1 with the goal of reducing price. Production is usually many:many with goal of increasing information. Lending Club and many p2p
lenders apply consumption to lower price of loan; Able is building the first p2p lender based on collaborative production of underwriting. In sum: Lending Club got
it wrong, so we' re applying the other operative mechanism of collaboration.
Case Study How It Works
t C How amortization works
N o
D o She then builds out an Angellist-like profile with the story and goals of her business. She also connects her social accounts such as Yelp and Twitter.
This is the amortization schedule for a 36 month loan. Able (senior capital) is repaid principal and interest, while backers receive principal only until the senior
has been repaid in full. At month 28, backers start receiving P+I payments. The subordinate structure and amortization schedule it allows creates a structural
advantage for Able' s senior capital. On a 36 month loan, Able recoups its principal at month 23 and recoups its principal and interest by month 28.

s t
Beacon • All-you-can-fly subscription air service.
Po
r
Founding team: Wade Eyerly, Cory Cozzens, Reed Farnsworth, Ryan Morley
Location: New York City
o
Market category: travel
y
Three of the four founders of Beacon had already built one care that you took a swing at something and it didn’t work
company that was the first to apply the subscription model out. They also aren’t worried that your team has holes in it.
p
to aviation—Surf Air—and led the first three rounds for the They do care that you know it, however. If you’re so focused
company that has now raised $88 million. In their deck, on having all the answers, you’ll come across as unaware
o
the team struck an excellent balance in communicating of the challenges ahead of you.”
the right kind of information simply and effectively.
Redo
C
Common Mistakes Founders Make “I would spend less time building it. Making the deck is a
“They think that success raising money defines them as good exercise for founders and helps focus your narrative
t
entrepreneurs. It doesn’t. Build your business. This bleeds and your thinking, but no one invests in a deck.”
into the process, as they hyperfocus on new metrics that
o
they can share. The problem is that no amount of data will Slide Investors Focused on Most
compel an investor to invest. What you have to do is tell a “I’m not sure investors even look at it. I use the deck as an
narrative. You have to sell the story that you’re onto some- e-mail attachment prior to meeting with them and never
N
thing big and that you’re the team that can do it.” actually open it when we’re together. I know the informa-
tion inside out, so we just have a conversation. I can answer
Advice the questions they actually have, as opposed to driving the
o
“Know what you’re good at and do it. Know what you’re not conversation to answer the questions that I anticipated
and be honest about it. Don’t gloss over failures, holes on them having when we built the deck.”
your team, things that didn’t work out, etc. Investors don’t

s t
MEETINGS
250
Po AMOUNT RAISED
r
The $6 million was
5 meetings $6 million tranched into two separate
150
funding events—$2 million
o
on day one, followed by
50 $4 million when we hit a
specific sales level.
COMPARED TO OTHER COMPANIES IN THIS BOOK COMPANIES IN THIS BOOK
TIMING
8 years, 3 months
py First pitch deck

created
Closed the
financing round
First showcased
flights with press
o
March 2012 Dec. 2014 May 2015
2007 2016
Idea conceived
March 2007
t C Started talking to
investors
Nov. 2014
Company officially
launched
Jan. 2015
INVESTORS
5 investors
o
Number of investors
N
Investor type
Angel
investors
30%
Primary locations
Silicon
Boston
New York
City
o
Valley
* Venture
D

s t
Cover
PoProduct
All-you-can-fly.
Unlimited access to Private Scheduled Flights
An all-you-can-fly membership service

or
py Executive Service. Refined Simplicity. Membership Community.
Team
Our Team/History.
C o Financials
Unit Economics.
t
(1 Market Ð Steady State)
WADE
FOUNDER
& FMR CEO,
SURF AIR
N o REED
FOUNDER
& FMR CFO,
SURF AIR
CORY
FOUNDER
& FMR SVP,
SURF AIR
RYAN
FMR DEPUTY
FINANCE DIRECTOR
MITT ROMNEY FOR
1 Members per Market: 1,000
2 Revenue per Member: $2000/MO
3 Monthly Recurring Revenue: $2MM
4 Aircraft Cost: $1,500/HR; $1MM/MO
o
PRESIDENT
5 GROSS PROFIT MARGIN: 45%
We know subscription airlines and sales

s t
Timeline
The Timeline.
PoCustomer Acquisition Strategy
Sales Strategy.
1Q15 2Q15 3Q15
4
4Q15
5
Begin customer facing
or
Begin operation
and expansion
efforts.
¥   Digital
¥   In-person
¥   Direct mail
¥   Trial flights
¥   Brand Ambassadors
¥   Cost to Acquire: $1K
¥   Estimated Customer:
LTV $32K
y
efforts, concierge
training, etc.
3 Begin 6-mo pre-sales period Acquisition

Methods
p
Cost & LTV
2 Establish operating agreements
in initial markets
o
Funding, begin tech development.
Growth Plan The Ask
Expansion Plan.
t C $5.5MM Raise.
$1.5MM A1 $4MM A2 is
o
Fully committed
N
1 2 3 4
Launch 2015 Growth Ð 2016-2018 Growth Ð 2019+
o
750 Members 8,000 Members 20,000+ Members Sell out our Build Establish team Launch initial
first market airline-in-a-box and airport/ market and
$1.5MM/MO Revenue $16MM/MO Revenue 40MM/MO+ Revenue (NYC-BOS) tools operator pre-sales in
relationships next markets
D
8/23/15 7:07 AM
s t
Connect • Global messaging platform.
Po
r
Founding team: Ryan Allis, Caen Contee, Anima Sarah LaVoy, Zachary Melamed
Location: San Francisco, CA
o
Market category: mobile; messaging
y
Connect is cofounder Ryan Allis’s second venture. He Advice
helped grow his first startup, iContact, to 300 employees “Keep your costs low and raise very little money, under
p
and $50 million in annual sales and sold it in 2012. Ryan’s $50,000, until you know that you have something. Unless
commitment to relationships has led him to become one you have $10,000 a month in recurring revenue or 10,000
o
of the most well-connected entrepreneurs around. Connect daily active users, don’t raise outside capital. Take consult-
focused on building a business with significant traction ing gigs or freelance work on the side; work as a barista;
before they raised money, which is reflected in their deck. keep your day job; whatever you have to do to keep your
C
costs super-low until you have product-market fit and ac-
Common Mistakes Founders Make tive engaged users. Once you have that, then you ramp up.”
t
“Raising too much money, too early on. I often see compa-
nies raising tens of millions of dollars now, before they’ve Redo
o
proven the value proposition, which makes their monthly “I would have waited even longer to raise our first outside
net losses too high and forces them to continue to raise round of capital. We had 1.5 million users when we raised
more and more money. Also, entrepreneurs don’t take the our Series A. However, we still had a few more risks to get
N
time to understand the environment in which they’re oper- past in order to achieve true product-market fit. In hind-
ating. If you don’t understand your industry’s history and sight, I would have waited to invest in marketing and ad-
can’t tie that together with what you’re building today, then vertising until we had retention really nailed.”
o
investors will think that you haven’t done your research.”
“ ‘Monthly Active User Trends’ and ‘Total Usage Trends.’ ”
D 82 | CreAte Your PitCh

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
2 meetings

$10.3 million
TIMING
2 years, 2 months
py Company officially
launched
Started talking to
investors
o
Sept. 2013 April 2014
2012 2015
Idea conceived
May 2012
t C First pitch deck

created
March 2014
Closed the
financing round
June 2014
INVESTORS
2 investors
o
Number of investors
N
Investor type
Angel
investors
10%
Primary locations
San
Francisco
o
Palo Alto,
CA
* Venture
D

s t
Cover
o
Confidential
P
Traction
Total Connect Users
EOM Total Users
r
Feb-14 5,923
Mar-14 66,875
Investor Deck Apr-14 103,427
o
October 1, 2014 May-14 341,452
Jun-14 601,521
Jul-14 956,241
Aug-14 1,405,082
y
Sep-14 1,806,014
1.66M users as of September 16, 2014 adding 400k/mo.
Unique Value Proposition

How We’re Different
Connect is building the world’s best tool for staying connected to the people you know.
Key differences from Facebook include:
o p Solution
The New Way To Stay Connected
t C
o
Map UI All your contacts Mobile first Metagraph of Social, Newsfeed w/o Mindless
& Location Data together experience Email, & Phone 3rd Party Content
Social contacts Rich profiles Social map Travel map Activity Feed
N

s t
Competition
Competitive
Related Landscape
App Ecosystem
Sharing Apps Communication Apps

Team
o
Leadership Team
P Ryan Allis, Chief Executive Officer

Led iContact as CEO from 2003-2012 from startup to 300 employees, 70,000 customers, $50M in
annual sales, and $170M sale to Vocus (NASDAQ:VOCS). Three-time INC 500 CEO (2009-2011).
r
Completed year one of Harvard MBA before leaving to start Connect. Believes in building world class
cultures and beautiful user experiences. Passionate about creating a more authentically connected
world.
Anima Sarah LaVoy, Innovation
Leads product innovation at Connect. Background in psychology, social behavior, and political organizing.
o
Skoll Scholar and MBA from Oxford University.
Zach Melamed, Engineering

Previously co-founder at LaunchRock. Backend engineer for 10 years. Builds NoSQL and relational DBs and
integrates social APIs in his sleep. Completed 90% of M.S. in Software Engineering from Penn State before
leaving to build LaunchRock.
y
Contacts Apps Location Apps
Caen Contee, Marketing
Leads marketing and business development at Connect. Serial entrepreneur with background in
communications, languages and international relations. 4.0 GPA as Dartmouth College undergrad.
Milestones
Company Milestones
Pre-2014 Acquired Connect.com domain name from Sony for $1.65M

Built beta version of product and tested with 16,000 users
Filed two patents in geolocation normalization and social data integration
o p
Press
Early Press Coverage
Connect is the Ultimate Address Book, Shows a Map of Everyone you Know
Feb 25, 2014
C
Raised $2.5M in initial funding from CEO
Connect Debuts A Living Address Book That Maps Your Nearby Friends
Feb 25, 2014
Feb 2014 Launched iPhone app and web app, won LAUNCH Festival 2014 in San Francisco
t
Mar 2014 Feature in App Store in Social Networking Category, top 3 Social App in SXSW Accelerator
Bootstrapped Connect wins Launch, ready to storm SXSW
Passed 100k users and 10k DAUs Feb 28, 2014
Apr 2014
May 2014 Passed 300k users and 50k DAUs

Why Connect Isn't Just Another App That Increases Technology Dependence
o
March 10, 2014
June 2014 Closed on $2.8M in new angel funding, passed 600k users
Aug 2014 Passed 1M users and 100k DAUs 7 Apps You Can Use To Build & Nurture Your Network
March 20, 2014
Sep 2014 Passed 1.5M users
N
See full coverage at http://connect.com/press
D o Actual Pitch Decks | 85

s t
Contactually •
Po
Contactually helps professionals turn relationships into results.
r
Founding team: Zvi Band, Jeff Carbonella, Tony Cappaert
Location: Washington, DC
o
Funding round: Series seed
Market category: sales and marketing, customer relationship management
y
Contactually is a customer relationship management soft- Advice
ware that aggregates online communication and inter- “Enjoy it. Every part of the company, including fundraising,
p
action in order to help users maintain relationships with should be a fun and exciting experience. If you are hating
important contacts. Cofounded by Zvi Band and Tony it or feel your back is up against the wall, change things.”
o
Cappaert, Contactually got an early boost in 2011 when it
was backed by the accelerator 500 Startups. The team then Redo
used that momentum to raise $3 million over two rounds of “I would focus a lot more on the narrative. We spent a lot of
C
funding. The deck relies on a combination of short, digest- time talking about data and checking the boxes of what’s
ible copy and graphics. in a VC pitch. But we spent very little time thinking about
t
crafting a concise narrative for what we’ve built and where
Common Mistakes Founders Make we’re going.”
o
“Don’t pitch everyone. Focus just on the investors for whom
your company is in their wheelhouse. Also, don’t be afraid Slide Investors Focused on Most
to ask for a clear path forward and a yes or no.” “Product, market, competition.”
N

s t
MEETINGS
250
Po AMOUNT RAISED
150
50

80 meetings
or $3 million
(over two rounds)
TIMING
1 year, 1 month created
py
First pitch deck Closed the
financing round
o
Oct. 2011 March 2012
2011 2013
Idea conceived
May 2011
t C Backed by 500
Startups accelerator
Oct. 2011
Started talking to
investors
Nov. 2011
Company officially
launched
May 2012
INVESTORS
o
Number of investors
N
6 investors
Investor type
Accelerators
5%
Angel
investors
10%
Primary locations
Boston
Washington,
DC
Berlin,
Germany
o
Cities in
California
* Venture
D

s t
Cover
Po Overview
or
y
Relationship Marketing Platform
Zvi Band, Co-Founder/CEO
Contactually is a relationship marketing platform
p
Tony Cappaert, Co-Founder/COO
that helps professionals keep and generate business from
their existing network.
Investment Highlights
Contactually at a glance
C o How It Works
CSV
Calendar
o t 1
We aggregate, merge, & find social data for
all of a user’s contacts and interactions
A
Hot Leads
2
B
Warm Leads
through in-app plugins & games

C
Referrals
We help the user prioritize their contacts

D
Not Important
N
2.9K paid $1.5M
$1M ARR
accounts raised www.contactually.com
FROM: @
TO:
SUBJECT:
Growing 15%+ MoM ACV = $453
o
Up 9x in 12 Months LTV = $898
We help the user interact with their network in a By regularly following up, users delight
meaningful & relevant way, via automatic follow up their contacts and stay top of mind, resulting
reminders & other features in more referrals and more $$$
D
3 4

s t
Traction
Contactually is habit-forming
(and our users love it!)
PoCompetition
We’re uniquely positioned against

other competitors & partners
Follow Ups / Mo
6
9
Customers Active @ 60d
31%
57%
Net Promoter Score
or
39
SFA / CRM
Relationship Marketing
Marketing
Automation
y
13
+50% in 4 mos +84% in 6 mos +300% in 2 mos
p
Sept 2013 Jan 2014 July 2013 Jan 2014 Nov 2013 Jan 2014
• Increasing follow ups sent is the #1 • More customers active within 60 • Launched NPS in Nov to track
driver of higher paid conv & NPS days leads to lower churn customer sat
• We built new features in 2013 -- • Habits start forming at 60 days = • Product improvements, faster
o
templates, programs, ScaleMail -- to key metric for stickiness support, and new CSM efforts were
encourage more follow ups all drivers
= Contactually Integration Partner Industry-specific competitors (Ex: Real Estate)
Customer Acquisition Strategy The Ask
We generate trials via four main

channels (nearly all organic)
t C We’re raising a $5M Series A

with three goals
o
Monthly trials
900 • Contactually ebooks, whitepapers, blogs
Content +38% MoM • Co-promoted webinars, training events 1. Ramp up sales: Scale inside sales team and develop
outbound sales practice
N
600
Integrations +2% MoM
2. Optimize the platform for scale & ROI:
Resellers 350 • Industry-specific consultants Improve performance & deliver value, esp for teams
+5% MoM • Trainers & speakers
3. Emphasize thought leadership: Drive lead gen
o
180 • Contactually teams (17% of users) via content marketing and partnerships
In-app Referrals +20% MoM • Invites to other contacts (2% of users)
D
= 2,030 trials/mo, growing 10% MoM

s t
DocSend •
Po
DocSend tells you what happens to your documents after you send them.
r
Founding team: Russ Heddleston, Dave Koslow, Tony Cassanego
o
Market category: software
y
Armed with computer science degrees from Stanford and Advice
experience working at companies like Facebook and Drop- “Focus on your strengths. Be sure to tell investors why
p
box, Russ Heddleston, Tony Cassanego, and Dave Koslow you’re different and be sure to bring something unique to
founded DocSend, a service that tracks everything that the table. This could be a hundred interviews with poten-
o
happens to a document after you share it. The service be- tial customers, it could be 10,000 signups, or it could be
came a hit among people sharing pitch decks themselves. your background of ten years building machine learning
DocSend’s deck is heavy on copy and uses neutral colors to software.”
C
avoid drawing attention away from the words.
Redo
t
Common Mistakes Founders Make “The design on this deck is atrocious. Our newer deck
“It’s all about quality, not quantity. Create a list of thirty looks a ton better. We also have a lot more detail on our
o
investors who you actually want to meet with. Set up at target user.”
least twenty meetings in a two-week period. Do this at
least a few weeks out. If you can’t get any of those twenty Slide Investors Focused on Most
N
to invest, you need to change something before you try “The team slide was viewed the longest on average, fol-
again.” lowed by the competition slide.”
D o 90 | CreAte Your PitCh

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
30 meetings
or $1.7 million
TIMING
2 years, 11 months
py First pitch deck

created
Closed the
financing round
o
Sept. 2013 Oct. 2013
2011 2015
Idea conceived
July 2011
investors
Sept. 2013
Company officially
launched
May 2014
INVESTORS
o
Number of investors
N
6 investors
Investor type
Angel
investors
50%
Primary locations
San
Francisco New York
City
o
Palo Alto,
CA
* Venture
D

s t
Cover
Po Team
r
●
DocSend
o
● Stanford BS Computer Systems, MS Computer Science, Harvard MBA
● Co-founder and COO at Pursuit.com (acq. by Facebook)
● Also at Greystripe, Dropbox, Trulia
y
● Stanford BS Computer Science
● Engineering Manager, Greystripe (acq. by ValueClick)
● Built doc sharing service Backboard at Increo (acq. by Box)
Overview
o p How It Works
●
●
●
Stanford BS and MS Computer Science
Engineering Manager, Greystripe (acq. by ValueClick)
Also at Google, Palm
t C DocSend
N o DocSend
Who

How

s t
Problem
Po Business Model
●
●
or ●
●
●
y
● ●
●
●
p
●
o
●
●
Competition Screenshot
C
How
o t DocSend
N

s t
First Opinion •
Po
A qualified doctor available 24/7 at no cost.
r
Founding team: McKay Thomas, Jay Marcyes
o
Market category: parenting; health and wellness; mobile health
y
First Opinion lets parents, specifically young moms, track lot of talk in this book about decks, but my lasting advice
their children’s health issues and gives them the ability is to keep your hands on the table, not on your iPad. Keep
p
to connect them with a doctor when necessary. Founder your eyes locked on the person you’re meeting with, not
McKay Thomas included pictures of him and his children in on a slide. Talk about them and their family and what they
o
the deck, making the story more personal and compelling. find interesting, not your business. Make them bring up
your business. Be honest. Be yourself. Set out to make a
Common Mistakes Founders Make friendship, not a business deal, and you’ll likely find both.”
C
“Build relationships; don’t pitch your business. I have fond
memories with nearly every person who invested in my Redo
t
seed, and that’s no coincidence. Keep your deck in your “I’d add more substantiated data about the target market
bag; rather, make a new friend with the person across from (new parents) and the total addressable market (urgent
o
you. You’ve got thirty minutes to make yourself memora- care, primary care). I’d also shorten the explanation of the
ble, and it’s not in your deck. It’s you. You are what makes product and make it even more emotional.”
your business special at the seed stage. Make sure whom-
N
ever you’re meeting with feels that.” Slide Investors Focused on Most
“ ‘The Market in the Middle’ slide explains what I intend
Advice to accomplish with First Opinion and at the same time ex-
o
“Be the most genuine, thoughtful, loving version of your- plains why no one has created this product before. When
self. And speak with so much passion that you’ll be the you look at the market size on either end, it’s clear there’s a
only person on their mind for the next ten years. There’s a ton of value to be captured.”
D 94
| CREATE YOUR PITCH
8/23/15 7:07 AM
s t
MEETINGS
250
Po AMOUNT RAISED
150
50
35 meetings
or $2.6 million
TIMING
2 years, 3 months
First pitch deck
created
py Located
cofounder
Closed the
financing round
Brought on chief
operating officer
o
Dec. 2012 June 2013 Dec. 2013 March 2014
2012 2015
Idea conceived
Jan. 2012
investors
Dec. 2012
Company officially
launched
Dec. 2013
INVESTORS
o
Number of investors
N14 investors
Investor type
Friends and
family
0.5%
Angel
investors
4%
Primary locations
San
Francisco
Chicago
D o *
COMPANIES IN THIS BOOK
* Data not available
Venture
capital firms
95.5%
São Paulo,
Brazil

s t
Cover
Po Team
or
py
Problem
C o Solution
o t
N

s t
Opportunity
Po Customer Acquisition Strategy
or
py
Customer
C o The Ask
o t
N

s t
Freight Farms •
Po
Everything to allow anyone, anywhere, to become a producer of local,
sustainable greens and herbs.
Founding team: Brad McNamara, Jonathan Friedman

Location: Boston, MA
Market category: Internet of Things; mobile commerce; agriculture
or
You might not think of Boston as farmland, but Freight
Farms cofounders Brad McNamara and Jonathan Friedman
created a product that enables anyone to grow farm-fresh
py call each other on the BS. To that end, the best advice is to
have a great cofounding team.”
o
produce year-round. By building and selling their prod- Advice
uct before trying to raise capital, they were able to prove “Build and sell it first, then look for money. If you can sell
there’s a market for what they were making. Clean, crisp your dream and prototype for real money, it’s much easier.”
C
pictures combined with straightforward, short copy help
grab and keep a reader’s attention and let the product Redo
t
speak for itself. “I wouldn’t change anything; all the information and style
were reflective of where we were as a company at that
o
Common Mistakes Founders Make stage.”
“All the same mistakes we made. Listening to the press,
reading your own clippings (or lack thereof), not listening Slide Investors Focused on Most
N
to the right people, listening to the wrong people. Biggest “The slides that provoked the most discussion were the
mistake (we avoided this one) is losing sight of what you sales, business model, and customer economic returns
ultimately are going to accomplish. To convince people slides.”
o
to invest, you’ll need to do a lot of nitty-gritty detail stuff,
business modeling, etc., that can derail your original plan.
Try to check back in with your cofounder often enough and

s t
MEETINGS
250
Po AMOUNT RAISED
150
50

100+ meetings
or $1.2 million
TIMING
Almost 4 years
Started talking to
investors
py Closed the
financing round
o
April 2011 Dec. 1, 2013
2010 2014
Idea conceived
Early 2010
May 2010
t C
Company officially
launched
First pitch deck
created
Jan. 2012
INVESTORS
o
Number of investors
3 investors
N
Investor type Primary locations
San
Boston
o
Francisco
* Venture
D

s t
Cover
Po
Opportunity
PROBLEM INCREASING SUPPLY CHAIN VUNERABILITY

ACROSS THE GLOBAL FOOD SYSTEM
r
2014 COMPANY HIGHLIGHTS
INSIGHT MARKET DEMAND & WILLINGNESS TO PAY FOR

1 2 E M P L O Y E E S PRODUCT CONSISTENCY & TRANSPERENCY
o
2 0 + U N I T S D E P L O Y E D
U . S . & C A N A D A D I S T .
MKT LANDSCAPE HOBBY COMMERCIAL
E X P A N D E D M F G . C A P A C I T Y AT HOME KITS
DISPARITY OF MARKET ENTRY OPTIONS
GREENHOUSE or TRADITIONAL
PERSONAL USE MARGINS AT LARGE FOOTPRINT

I M P R O V E D C U S T O M E R P A Y B A C K
y
SMALL YIELD HIGH OPS and EXECUTION RISK
R E C U R R I N G R E V E N U E S T R E A M S
E X T E N D E D P R O D U C T L I N E
OPPORTUNITY
p
MAKE COMMERCIAL CROP PRODUCTION EASY TO
INTEGRATE AND SCALE LOCAL TO THE DEMAND
Mission
ALLOW BUSINESSES TO EASILY

CONTROL THEIR SUPPLY CHAIN
C o Unique Value Proposition
t
BY PROVIDING THE
ENABLE COMMERCIAL
CROP PRODUCTION
N oINFRASTRUCTURE TO SCALE
FOOD PRODUCTION
IN ANY ENVIRONMENT
IN ANY CLIMATE
WITH A FRACTION OF
LAND, WATER & LABOR

s t
Product
LGM Po Product
farmhand
r
THE
¥   Connect to your farm from anywhere
(LEAFY GREEN MACHINE)
o
¥   24/7 access and visibility to your farm
¥   Ready to grow 1200 heads per week ¥   Monitor Water and Climate conditions
¥   Fresh produce 365 days a year ¥   Receive Alerts and Notifications
¥   95% Less Water Use vs. Conventional ¥   View live in-farm video
y
¥   Grow your market with the farmhand hotspot
¥   Delivered Fully Assembled
¥   Data logging
¥   Easy to Use + Fast Learning Curve
¥   Food Safety Mgmt
p
¥   Automated Climate Mgmt
¥  1800ft of Production inside 320sqft
Customer
C o Market
o t
N

s t
Hinge • The dating and relationship app for young professionals.
Po
r
Founding team: Justin McLeod
o
Market category: dating and social discovery
y
Founded by Justin McLeod, Hinge is the dating app for re- Redo
lationships, which works by introducing users to friends of “I would have sold more of a vision up front about what we
p
friends. Hinge’s deck opens by arguing for why mobile dat- believed the dating app market would look like. This was
ing apps would be increasingly popular. We like the way mid-2013, before dating apps were popular. A better case
o
Hinge goes beyond basic user numbers to show traction could have been made that most single people would be
and focuses on visualizing their most important metrics: using dating apps by 2015.”
frequency of use and retention over time.
C
Common Mistakes Founders Make “Investors spent the most time challenging the size of the
t
“Entrepreneurs are often too willing to talk to any inves- market, both in terms of number of people and in terms
tor, which is not only a waste of time, but worse, it shifts of dollars, given that ‘Match had already saturated the
o
the power dynamic in favor of the investor. Investing is market.’ Our belief was that the market would be an order
like dating; it works better when your partner feels lucky of magnitude larger than it was in 2013, and that Match
to have you.” would NOT be the prime player.”
Advice
N
“No matter the stage, entrepreneurs should narrow the
o
field, make the deal seem exclusive, and make investors
feel that they are being chosen not just because they’re the
only ones willing to fund.”
D 102
| CREATE YOUR PITCH
8/23/15 7:07 AM
s t
MEETINGS
250
Po AMOUNT RAISED
150
50
50 meetings
or $3.1 million
TIMING
2 years, 3 months
py
Company officially
launched
Started talking to
investors
o
April 2012 April 2013
2011 2014
Idea conceived
Feb. 2011
Aug. 2011
t C
First pitch deck
created
Closed the
financing round
Nov. 2013
INVESTORS
o
Number of investors
N 28 investors
Investor type
Friends and
family
10%
Angel
investors
40%
Primary locations
New York
City
Washington,
o
DC
* Venture
D

s t
Cover
Po History
HISTORY OF ONLINE DATING

Current dating sites originated in a pre-social, pre-mobile world.
or 1995
Match.com eHarmony
2000
okCupid
2005 2010
y
Facebook iPhone
(social) (mobile)
p
The Facebook / smartphone generation is now aging into
the prime market for dating sites: ages 23 to 36.
o
Justin McLeod, CEO | justin@hinge.co

Problem Solution
80%
Ò ONLINE DATINGÓ FOR 23-36
Current offerings donÕ t appeal to this generation.
t C HOW HINGE WORKS

No Profile
One-click signup via Facebook
o
Singles 18-301
People already have an identity.
Ò I donÕ t want to create
a dating site profile.” Right People
Friends of friends, or their friends
N
40%
“I don’t think I’d find the Uses the Facebook social graph
right kind of person.” and other ambient information
Moves Offline
0% Social validation + natural intros
o
Life Site Site
Bad
Dat
ing
Trie
d Dat
ing
Use
Dat
ing
Friend in common and content-rich
introductions facilitate meetings
1 Survey of ~300 people conducted by Hinge in 2012 and confirmed by TechCrunch article Oct 21, 2013
Confidential | Copyright 2013 Cleod9 Inc Confidential | Copyright 2013 Cleod9 Inc
D
Tuesday, October 22, 13 Tuesday, October 22, 13

s t
Traction
45000"
GROWTH
Po
Competition
CORE METRICS
r
11
Ò Quadrant I includes apps
40000" 10 HINGE that are used intensively and
35000"
to which consumers are loyal
over time ... On average,
o
30000" because these apps tend to
have stable, growing
25000"
DC" audiences, they are best
NY" positioned to generate
20000" Philly" advertising revenue or
Boston"
charge a subscription.
y
15000" Consumers perceive these
apps to deliver enduring
10000"
value over time.”
p
Source: Flurry Analytics (blog.flurry.com)
5000"
0"
February" March" April" May" June" July" August" Sept"
o
Market Product
140M+
THE DATING MARKET
t C
Friend-of-friend dating,
SNEAK PREVIEW: HINGE 3.0
o
like social networking, is
38M
13M
a network effects ¥ enhanced messaging
Major
business where you have ¥ personalized introductions
to be where your friends ¥ profile editor
N
US Cities
Broader US
are. This naturally ¥ match up friends (viral loop)
propels one market ¥ improved speed / perf
Global leader to the top (i.e.
Facebook) - and the iOS Release Date: Nov 14, 2013
o
market is very large.
Single Smartphone Users 23-36
D

s t
Karma •
Po
Get online easier than ever before by bringing Wi-Fi with you, everywhere you go.
r
Founding team: Stefan Borsje, Steven van Wel, Robert Gaal
o
Market category: internet service providers; telecommunications; mobile
In early 2012 on a trip to New York, Steven van Wel was Common Mistakes Founders Make
y
talking about Karma over lunch with a friend. Suddenly, “A commitment isn’t closing. Till the money is in . . . keep
this crazy guy walks up, tells him “hi,” and walks off. A few pitching. Maybe always means NO.”
p
hours later, Steven got an e-mail from David Tisch, at the
time, the managing director of Techstars NYC. “You don’t Advice
o
know me,” David wrote, “But I just met you and you should “Always follow up after every meeting. Send out weekly
move out to New York to join Techstars.” That was the start updates to everyone you’ve met with.”
of Karma’s fundraising journey. Karma’s deck does a lot in
C
a small amount of real estate. Consistent formatting (big
title at the top, main visual and content in the middle, and
t
extra data at the bottom) keeps the deck clean and easy to
digest.
N o

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
14 meetings
or $2.3 million
TIMING
10 months
py First pitch deck

created
Closed the
financing round
o
Jan. 2012 Aug. 2012
2011 2013
t C Idea conceived
Nov. 2011
Started talking to
investors
Feb. 2012
INVESTORS
Not available
o
Number of investors
N
Investor type
Angel
investors
50%
Primary locations
San
Francisco New York
City
o
Las Vegas
* Venture
D

s t
Cover
o
Overview
P Meet Karma
or Karma is the easiest way to get online. By unlocking WiFi we

will make it possible for everyone to bring their own
bandwidth, anywhere in the world.
Today, our Social Bandwidth hotspot brings frictionless WiFi

sharing to the masses. It's WiFi for everyone to use.
py
o
Karma. WiFi Made for Sharing.
How It Works Customer Quotes
How it works
t C Why customers love us today

Data never expires, ever.
o
Additional
+100 MB
PAYG Data Pay only for what you need.
$14/GB
To get you
started
Existing Be productive, everywhere you go.
Social networks and Say goodbye to squatting for WiFi.
Bandwidth
N
infrastructure
On every Karma
enabled device Mobile hotspots, It’s WiFi Made for Sharing.
hotels, airports, etc Now that's good Karma!
o
1 2 3
An open Wi-Fi signal Accessible for everyone Device & network agnostic Within minutes I had three or four I basically leave it on all of the time My only criticism would be to have
people who’d hopped on. because I want other people to Karma work in more cities so that I
Anyone can connect to Bring Your Own Bandwidth, we'll Works across multiple networks connect to it and use it. could use it everywhere I go!
D
Karma WiFi. take care of everything else. and devices, seamlessly. – By Alex Payne
– By Charles Hudson – By Tina Melamed

s t
Traction
Six months in Monthly
Po
Solution
Fixing the world’s broadband problem.
r
Revenue
$110,000
A network of networks. Our software bridges existing infrastructure to provide
frictionless access to the Internet. We're moving your data from
fro provider A to
provider B. Our customers always interact with Karma.
o
Monthly
Revenue
$45,000
Use
Monthly -2GB
Buy
y
Revenue
10GB
$30,000 Use
-1GB
p
Use
-2GB
Own
o
Month-over-Month 32.22% 13.02% 19.03% 5GB
growth rates Gigabytes Sold Access Points Sold Users Added
Go-to-Market Strategy Team
Go-To-Market strategy
TODAY PHASE 2 • Q1 2014
t C PHASE 3 • Q3 2014
Our team
Co-Founder & CEO Co-Founder & CTO COO
o
Social Bandwidth Partner WiFi Powered by Karma Steven Stefan Robert
We've successfully Leverage existing Karma’s software pre- van Wel Borsje Schouwenburg
launched our customer infrastructure to enable installed on devices. A A designer, real-estate The back-end brains behind Moved from a tour operator to
acquisition model in 80 Karma log-in on partner seamless log-in developer, runner and dad. He Karma. Previously worked at an Internet provider to satellite
N
major US cities. access points. for the masses. has done it all. Co-founded IDG. Co-founded online press communications systems. Co-
cloud printing startup Marvia release startup PressDoc in founded Shapeways in 2007.
RESULTS GOALS GOALS in 2007. 2009.
2 networks 4 networks 10 networks
6,000 access points 50,000 access points 100,000 access points
25,000 users 1M users 2M users
o
Total team of seven. Specialized in development, product, biz-dev and marketing.
As we continue to add more networks. Customers will

be able to use their data on each network.
Making networks a "dumb pipe" to our smart data.
D Actual Pitch Decks
| 109
8/23/15 7:07 AM
s t
Man Crates • Bragworthy gifts for men.
Po
r
Founding team: Jonathan Beekman, Sam Gong
Location: Redwood, CA
o
Market category: e-commerce
y
Man Crates is a beautiful example of the power of brand Advice
and customer experience. Out of what would seem like an “Once you decide to start raising, focus on nothing else.
p
overcrowded space—online gift-giving—cofounder Jonathan It’s tempting to devote ten hours a week to fundraising,
Beekman has built a massively profitable business by fo- but it’s more like an eighty-hour-a-week full-time job. The
o
cusing on building experiences people love. We like the faster you close, the faster you can get back to building
“Customer Satisfaction” slide in particular. It shows Man your business. So plan to be fundraising for twice as long
Crates’s Net Promoter Score stacked side-by-side with as you think it’ll take, and if you close before then, consider
C
some of the world’s most well-known brands. yourself lucky.”
t
Common Mistakes Founders Make Redo
“It’s very easy to waste time answering questions from in- “I’d spend a bit more time on the formatting and polish. I
o
vestors who aren’t really all that interested in investing. nearly always present this deck in person, so as a stand-alone
Some investors would rather get a free option on investing document, it’s not as useful as it could be. Before sending to
than just say no. You should push for a yes, but absent that, investors, I’d trim a few of the slides so the deck was more of
N
push for a no. Ignore anyone who says “maybe” without a teaser intro to help facilitate a face-to-face meeting.”
giving you specifics on when they’ll make their decision;
for the most part, these investors are a waste of time. Focus Slide Investors Focused on Most
o
on those who have yet to say yes or no.” The financial slide.

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
50 meetings
or $3.1 million
TIMING
3 years, 3 months
Company officially
launched
py
Started talking to
investors
Closed the
financing round
o
March 1, 2012 June 2012 Dec. 2014
2011 2015
Idea conceived
Oct. 2011
t C First pitch deck

created
June 2012
INVESTORS
o
Number of investors
N 15 investors
Investor type
Angel
investors
100%
Primary locations
San
Francisco
Chicago
o
Durham,
Palo Alto,
NC
CA
*
COMPANIES IN THIS BOOK Austin,
TX
D

s t
Cover
Po Vision
Man Crates Vision
or
py To become the dominant brand in the
$150B+ menÕ s gift space by making
gift-giving fun and awesome again.
Market
Gifting is Huge & Broken
C o Problem
Online gifts lack face-to-face

personality and impact
$150B
Spent Annually on
o
Gifts for Men in US
$4B
t ValentineÕ s Day
$12B FatherÕ s Day

50.00%$
45.00%$
40.00%$
35.00%$
30.00%$
Total&Retail&vs.&Gi.&Spend&Online&
N
25.00%$
Retail$
20.00%$ Gi1s$
Christmas /
15.00%$
É and no one is $60B

10.00%$
Happy End of Year

5.00%$
o
0.00%$
2012$ 2013$ 2014$
•  Nearly half of all gift spend happens online vs. only 6% of retail
•  Human element increasingly lost Ð gifts are becoming less personal
$106B Ò CoreÓ Gifting •  Online retailers donÕ t do gifting well:
D
(Everything Else) Stuff + invoice + tiny note ≠ good gifts

s t
Solution
Man Crates Formula
Personalized Authentic, Fun

Po
Screenshot
One experience example:
Awesome
Products +
Customer
Experience
& Engaging
+ Brand
or
py
Core Metric
Customer Satisfaction
C o Customer
Customer Demographics
t
Net Promoter Score
Buyers Recipients
90
80
o
70
60
50
N
Google Trader Southwest Amazon Apple Nordstrom Man Crates
Joes
Average Product Social Media Buzz

Review Score Female Customers Male Customers
4.9/5.0
D o •  80% of Household Spending

•  Spend > $1K/year on Gifts
•  Average age 21-55
•  Validators of Brand Authority
•  Represent Market Creation
•  Recipients turned buyers

s t
Reaction, Inc. •
Po
Designs and manufactures humanitarian-focused products.
r
Founding team: Michael McDaniel
o
Market category: Clean technology; hardware and software
y
Reaction is a design-centered venture, and their deck re- company, your dream, and your work, and introducing a
flects that. What could be thought of a sleepy industry lot of new voices in exchange for capital. Only go down
p
(“temporary housing”) is made fascinating by a big idea this route as a method of last resort or with the certainty
communicated through beautiful design and compelling that a raise will get your company where it needs to be.
o
market data. All physical product companies should em- Then raise only what you need and at a valuation that you
ulate their excellent use of product photography in this can live with forever. Remember, fundraising is not the end
deck. Moreover, Reaction’s social mission comes through game; it is just the beginning.”
C
subtly but strongly.
Redo
t
Common Mistakes Founders Make “I would add a product road map slide to show the vision
“(1) Not telling a compelling story with a long-term vi- and ambition of the company over a seven- or even a ten-
o
sion. Create a company with a future; (2) Not doing dry year time span. This one slide would have told investors
or practice runs of their pitches before going on the road; that we are not a flash in the pan or that we would not get
(3) Wasting time with pitch competitions or pitching to the bored with things sixteen months in.”
N
wrong audiences in general.”
Advice “Competitive landscape.”
o
“There are lots of creative ways to raise funds these days,
so make sure that venture capital is the right funding
vehicle for your needs. You are selling off a part of your
D 114
| CREATE YOUR PITCH
8/23/15 7:07 AM
s t
MEETINGS
250
250 meetings
Po AMOUNT RAISED
150
50
or $1.5 million
TIMING
8 years, 8 months
py Started talking to
investors
Company officially
launched
o
Aug. 2013 March 2014
2005 2015
Idea conceived
Aug. 2005
t C
First pitch deck
created
April 2007
Closed the
financing round
Jan. 2014
INVESTORS
o
Number of investors
N 31 investors
Investor type
Accelerators
0.4%
Angel
investors
64%
Primary locations
San
Francisco
New York
City
D o *
Venture
capital firms
36%
Los Angeles
Austin,
TX

s t
Cover
Po Overview
or
py
Problem
C o Solution
o t
N

s t
Product
Po Competition
or
py
Go-to-Market Strategy
C o Team
o t
N

s t
Shift • Takes care of every step in buying or selling a car.
Po
Better deals, real advice, and free on-demand test drives or appraisals.
Location: Santa Monica, CA

Market category: technology
r
Founding team: George Arison, Christian Ohler, Minnie Ingersoll, Joel Washington, Morgan Knutson
o
Shift’s deck opens with a description of each founding team
member’s accomplishments—one of Shift’s key strengths.
The minimalist design reinforces their mission to sim-
py Advice
“Focus on the people you will be working with, more than
any other optimization. In my view, the team is the most
o
plify a complex and broken process. We love their use of important and awesome thing about Shift. I have incred-
full-bleed imagery and focus on showing the product. Fi- ible cofounders, both technical and operational, without
nally, the photography of the filled car garage—the “hub”— whom none of this would have been possible. The biggest
C
reminds that reader that this is not merely a vision—it thing is team. Bring onboard awesome team members, be-
is live. fore you do anything else.”
Common Mistakes Founders Make
o t
“(1) Lots of CEOs think that valuation drives how much
you raise. In reality, it’s how much you raise that drives
the valuation; (2) Optimize for raising more money than
Redo
“I was actually pretty happy with the deck, so not much to
change, especially since the final version has some edits
from VC feedback.”
N
you need; do not optimize for dilution. At an early stage,
raise thinking that you will have no revenue for eighteen Slide Investors Focused on Most
to twenty-four months; (3) Don’t focus on the funds, focus “Team and product vision.”
o
on partners at those funds; what matters is who you are
working with day to day.”

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
30 meetings

$23.7 million
TIMING
3 years, 6 months created
py
First pitch deck Company officially
launched
Closed the
financing round
o
Aug. 2012 Dec. 2013 Oct. 2014
2011 2015
Idea conceived
May 2011
investors
Sept. 2013
INVESTORS
o
Number of investors
N 82 investors
Investor type
Angel
investors
25%
Primary locations
San
New York
City
o
Francisco Washington,
DC
* Venture
D

s t
Cover Team
Po Our founding team has built products that have redefined industries
We make car buying, selling, and ownership delightful
or George Arison
CEO
!
Co-Founder of
Taxi Magic
!
PM at Google
!
Christian Ohler
CTO
!
Dropbox API
!
Google Wave 
and App Engine
!
Minnie Ingersoll
COO
!
Founder, Google Fiber 
PM at Google ~12y
!
San Francisco
Joel Washington
Product & Marketing

!
Product at Videology
!
Investing Marketing Tech
at Comcast Ventures
!
Morgan Knutson
Design
!
Lead product designer
Dropbox
!
Lead visual designer
Google+
y
Ran campaign for Computer-assisted Commissioner BCG !
Georgian opposition brain surgery ! ! Kleiner Perkins
Harvard MBA / Stanford MBA / Design Council
Stanford CS Harvard Econ & Gov !
Forbes 30 under 30 in tech
Privileged and confidential - George Arison - george@shiftcars.com!
Market
The United States Car Market
"Dealer Quality"
o p
Problem
Buying and selling used cars sucks
C
New & Used Cars Used Cars Used Cars Used Car SAM
SLEAZERS
$1T $540B $490B $105B
t
Dealership Craigslist eBay Motors
$12,000 Average Price $14,000 average price $3,000 net revenue per car
x x (includes add-ons)
45M used cars (US only) 35M Ò dealer qualityÓ cars x High cost Sketchy test drives No test drive
(sold by dealers and private party) 35M Ò dealer qualityÓ cars
(worth $490B)
Inconvenient Inconvenient Inconvenient
o
Poor customer experience Very low trust / Lemon problem Limited local inventory
Low trust Limited financing options
New car market is ~$500B

(15.5M new cars sold in 2013, average price $31,000)
N

s t
Solution Product
Po The Hub
r
Car Enthusiast assesses the car, CE supports seller and
gives customer a price, signs contract buyer in the purchase process
Car Process
o
CE brings car to the warehouse
preps it for sale; the customer CE takes car to buyer
never sees the car again for a test drive
y
Buyer books a test drive
Screenshot
The Consumer App

Example: Best way to buy
o p
Screenshot
The Consumer App

Example: Hassle-free ownership
t C
Browse cars with
a beautiful experience
N o Schedule your
test drive Browse cars with a lean experience (desktop)
Notification when it's time
for maintenance
Schedule your pick up and
your car's oil is changed for you
Keeping your car well-maintained allows
us to display an estimated real time value
Sell your car quickly &
easily when it comes time

s t
SOLS Systems •
Po
Dynamic, custom insoles engineered to change the way you move.
r
Founding team: Kegan Schouwenburg, Joel Wish
o
Funding round: Series B
Market category: medical devices; fashion; 3D printing
y
SOLS is an orthotics startup with a big vision: to revolu- know every job, but they do expect you to hire people who
tionize manufacturing. The deck is beautiful. We love their can. Doing this well will make or break your company,
p
use of imagery and negative space. Succinct, provocative your schedule, your culture, and ultimately, your success.
copy fills the center of the slides. We also like how they use No pressure. Do the best you can today, and do better
o
darkened images or faded images to fill the background. tomorrow.”
Common Mistakes Founders Make Redo
C
“Being self-critical. Raise the right amount of money for “My approach to forecasting, focusing more narrowly on
what you want to achieve. Too much, too soon can be just key performance indicators and less on vanity metrics and
t
as bad as too little, too late. Not realizing that ‘maybe’ al- hockey-stick growth. Market aside, a startup’s trajectory is
most always means no.” a direct reflection of the levers you pull, how hard you pull
o
them, and in what order.”
Advice
“Early-stage investing isn’t rational. It’s a mix of market Slide Investors Focused on Most
N
trends, relationships, adrenaline, and appetite for risk. No “Most often we talked through the deck without actually
matter how good your hockey stick looks, no one knows focusing or even looking at the slides. Very rarely did I find
if your startup will succeed or fail. Get comfortable being myself pitching in the traditional sense.”
o
uncomfortable, and take people on the journey. If you’re
doing your job, your startup will outpace you. It’s OK. This
doesn’t mean you’re getting fired. No one expects you to

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
10 meetings

$11.1 million
TIMING
7 months
py
First pitch deck
created
Closed the
financing round
o
June 2013 Nov. 2013
2013 2014
C
Idea conceived
May 2013
t
Started talking to
investors
June 2013
Company officially
launched
July 2013
INVESTORS
o
Number of investors
N
6 investors
Investor type
Angel
investors
33%
Primary locations
San
New York
City
o
Francisco
* Venture Dallas,
COMPANIES IN THIS BOOK capital firms TX
D

s t
Cover
Po Overview
r
!
S O L S I S T O 3 D P R I N T I N G W H AT
CLOUD COMPUTING WAS FOR
o
SERVERS. WE ARE BUILDING AN
I N F R A S T R U C T U R E T H AT S U P P O R T S
T H E C U S T O M I Z AT I O N O F U S .
py
o
Solution Market
PRODUCT AS A SERVICE ACROSS 300B+ IN APPLICATIONS
Our vertically integrated

hardware as software
model leverages digital
manufacturing + design to
enable rapid development of
physical goods
t C
Minimal set-up costs
Extensive
customization
Rapid iteration
SHIN
HELMETS M I L I TA R Y
FOOTWEAR
o
! GUARDS
HEARING
AIDS
Want to sell SOLS? Get our
software.
! Zero inventory HEAD
PHONES
ORTHOTICS
!
! Subscription vs. one- BRAS CLOTHING
N
!
! time transaction BRACES
!
!
!

s t
Solution
AND CUSTOMIZE
O U R S E LV E S
Po
Opportunity
WHY NOW?
Leather Cushion
or HIGH RES CAMERAS +

D I G I TA L I Z AT I O N O F
PRODUCTION
I N E V I TA B L E B U I LT I N
PRINTERS +
AWARENESS OF
3DP AND PUSH
F O R A P P L I C AT I O N S
M AT E R I A L G E T T I N G
CONSUMER
DEMAND FOR
y
SCANNING TECH ON
CHEAPER CUSTOM PRODUCTS
ON CELL PHONES
Elastic Nylon Base Custom, corrective body
Customer Quote
Ò SOLS have helped
o p Vision
C
me lead a more
active and healthy !
t
lifestyle.Ó
!
THE FUTURE
S TA R T S T O D AY.
N o !

s t
Tegu • Tegu is a magnetic wooden alternative to LEGO.
Po
r
Founding team: Will and Chris Haughey
Location: Darien, CT
o
Funding round: Series B
Market category: toys
y
Tegu is a toy company with a powerful story. Founders Redo
Will and Chris Haughey created Tegu to be a socially I would add a Use of Proceeds slide. I’d probably also add
p
driven company, focusing on job creation for the poor in a more robust competitive positioning slide so outsiders to
Honduras while also building a profitable business. As a the industry could understand it quickly.
o
result, they attracted a certain profile of investor who both
believed in their mission and the investment opportunity. Slide Investors Focused on Most
Like their magnetic wooden blocks, the Tegu deck strikes Investors don’t spend much time on slides, but if I had to
C
a perfect balance of beauty and utility. pick, it would be the financials. Investors often asked, “So,
how does this thing make money?”
t
Common Mistakes Founders Make
They spend too much time preparing information. In the
o
end, people invest in concepts and people that they trust.
It’s also easy to waste time with prospects who don’t really
have experience in investments of your risk profile.
Advice
N
Your goal is to get the person across the table to conclude
o
for themselves “this could be huge.” After that, it’s just the
details of how much they’ll commit. Plan for delays and
always be closing. Time kills deals.

s t
MEETINGS
250
Po AMOUNT RAISED
150
50
70 meetings
or $5 million
TIMING
7 years, 8 months
First pitch deck
created
py
Closed Series A
Interim close $2 million
(Series B)
o
Dec. 2008 May 2009 Oct. 2012
2006 2014
Idea conceived
May 2006
investors (Series A)
Jan. 2009
Company officially
launched
Aug. 2009
Started talking to
investors (Series B)
April 2012
Closed $3 million
(Series B)
Dec. 2013
INVESTORS
o
Number of investors
N 20 investors
Investor type
Friends and
family
30%
Angel
investors
40%
Primary locations
Chicago
St. Louis, MO
Westport, CT
New York City
London
D o *
Venture
capital firms
30%
Los Angeles
Colorado Springs, CO
Dallas-Fort Worth

s t
Cover
Po Company Overview
or
Company History
py Opportunity
C o
o t
N

s t
Milestones
Po Sales
or
Press
py Financials
C o
o t
N

s t
TreeHouse •
Po
Category-redefining home improvement company focused on home
design and performance.
Market category: home improvement; sustainability
r
Founding team: Evan Loomis, Jason Ballard, Kevin Graham, Paul Yanosy, Pete Ackerson, and Brian Williamson
o
The Whole Foods version of Home Depot. That was the
original pitch for TreeHouse when Loomis and his co-
founders were getting the venture off the ground. The
py capturing people’s imaginations faster. One point of con-

sistent feedback with this presentation was to ‘get to the
product’ faster. We had dedicated our first ten slides to
o
deck focuses on building the case for why residential and ‘trends,’ ‘opportunity,’ and the ‘industry overview.’ Inves-
commercial building is the next green revolution, and why tors got a little bored with the slow buildup.”
TreeHouse is the team to pull it off.
C
Common Mistakes Founders Make “Three slides dominated most of the conversation: (1) The
t
“Successful entrepreneurs raise friends first, not cash. To trends slide titled ‘Someone will do this’ generated most
say it another way, successful entrepreneurs don’t raise of the feedback from investors. It was easy to understand
o
cash at the expense of friendship. I’ve seen a lot of entre- since we stacked logos in the respective industry verti-
preneurs lose friendships, trust, and momentum because cals; (2) The opportunity slide titled ‘Elements of a green
they get this fundamental truth mixed up.” home are everywhere’ came in second. Investors felt that
N
this was a futuristic sneak peek into the future of home
Advice building; (3) The solution slide with the TreeHouse store-
“Read this book.” front generated lots of conversation as well. You could im-
o
mediately tell if investors appreciated the concept on this
Redo slide. They would either say ‘cool’ or shrug their shoul-
“We incorporated a lot of full-bleed imagery in our later ders in indifference.”
D investor presentations. I think pictures do a better job of
130 |
CREATE YOUR PITCH
8/23/15 7:08 AM
s t
MEETINGS
250
Po AMOUNT RAISED
150
50

200 meetings

$6.75 million
TIMING
5 years, 9 months
py First pitch deck

created
Closed the
financing round
o
May 2009 Feb. 2011
2006 2012
Idea conceived
Feb. 2006
t C Evan Loomis left job,

bootstrapped, and built
team and partners
Feb. 2009
Started talking to
investors
Sept. 2009
Company officially
launched
Oct. 2011
INVESTORS
o
Number of investors
N 25 investors
Investor type
Friends and
family
25%
Angel
investors
65%
Primary locations
New York
City
Washington,
DC
Hong
o
Kong
Austin,
Dallas,
* Venture San Antonio,
COMPANIES IN THIS BOOK capital firms TX
D

s t
Cover
Po Opportunity
SOMEONE WILL DO THIS

Residential and commercial building is the next green revolution.
TRENDS
r
GROCERY SPORTING HOME CARS APPAREL HOME
STORES GOODS FURNISHINGS IMPROVEMENT
TRADITIONAL
INVESTOR OVERVIEW
WINTER 2011
CONFIDENTIAL
y o GREEN
FOCUSED
Copyright 2010, TreeHouse L.P.

Opportunity
ELEMENTS OF A GREEN HOME ARE EVERYWHERE

SOLAR HOT WATER HEATER SOLAR PANELS
C INSULATION
o
SITUATION
Market
GREEN BUILDING IS THE FUTURE OF BUILDING

According to the National Association of Home Builders, about 50% of all remodeling new construction in
America will incorporate green features. Currently there is no one-stop retailer to supply them.
3
OPPORTUNITY
t
Cellulose and spray foam insulation
WATER NATURAL LIGHTING 1. LARGE AND NASCENT INDUSTRY 2. RESILIENT IN DOWN MARKETS
PURIFICATION Reduce lighting needs 70% of home buyers are inclined to buy green in a down market
(Source: MHC 2008).
o
3. ESTABLISHED STANDARDS
LIGHTING AIR MONITORING
Energy efficient and PURIFICATION
lighting to save
energy
4. NO TRUSTED EDUCATOR
N
HVAC WINDOWS
Efficient system to Energy efficient, low E Consumers remain confused by competing “green” noise.
reduce energy needs windows and glass
5. NO 1-STOP SHOP
Green Carpenters Solar Installers
Energy Auditors Green Builders
Boutique Green Stores Limited Selection at Big Box
PAINT & FINISHES RAIN SYSTEM Natural Landscaping Green Websites
No “VOC” for superior Install rain catching
o
air quality system to save on
water bill
6. OPEN COMPETITIVE ENVIRONMENT
Big boxes are not focused on the green consumer.
FLOORING SMART HOME OVERHANGS LANDSCAPING Existing market is highly fragmented, undercapitalized, and not

No “VOC” carpet and tile Thermostats 24” window overhangs Xeriscaping & native positioned for scale.
for superior air quality to reduce heat gain plants to reduce water
needs
D
4 Source: McGraw Hill Construction, Smart Market Report 2008. 5

s t
Solution
TREEHOUSE GREEN HOME IMPROVEMENT

Approachable, smart, sustainable, inspiring, and empowering.
SOLUTION
DE S IG N HIG HLIG HT S
LEED Gold Rating
Po Growth Plans
PROPOSED FUTURE STORE LOCATIONS

TreeHouse plans to grow rapidly over the next 5 years, becoming the premier retailer of green
building products in the greater Austin, Texas area and in strategic markets across the U.S. CB
Richard Ellis is partnering with TreeHouse to lock up prime locations.
ROLLOUT STRATEGY
r
Retrofit existing ~25,000
Store Growth Projections
sq. ft. structure
2011 2012 2013 2014 2015 2016
Solar array, entryway
arboretum, natural Store Growth 1 3 6 7 12 15
indoor lighting
Total Stores 1 4 10 17 29 44
o
Revenue ($ in mm) $7.0 $29.2 $75.6 $135.2 $236.6 $370.6
à Pop > 500k

à LOHAS customer
base
à Strong green
y
community
à Proximity to Whole
Foods, REI, and
Container Store
à Highly educated
p
à Strong city growth
à Open competitive
environment
à Large homeowner

base
o
Source: Overland Partners. 6 9
Partners Investment Highlights
C
PARTNERS INVESTMENT
STRATEGIC PARTNERS INVESTMENT HIGHLIGHTS
TreeHouse continues to attract nationally recognized strategic partners. TreeHouse is currently raising $5 million dollars to launch the flagship store in Austin, TX.
t
The green building industry represents one of the fastest growing sectors of the
STRATEGIC PARTNER SUPPLY CHAIN & LOGISTICS RETAIL PROPERTY MULTI-BILLION MARKET
national economy. The U.S. market for green building products is expected to
DEVELOPMENT OPPORTUNITY
surpass $80 billion by 2013.
EXPERIENCED Management team has over 35 years in home building retail, 100+ stores opened,
MANAGEMENT TEAM and deep industry relationships .
o
ARCHITECTURE & DESIGN REAL ESTATE ADVISORY BRANDING, MARKETING, Real Estate: TreeHouse partnered with CB Richard Ellis to lock down prime real
DEFENSIBLE BUSINESS
AND IN-STORE SIGNAGE estate locations across the U.S. Merchandise: Secured exclusive and private label
MODEL
products with key suppliers.
DISCOUNTED CONTRACTS McGarrah Jesse (equity partner), Overland (equity partner), Wilson Sonsini (equity
WITH PARTNERS partner)
N
SOURCING & PRODUCTS PEOPLE LANDSCAPING + NURSERY
Initial Seed Round was 1.5x oversubscribed. World class angels included founders
WORLD CLASS INVESTORS
of Container Store, AES, and several C-level executives.
EXPERIENCED INDUSTRY Twelve member advisory board includes leaders of USGBC, former Mayor of
ADVISORS Austin, former board-member of Whole Foods, and many others.
LEGAL ADVISORY BANKING + TREASURY ACCOUNTING + TAX
CRITICAL STRATEGIC Over 300+ suppliers relationships, and existing alliances with Austin Energy,
ALLIANCES IN AUSTIN Ladybird Johnson Wildflower Center, CEVA Logistics, CBRE, and Frost Bank.
o
VALUABLE BRAND IP AND
STRATEGIC PARTNER INVENTORY, E-COMMERCE, STRATEGIC PARTNER Significant investment in TreeHouse Brand development, including extensive
PLATFORM FOR
CRM, AND ACCOUNTING research, multiple focus groups, messaging, and proprietary green product filter.
EXPANSION

TreeHouse hopes to secure one of the most highly trafficked retail locations
LOCATION (~350,000 cars per day) in Austin with neighbors that include: Central Market and
Whole Earth Provision.
D
14 15

s t
Po
or
py
C o
o t
N
D o

s t
7 Po
o r
Pitching Exercises
p y This chapter brings together the best in experiential learning on pitching. It outlines several ex-
o
ercises—some easy, some bizarre—that entrepreneurs have used to turn their mediocre pitch-
ing into confident, powerful, cash-earning pitches. The goal with each of these exercises is
to build your pitch muscle, to help you get over yourself, to become more comfortable telling
C
your story, and to identify the style of pitching that resonates for your particular venture and
personality.
t
Be warned, many of these exercises will feel awkward. Embrace the awkwardness. These
exercises are what the best of the best use to teach the art of pitching.
N o Pitching Exercises:
• The Techstars Jedi Mind Trick

• The d.school Pitch Frameworks
• The Dry Run
D o • The Spy Dry Run
| 135

s t
The Techstars
Jedi Mind Trick
Po leaving an obvious gap for the other participant in the
conversation to step into.
r
In the words of East Coast investor Walt Winshall,
“Don’t steal their line.”
From Jason Seats, Partner at Techstars
How long does it take? Five minutes
y o Entrepreneur: “I’m going to tell you the elevator

pitch of the venture I’m working on, and afterward
I want you to ask me the first question that pops into
your head. Sound good?”
p
Who do you need? You and one person who doesn’t know
Listener: “I guess so.”
anything about your venture
o
[Entrepreneur gives pitch.]
You’ve got twenty words. With those words, can you get
[Listener asks the first question that comes to him.]
someone to ask you the question you want to be asked
C
about your venture?
Afterward, reflect on the following:
To play the game, find someone who knows nothing
t
about your venture to play with you. Then, tell the person
1. Was that the question you expected to hear?
your elevator pitch. As soon as you are done, ask the per-
What did you want to hear?
o
son, “What’s the first question that comes to your mind?”
You may be surprised by what you hear. Jason talks 2. What does that question tell you about what the
about his experience playing this game with Techstars listener understands about your venture?
N
companies:
3. What changes can you make to your pitch to set up
the kind of conversation you want to have?
The entrepreneurs may not know what question they
o
wanted them to ask, but they sure know that wasn’t it.
“That question tells me they think we’re in a completely
different industry.” It’s about leaving the right holes,

s t
The d.school Pitch
Frameworks
Po 1. The One-Word Pitch
If you could only use one word to describe what you
r
want others to know, do, and feel about your venture,
what would it be?
From the LaunchPad, d.school,

Stanford University
How long does it take? Thirty minutes
y o Green-building
2. The Pixar Pitch

Originally presented by Pixar storyboard artist Emma
p
Coats, this framework fits every single Pixar movie made
Who do you need? Just you
and, arguably, every story ever made.
With the bold claim of being able to take startup founders

from idea to revenue in ten weeks, the LaunchPad program
C
at the Institute of Design at Stanford University (known as
the d.school) is a perfect place to search for transformative
o Once upon a time there was ____________________________ .
Every day, ________________________________________________ .
One day ________________________________
____________________ .
t
experiences. And when it comes to pitching, the school
Because of that, ________________________
_ __________________ .
doesn’t disappoint. One of the key philosophies of the d.
o
school is to use forms of play to overcome fear and unleash Because of that, ___________________________________________ .
creativity. If you are having trouble telling your story in Until finally _________________________
____
_ __________________ .
a unique way, or if you get gripped by a sinking feeling
N
whenever you think about giving your pitch, this exercise
Once upon a time, there was a thriving industry for
is for you. Here are eight pitch frameworks, playful ways to
do-it-yourself home improvement.
tell and retell your pitch.
o
For each framework, we use the example of Loomis’s Every day, homeowners and contractors used stores
venture, TreeHouse, to show you how it works. like Home Depot and Lowe’s to renovate and maintain
their homes.
D Pitching Exercises | 137

s t
One day, people began to become more conscious of
their environmental impact.
Because of that, they began to seek out sustainable
Po homeowners are more educated and empowered to

build sustainably.
alternatives for things they were already buying. For

food, they went to Whole Foods. For clothes, they
shopped at stores like Patagonia.
Because of that, people began to look for sustainable

or 4. The Beaming Review Pitch
A customer just rated your product five stars on the App
Store/Amazon/Yelp. What does the fifty-word blurb that
y
alternatives for home improvement. she wrote say?
Until finally, TreeHouse created the first sustainable
p
Bar none the best place to buy DIY. If Lowe’s and
home improvement store.
Whole Foods had a baby, it would be TreeHouse. If
o
you care about the environment, your family, or home
improvement then you should consider stopping by.
3. The Obituary Pitch Don’t trust me; come and see for yourself. You won’t
C
Morbid but powerful. Imagine it’s seventy years from now. be disappointed.
You just died. The Wall Street Journal opens your obituary
t
describing your company and its legacy and contribution.
What does it say?
5. The Proud Grandparent Pitch
N o
When Evan left his job in investment banking, he had
no idea that the venture he would help start would
change the culture of the home-building industry
in America. TreeHouse, the first sustainable home-
improvement store, marked a shift in how Americans
What would your technologically illiterate grandma say
if she were bragging about your company? Keep in mind,
her bridge friends probably don’t care about the technical
details. What do they care about?
o
renovated and maintained their homes—eventually The people are so sweet and nice at TreeHouse! Just
rivaling the big players in the industry, Home Depot the most well-mannered and polite bunch of young
and Lowe’s. Today, in large part due to TreeHouse, folks you’ll ever meet in your life.

s t
6. The Three-Act Play in Three Sentences
Write a three-sentence pitch in the style of a three-act play.
Po 8. The Drunk Hemingway Pitch

The d.school team got this idea from the movie Midnight
r
in Paris, in which a nostalgic writer finds himself on the
ACT I: Introduce hero. streets of Paris in the twenties and runs into the Lost Gen-
o
eration—Hemingway, Fitzgerald, and a host of the other fa-
ACT II: Get hero in trouble.
mous expatriates living in France at the time. In the movie,
ACT III: Get hero out of trouble. Hemingway talks about his work:
ACT 1: You care about the environment. You care

about your home. And you love DIY.
py You liked my book? Yes, it was a good book because it

was an honest book. And that’s what war does to men.
There’s nothing fine and noble about dying in the mud.
o
ACT 2: You just bought an old house. Uh-oh. There’s Unless you die gracefully. And then it’s not only noble
so much to renovate, but how can you make sure what but brave.
you buy matches your values?
C
(Google it.) Borrow the style for your pitch.
ACT 3: That’s when you discover TreeHouse, the first
sustainable home improvement store. What a life
t
It is a good __________ because it is a ________ _________ .
saver!
There’s nothing _________ and _________ about __________ ,
o
unless you __________ . And then, it’s not only __________
7. The Haiku Pitch but __________ .
Pitching your venture
N
It is a good home improvement store because it is a
with seventeen syllables
smart home improvement store. There’s nothing fun
can be fun. Try it.
and exciting about housework, unless you are build-
o
Green-building made fun ing a home you love. And then, it’s not only fun but
Education, great service beautiful.
Smart home improvement
D Pitching Exercises | 139

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The Dry Run
Po into the office? What do you say? How do you set up your
laptop? Do you make small talk first or launch straight into
the presentation? What happens when you are finished?
How long does it take? Ten to thirty minutes
Who do you need? One to three friendly faces
There is no substitute for simply giving the pitch. No mat-

or A Coffee Shop Pitch
Ask a friend to meet you for coffee so you can give her
your pitch to play as if she were an angel investor you were
y
ter how many times you look through and revise your deck meeting for the first time. Again, start the dry run from the
or talk through your pitch in your head, you won’t really moment you walk in the coffee shop. Are you early? How
p
know how you perform in the field until you get out there early? Who buys the coffee? What makes this experience
and do it. Ask a few people who know and love you to fill in different from a more formal pitch?
o
as your audience, and pitch just as you would to an inves-
tor. Ask one of them to video record you (just use a phone;
no need to get fancy), so you can watch it afterward and de-
With the Deck/Without the Deck
C
brief how it went. Once you start to pitch, give no prefaces You need to be prepared to give your presentation with and
or qualifications; don’t break character. The more lifelike without the deck. Baehr once went to pitch a very wealthy
t
your practice is, the more comfortable you will be during man in Colorado; he arrived with his laptop and PDF ready
the real thing. You will be surprised how many small de- to pitch and found himself sitting on an overstuffed leather
o
tails come up during the practice that you never would couch in a room that resembled a country club. The inves-
have thought of otherwise. tor walked in and said, “Tell me what you are working on.”
Here are a few possible variations on the dry run. Even if you are meeting a venture capitalist at their office,
N
they may have read the deck already and merely ask for a
quick overview.
A Formal Pitch Presentation
o
Give the pitch as you would to a group of partners at a ven-
ture capital firm. Start the dry run from the moment you
enter the building. Who do you first greet when you walk

s t
The Spy Dry Run
Po Questions Investors Should Be
Asking Themselves
r
• What is this person’s body language like?
How long does it take? Thirty minutes
• Why would I not invest?
o
Who do you need? An angel/high-net-worth individual
you know well • What gets me excited about this opportunity?
y
This exercise is designed specifically for accelerators and
other entrepreneurship training and education organiza-
p
tions. Despite all the practice, it can still be very difficult to
know how your entrepreneurs are doing in the real world.
o
To get that kind of data, you’ll need to ask an investor
in your network to have a meeting with an entrepreneur
solely for the purpose of seeing how he or she behaves. The
C
entrepreneur shouldn’t know that the meeting is a practice
run—as far as he or she is concerned, this is as real as it
t
gets. And, to be fair, it should be as real as it gets; the en-
trepreneur just doesn’t know the investor is going to be
o
debriefing with you afterward. Ask the investor to be as
honest as possible in the critique. It is a good idea to do
this with more than one investor, so you can overcome bias
N
in any one investor and begin to see patterns.
D o Pitching Exercises | 141

s t
Po
or
py
C o
o t
N
D o

s t
Po Part
Two
or
GET
y
p
BACKED
o
t C
N o
D o

s t
Fundraising is a process of
acquiring capital only in the most
Po
r
basic sense. In the truest sense,
it is a process of finding a partner
who is going to be with you
through building a company for
longer than many people are with
y o
their spouses.
—Chi-Hua Chien, venture capitalist,
Goodwater Capital, investor in Twitter,
o p
C
Facebook, and Spotify
o t
N
D o

s t
8 P o
o r
A Primer on Startup
Financing y
o p This chapter focuses on the basics of startup financing—the different mechanisms for raising
C
money, the how and why of funding rounds, and the purpose of financing agreements. It’s
designed to give first-time founders an introduction to the language of financing, so you can
t
move on to the much more difficult skill of building relationships. If phrases like “pre-money
valuation” and “convertible note” scare the hell out of you, you are in the right place. Don’t get
o
too caught up in trying to understand the ins and outs of startup financing, though. Most of
the investors we know are much more interested in finding entrepreneurs they believe in and
want to work with than they are in negotiating the best possible deal.
N Key Elements:
• The four ways to raise money
D o • How funding rounds work

• Understanding equity financing agreements
| 145

s t
The Four Ways to Raise Money
Po
r
At the most basic level, all ventures raise cash through one or more of these four mechanisms.
Create It through Profits

Creating cash through profits is what businesses are de-
signed to do. Businesses are “value creating” machines,
and cash is simply an agreed-upon amount of stored value.
y o Borrow It through Debt

Borrowing cash is another word for debt. With debt, you
pay someone a monthly “rental fee” called interest in ex-
change for access to their cash. However, institutions that
p
One option for getting the cash you need would be to lend cash like to have assurances that you are going to pay
use the venture itself, or another venture, to create cash that cash back. They often require some sort of collateral,
o
through selling a product or service. In other words, you like a factory or a big piece of machinery, so that if you
sell some products for more than it cost you to make them, can’t pay back the cash, they can take your factory instead
then take the profit and use it to make and sell more prod- and sell it to get the cash.
C
ucts. You could also sell a service like consulting and use Borrowing cash through debt is more expensive than
the profits from that service to build your business. People creating it, because you have to pay the interest (rental fee)
t
call this “bootstrapping.” It is by far the cheapest form of each month, and it’s also risky to you, because if you can’t
getting cash. It can also be very slow. Many businesses fi- afford to pay back the money or the interest on time, the
o
nance their growth through this method. person who lent you money can bring you into bankruptcy.
Where does it come from? Where does it come from?
N
• Revenues – Expenses = Profits • Investment banks
• Commercial banks
D o 146 | GET BACKED

• Savings and loans
• Lending platforms like Able

s t
Po
Buy It through Selling Equity
Another way of raising money is to buy the cash by selling
or Get People to Donate It
There’s one other way to raise money for your venture:
y
the most valuable thing you have: ownership of your ven- ask people to just give it to you. Institutions have donated
ture and the future profits it might create. You hope your money to ventures in the form of grants for years. Today,
p
venture is going to be worth a lot of money, and anyone who ventures use donor-based crowdfunding platforms to raise
owns a piece will have a claim to all that money. By selling small amounts of cash from many customers and fans in
o
equity to investors, you offer them a stake in the business—a exchange for rewards, such as a discount on the first run
percentage of ownership that you all agree on. Selling eq- of a product or high levels of service. For startups with
uity is typically thought of as the most expensive option for strong, aspirational branding, consumer products, and/or
C
funding a venture, because if the venture does well, you end extremely motivated customers, this can be a great source
up giving away a bunch of money you could have had your- of cash.
t
self. However, that’s only if the venture would have been just
as successful without selling that equity. If you have to move Where does it come from?
o
fast or if you have investors that bring more than just money,
• Kickstarter
selling equity can be a key part of the business’s success.
• Indiegogo
N
Where does it come from?
• Crowdfunder
• Private equity
o
• Hedge funds
• Venture capital
D • Angel investors
A Primer on Startup Financing | 147
8/23/15 7:08 AM
s t
How Funding
Rounds Work*
Po this new group of investors, our founders have entered the
Series A round of funding.
Since we’re making things up, let’s say everything goes
r
exactly as planned. Now, the startup has grown into a
profitable or soon-to-be-profitable company. The founders
o
Say a couple of scrappy and innovative founders come decide they need even more money to take the company
up with a brilliant new idea. In order to work on this idea, to scale, say, $10 million. With this amount of money, they
those founders decide to raise a small amount of cash from can’t play around. They decide to go after institutional
y
their friends and family, say, $250,000. In startup-speak, funding called venture capital (VC). VC firms are startups
we would say this startup is in the seed stage. This is their themselves; a founder raises money from high-net-worth
p
first funding round—the first time they take on debt or eq- investors like family investment offices, pension funds,
uity to grow the venture. They use this money to live on and insurance companies and uses that money to invest
o
and build a prototype. in startups that will earn the investors a high return. With
Then, six months to a year later, those same founders this funding, the venture has entered the growth stage and
will hit a point where they will need to raise more money, raised a Series B.
C
probably to hire more people and build a minimum viable This process continues, with more and more money
product (the crappiest version of the product a customer being raised from bigger and bigger sources, all the way
t
is still willing to pay for). This time, they need more cash until the company makes an initial public offering and
than their rich uncle can afford, maybe somewhere around goes public or is acquired by a bigger corporation.
o
$2.5 million. So, they decide to look to the local rich people Let’s sum up our mythical company’s journey:
in their area who invest in startups. These people, called
angels, are often successful entrepreneurs themselves Series seed round. Friends and family ($250,000)
N
and either invest alone or band together with others in the
Series A round. Angel investors ($2.5 million)
area to form angel groups that help carry the load of find-
ing and filtering startups that are good investments. With Series B round. Venture capital ($10 million)
D o *Paul Graham has done an excellent narration of the way startups move
through funding rounds; our scenario is inspired by his. See
http://www.paulgraham.com/startupfunding.html.
148 | GET BACKED

That is the story of how funding rounds work. Raise a
little money from one group of investors, make progress,
and then raise more money from more investors. Paul

s t
Graham, founder of the accelerator Y Combinator, com-
pares funding rounds to shifting into the right gear. Like
a bicycle or car, a venture-backed company moves through
Po Understanding
Equity Financing
r
several gears, or rounds, of funding as it grows. Each of
these rounds gives the venture a boost of cash that allows
Agreements
o
it to move at an increasingly fast speed. The right kind and
amount of funding will move your venture at exactly the
right speed, moving the venture fast enough to take advan- Any time a founder sells a stake in his company in ex-
y
tage of the opportunity before it but not so fast that you lose change for cash, he enters into a legal agreement with
control and can’t make changes as you grow. whoever gave him that cash. According to Brad Feld and
p
Jason Mendelson in their book Venture Deals, that legal
agreement is designed to decide two primary things:
C o 1. Economics. How the ownership pie gets divided

up when the startup is acquired or goes bankrupt
(in other words, who gets what, when).
2. Control. Who has the power to decide what hap-
o t pens in the business (in other words, who decides

what, when).
Investors use a lot of different mechanisms in an agree-

ment to make sure they get the kind of economics and con-
N
trol they want. All the different mechanisms and terms can
quickly get confusing. As a founder, your challenge is to
decipher the language of investing into what it means for
o
you, your venture, and your stake in it—if the business does
very well, if the business does very badly, and everything
else in between. We include descriptions of the most im-
D
portant terms here.
A Primer on Startup Financing | 149
8/23/15 7:08 AM
s t
Price
Price is the amount investors are paying for an equity stake
Po Liquidation Preference
Liquidation preference is a way for investors to protect their
r
and what percentage of the venture they get. A correlated investment if the venture doesn’t do well. They do this by
term is valuation—the total value of the venture based on asking for a multiple of their original investment, two times
o
the price the investors paid for their shares. Investors look or three times, for instance, when the business is acquired or
at the issue of price in two different ways. liquidated. This way, if there isn’t enough cash to go around,
investors get their money back (and then some) first.
y
• Pre-money valuation. How much the company is In addition, investors may ask to “participate” as well,
worth before cash is put into it by investors. meaning that after they’ve received the multiple of their
p
investment back, they still get their percentage of what-
• Post-money valuation. How much the company is
ever money is left.
worth after cash is put into it by investors.
This pre-money, post-money thing can get tricky. Pay

close attention to which you are talking about during ne-
C
gotiations. You may see other terms related to price on a
term sheet; they all come down to the same two things: the
o Vesting
Vesting is dividing up the total amount of equity a founder
or employee gets over time, so that people who leave the
t
venture early don’t get rewarded as much as someone who
amount of cash that is being invested and how much of the
sticks with it. A typical vesting agreement, or schedule,
company that cash gets the investor. Here are some other
o
says that founders or employees will earn their shares over
ways to present price:
a four-year period, gaining ¼8 of their shares every month.
• Price per share Usually, there is also a stipulation that they must be with
N
the venture for a full year before they get anything. This
• Percentage of ownership position one-year rule is referred to as a “one-year cliff.”
• Total invested (aggregate)

Not-Quite-Equity Agreements
There is one other thing we should mention about early-
stage financing agreements. Often, very-early-stage compa-

s t
nies will raise money but want to avoid a valuation—having
a price set on how much the venture is worth. They do
this because it is too early to decide in any rational way
Po
r
how much the company is worth. In these scenarios, the
founders may want to raise money through a convertible
o
note—an equity agreement that starts out as debt and then
automatically converts into equity the next time the venture
raises money. In exchange, the investor can negotiate a dis-
y
count on the future shares his money will buy. At the end of
the day, the basic goals of the agreement don’t change—you
p
are still making decisions about who gets what when and
who decides what when—but the terms for convertible notes
o
are different.
t C
N o
D o A Primer on Startup Financing | 151

s t
Po
or
py
C o
o t
N
D o

s t
9 Po
Overview of o
r
y
Funding Sources
p
C o Who invests in startups? Five funding sources make up the vast majority of where startups
get money. Each source differs in how much money it invests, at which stages it invests, and
in what it brings to the table in addition to funding.
o t Key Elements:
• Friends and family

• Crowdfunding
N • Accelerators
• Angel investors
D o • Venture capital firms
| 153

s t
The Five Funding Sources
Po
$100 million
or
py Venture Capital
How much
do you
need?
$1 million
C Angel Investors
and Angel Groups
o
$100,000
o t
Crowdfunding,
Friends
N
and Family
Accelerators

Seed stage Early stage
What stage are you in?

Growth stage Late stage

s t
Friends and Family
Po you don’t want to ask for more than 5 percent of someone’s
net worth, ideally much less.
r
At a Glance Pros Cons
o
How much? $5,000–$100,000 Compared to other forms, These people are your
can be very easy to get. family and friends. Many
When? Seed stage relationships have been
y
hurt by deals gone wrong.
A scrappy, talented guy decides to go out on his own to You should be very aware of
p
launch or buy a business. Without a huge network of the risks to family money.
seasoned “finance” people, he turns to the most busi-
Capital comes faster. Typically, they don’t provide
o
ness-minded and/or wealthy people he knows: a rich uncle,
the family doctor, the neighbor who found out his ranch sat that much capital.
on a few million dollars of shale oil. That’s the typical story Leverages the trust you’ve Some investors are deterred
C
of finding “friends and family” investors. already built. by messy investor groups,
According to one study, 82 percent of all funding for so don’t invite too many
t
startups in 2012 came from friends and family of the family members.
founders. As a group, it is the largest funding target
Typically, more patient. Not sophisticated.
o
in the United States (and probably the world). In 2011,
friends and family invested a total $50 billion, far more Better terms. May hurt future rounds of
in total money invested than venture capital and angel capital.
N
investment combined.
If you plan to take money from friends and family, make
sure you are up front and honest about the risks associated Notable Friends and Family
o
with the venture. The reality is, most startups fail, and they
• The rich relative • The corporate exec
need to know they could lose all their money. If losing their
at church
investment would significantly hurt the family member’s • Doctors and lawyers
D or friend’s finances, don’t do the deal. As a rule of thumb,
• High school friend
Overview of Funding Sources | 155
8/23/15 7:08 AM
s t
Crowdfunding
Po Crowdfunding platforms can do a lot more than just
raise capital. Entrepreneurs use them as marketing tools,
to validate a prototype or concept, to collect presales, and
r
At a Glance to test things like pricing and messaging.
o
How much? $5,000–$100,000 Pros Cons
When? Seed stage, early stage
With rewards-based Everybody sees it. You may
y
platforms, you don’t have not get enough traction on
Crowdfunding is a very different and potentially disrup-
to give up equity. the site, which looks bad
tive form of startup fundraising that involves many inves-
p
if the funding campaign
tors pooling small amounts of cash to fund a venture or
didn’t pan out.
some aspect of it. Crowdfunding can be divided into two
categories:
• Rewards-based. People act as “patrons” instead
C
of investors, giving cash in exchange for different
levels of rewards. In some cases, those rewards are
o Offers you immediate
feedback on the viability
of your idea; bad ideas
don’t get funding.
Donors can be impatient
and may complain if you
don’t deliver rewards on
time and as promised.
t
Creates word-of-mouth Competitors see what you
presales of the product. This is what most people
advertising. are doing, which may incite
think of when they think of crowdfunding. Examples
o
copycats.
include the platforms Indiegogo and Kickstarter.
Creates a built-in customer base
• Equity-based. People make actual investments
N
of people who liked your business
in exchange for equity in a venture. In the past,
enough to invest in it.
equity-based crowdfunding platforms could legally
accept only accredited (read: rich) investors. With
o
the new SEC rules that came out through the JOBS Notable Crowdfunding Platforms
Act in March 2015, equity-based crowdfunding now
• Kickstarter • CircleUp
extends to almost anyone. Examples include the
D 156
platforms CircleUp and Crowdfunder.
| GET BACKED
• Indiegogo • Crowdfunder

s t
Accelerators
Po Pros
Increase the likelihood

Cons
Not a great option if you
r
At a Glance of raising money. need lots of cash quickly.
How much? $5,000–$50,000 Relational capital is very The good ones can be
When? Seed stage, early stage
They’ve been called the MBA for entrepreneurs. For ear-

ly-stage, prefunded companies, these organizations can
y o helpful to get intros and

feedback on your venture.
Creates word-of-mouth
advertising and PR.
extremely selective.
Time consuming and

potentially distracting due
p
take your good idea and put it on steroids. to all the meetings.
Accelerators are more often runways to funding rather Training and increased They can be expensive;
o
than sources of funding themselves. Admission to one can business skills. many require that you give
get you access to capital, idea refinement, developers, co- up a high percentage of
working space, and validation. Billion-dollar companies equity for a small amount of
C
have been birthed from accelerators, including Airbnb and
Dropbox. Many accelerators also give you access to inves-
t
tors, vendors, suppliers, and potentially other cofounders.
Companies typically have to give up a small slice of equity
Peer advice and support
through cohort companies.
cash.
Tons of advice can be

confusing (five different
o
in return for the network the accelerator provides. mentors can have five
Be aware that entrance into an accelerator comes with a different pieces of advice).
particular set of relationships, capital sources, and brand,
N
so choose wisely. As the number of accelerators increases,
the quality of the programs and the deals coming out of
them will decrease. As a result, more accelerators are spe-
Notable Accelerators
• Y Combinator • 500 Startups
D o cializing in specific verticals. • Techstars • Seedcamp

s t
Angel Investors
Po Pros
Angels often invest in

Cons
Some angels may not
r
spaces they have an be well respected.
At a Glance
expertise in and Entrepreneurs should ask
o
understand. the same questions
How much? $150,000–$500,000
investors ask themselves:
When? Seed stage, early stage Do I like you, do I trust you,
y
do I want to do business
Angel investors are rich people who professionally in- with you?
p
vest their own money into early-stage companies. Some
Some angels may even They get involved, which
of the best businesses of the last thirty years started out
work in the same industry may not be a good thing.
o
with investments from angels, including Google, Yahoo,
as you. This is categorically
Amazon, Starbucks, Facebook, Costco, and PayPal. An
“smart money,” and other
angel’s investment tends to be quicker and more personal
angels love to follow these
C
than investments from venture capital firms. One of the
types of investors.
TreeHouse investors put $50,000 in the company without
t
ever meeting Loomis in person because he worked in the They can introduce you to You’ll need lots of them to
home improvement space and liked the concept. The first lots of other investors, raise enough money, which
o
Outbox meeting yielded a $100,000 investment from a suppliers, and other can be like herding cats.
technology angel investor. Many angels are entrepreneurs relationships.
themselves. There are also angels who are former or cur-
N
If they get in on the first Many angels don’t bring
rent corporate leaders and business professionals.
round and like what they anything to the table other
see, then they may save you than money.
the hassle of doing another

road show for your second
round of financing.

s t
Notable Angel Investors
• Peter Thiel • Dave McClure
Po DEEP DIVE
AngelList
• Mike Maples • Naval Ravikant
or Overview
y
At a basic level, AngelList is the LinkedIn for startups—a
directory for finding and researching great startups. Many
p
of the biggest seed venture capital firms and angel inves-
tors are on the list, and many use it to help them source and
o
validate deals. But AngelList is also a crowdfunding plat-
form, a way for startups and investors not only to connect
with each other but also to actually raise money through
C
what AngelList calls syndicates. Most startups that are on
the list and do well raising money with AngelList are in
t
their seed or A round.
o
AngelList as a Directory for Startups and Investors
Even if you aren’t likely to raise money on AngelList, it
N
may be worth creating a profile there for both you and your
company. Follow people who you find interesting; do due
diligence on your competition. Search for great designers
o
and engineers to hire.
(continued on following page)
D
8/23/15 7:08 AM
s t
Raising Money on AngelList
Posting your profile to AngelList is very easy, but that
Po already done. If you already have some major sup-

porters, lots of additional people will be interested in
taking part in something someone else has already
r
doesn’t mean it is easy to raise money through it. Many done the homework on. Also important is the quality
founders are tempted to bet on a build-it-and-they-will- of those investors. The more well known they are
come strategy with AngelList: get your profile out there
o
and the larger their followings on AngelList, the
and then sit back and wait for some rich billionaire to better.
reach out wondering how you came up with such a brilliant
y
idea and where he can send the money. This is the lottery • Know what kind of money you are trying to raise.
scenario. The vast majority of ventures on AngelList raise AngelList helps you raise money in two ways. First,
p
no money at all. Those that do pay attention to how the it helps provide introductions to larger investors,
round dynamics and momentum affect their strategies. If including traditional VC firms. When these seed
you plan to try to raise money on AngelList, here’s what
o
firms ask for an introduction or reach out to you
you should pay attention to: on AngelList, they are beginning a conversation
that will likely evolve in the same way it normally
C
• Connect every influential person you can to your pro- would outside of AngelList. You probably start with
file in any way possible. You can list people as infor- a phone call, maybe followed by a meeting in per-
t
mal advisers, employees, even as customers, and ask son. If someone chooses to invest, it will feel just
them to give you a testimonial. The more people who like a traditional round—lawyers putting together
o
are connected to your profile, the more people who documentation, wire transfers, and so on. The other
will see your profile when you raise money. You want mechanism that AngelList has created for investing
to make your company look as if you have a really is called syndicates. Syndicates are ways for angel
N
great set of friends and supporters. investors to pool together much smaller invest-
ments, $1,000–$10,000, and co-invest it in a venture.
• Raise before you raise. The most ideal time to post In a syndicate, a group of angels precommit capital
o
on AngelList is after you have already raised at least that is unlocked every time the syndicate’s lead
a third, if not half, of the total amount of the money angel invests in a startup. With syndicates, Angel-
you want to raise. Most investors are likely to rely List handles the logistics of the actual financing,
D 160
on the due diligence that other lead investors have
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including validating that an investor is accredited

s t
and handling the transfer of money. AngelList takes
5 percent of each deal done in the platform.
Po 2. We wanted to find a way to engage dozens, maybe

even hundreds, of people in our future success as a
company. In that sense, AngelList was, for us, a way
r
Why You Would Raise Money from a Syndicate to connect with different kinds of investors. Given
that they are investing significantly less money,
o
While a traditional seed firm may invest $500,000, a seed there will obviously be significantly more people
investor on AngelList may invest only $5,000. Thus, for involved in your round.
your round, you may have dozens of small investors come
y
together to form a pool of $500,000. If your company is the We were advised that we should have lined up a
kind that needs lots of support, maybe launching in differ- major institutional investor and 50 percent of the cap-
p
ent geographical markets, getting the word out, or sending ital before we posted to AngelList. When we actually
you business, AngelList presents a way for you to engage a posted on AngelList, we published that we had already
o
special kind of fan—the investor fan. closed $2.5 million of the total $4 million round. Over
the following week, we received introductions and of-
Venture Spotlight: Outbox fers for an additional $8 million. In the end, we ended
C
up closing $2.5 million from investors through Angel-
For Baehr’s first venture, Outbox, he chose to raise money List. About $2 million of that came from only a handful
t
through AngelList. At the time, he closed the second-largest of people who were actually institutional investors and
amount ever raised on the platform. Here’s his story. had their own funds. The other $500,000 came from
o
about forty individuals who were bundled through the
We were interested in raising a Series A and knew we’d AngelList invest online product. This gave Outbox an
likely have one lead institutional investor. We decided added fifty people who were rooting for our success
N
to raise money alongside our traditional investor from and wanted to be helpful however they could.
AngelList for two reasons:
o
1. We wanted to see if we could raise an additional
million or two to increase the overall size of our
round beyond what the lead institutional investors
D
had planned to do.
8/23/15 7:08 AM
s t
DEEP DIVE
Anatomy of an AngelList Profile Po

Clean logo
or People will
see this when
they browse
y
through the list
1,669 followers of startups, so
is absurdly keep it short
p
high. and make it
memorable.
A demo video
o
is best. If you Search tags
don’t have one, help others
use photos of discover your
C
your product. venture. They
You have are worth
the option of adding.
t
adding multiple
visuals in a This is where
carousel here. investors
o
would see your
The tweetable fundraising
version of info.
your slides
N
and other
beautiful words
about how
amazing your
o
product and
company is.
D 162
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t
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Able is financial technology company that serves the Fortune 5 Million – the 5 million small businesses in B LOG P OS T Our Culture Credo:
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We solve this problem with a novel loan structure. At Able we make 1- to 5-year term loans up to
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Able. Collaborative credit.
Most bios answer
nerdwallet.com
the questions:
P R ES S
Small Business Success Story:

Where did you FOUNDERS Raven + Lily Changes Lives With
y
Able Lending
study? Who have
7 May 2015 All Press ▸
you worked with? Evan Baehr Will Davis
What do you call Cofounder, @able. Product, Founder @Able Lending. Graduate of Published
p
Marketing, Design. Worked at @HBS. Policy advisor @CapitolHill. I
yourself? They are @Facebook @Clarium. Grad of know just enough about enough to
C OM M EN T David Williams
articles are
@HBS, @Yale MA, @Princeton know I'm not enough.
all about social Smart team pursuing and big idea. good credibility
proof—using builders.
o
2 Jul 2013 All Comments ▸
some institution’s TRACTION

credibility that These sections
you’ve been a matter more than
C
part of to give you CUSTOMERS any other part
credibility. Other Raven and Lily of your profile.
Customer
things you can Empowering Women
Who believes in
t
or should add to Through Design what you’re doing
your profile: your enough to be a
role in the venture; part of it?
o
FUNDING
one defining
accomplishment; You can also add
results of work in INVESTORS from previous rounds advisers to your
dollars. profile.
N
Mike Stachowiak Nick Ducoff Joshua Baer
Entrepreneur, Technologist, Investor Ò Please, please kill postal
Investor. VP New Ventures mail.
Co-founder/CTO of @MyVR; @Northeastern | @Techstars
Co-founder/CTO of @Lift mentor Past VP @Boundless
Media (acquired); Co- acq by @Valore Books |
founder @4INFO. @Y CEO @Infochimps acq by
o
Combinator CSC (NYSE:CSC) |
@Andrews Kurth
Brett Jackson Mike Maples Peter Lehrman

Investor Managing Partner, Founder/CEO of @Axial
Entrepreneur and early @Floodgate • Example (First Round); @Gerson
D
stage investor. investments include Lehrman Group alum
@Twitter, @Digg, (Bessemer / Silver Lake);
@Solarwinds, @Chegg, @Stanford / @UVA alum.
@Demandforce, Aggregate
Knowledge, @Ngmoco,
@Smule, and Spiceworks
View all 87 Past Investors
TEAM

s t
Venture Capital Firms
Po Pros
Social proof. Raising

Cons
They have the leverage to
r
funds from a well- drive down your valuation.
At a Glance
respected VC firm is
o
a powerful signal.
How much? $1 million–$300 million
Lots of cash. You lose control.
When? Early stage, growth stage, late stage
y
“Smart” money—they There is an expectation that
VC firms are companies that pool money from foundations, often have a depth of you will sell the company.
p
insurance companies, pension funds, and institutional in- experience.
vestors and invest that money into high-risk ventures for
Allows you to scale VC firms can put a lot of
o
equity.
quickly. pressure on their portfolio
VC firms are startups. A team of founding partners has a
companies, especially if the
vision for making money by buying equity in other early to
fund is near retirement and
C
midstage ventures. In order to create a fund large enough
investors want their money
to pay for those equity stakes, they have to raise money.
back.
t
The founding partners must convince their investors that
they have access to amazing startups and entrepreneurs
o
and the ability to recognize great businesses in very early Notable Venture Capital Firms
stages. According to the National Venture Capital Associ-
• Kleiner Perkins • Andreessen Horowitz
ation, the average VC fund is $149 million. Because of the
N
Caufield & Byers
high-risk nature of the kinds of investment VC firms make, • Sequoia Capital
funds expect a very high return on their investments. • Greylock Partners

s t
What All Funding
Sources Have in
Po Don’t get nervous about it, realize
you have some of the leverage
r
and power as well because it’s the
Common investor’s job to meet with you. If
No matter which funding sources you pursue, all have one
thing in common: they exist to find you.
Without access to deal flow—a steady stream of high-
y o you shadowed a VC for a month,

you’d see it is their job to have deal
flow and to understand what is
p
potential ideas and ventures—funding sources die. Some
investors like to make entrepreneurs feel as if the power dy- happening out there and what are
o
namics are heavily weighted to their advantage. They’re not. the popular deals.
Broader economic trends ebb and flow. Sometimes,
there is more money to go around than there are ventures —Jeff Avallon, Cofounder, IdeaPaint
C
to put it in. Other times, it’s the opposite. At the end of the
day, both sides need each other and get the most out of
t
treating each other as respected peers.
N o
D o Overview of Funding Sources | 165

s t
Questions You Need to Ask Yourself before
You Raise Money
Po
or
Deciding whether or not to take equity funding is a big decision. These questions help you break down your thinking as
you consider raising money and from which funding sources.*
py 3
If you didn’t raise money,
what would you do?
If you had no other option but to
o
grow the venture without raising
money, what would you do? What
would the next six months look like?
1 2
t C 4
o
Why do you want to raise How much do you want? If you did raise money,
money? There is no scientific way to answer what would you do?
this question. Most startups calcu- Get as specific as possible. Where
N
No, really, why do you want to raise
money? To quit your day job? Hire late the amount they want to raise by would you spend each dollar? When
more people? Reassure yourself starting with a milestone they want would you spend it? Who would you
it’s a good business? Feel cool at a to achieve (say, a minimum viable hire? What are their names? What
cocktail party? Get all of those rea- product or cash flow breakeven), resources would you buy or build?
o
sons out and on paper—the financial, and then planning backward to iden- This exercise may make you uncom-
psychological, and business cases tify the people and resources they fortable; push through it.
for raising a funding round. will need to get there.
D *Thanks to Jeff Avallon, cofounder of IdeaPaint, for suggesting some of these questions.
166
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8/23/15 7:08 AM
s t
Introduction to the
Friendship Loop
Po to—a list that would eventually lead to an investment from
his childhood hero Bono (more on that later). What made
Francis so good at building a network of people willing to
r
help him?
Francis engages in a strict discipline of connecting,
o
When Francis Pedraza landed in Silicon Valley looking to cultivating, and following up with people that we call the
get his startup, Everest, off the ground, he knew a whop- friendship loop. It’s a process focused on relationship
ping total of four people there. So, the first thing he did was building, runs on trust, and takes advantage of often over-
y
ask those four people to coffee. looked opportunities to delight others and invite them to
Having just graduated from Cornell, he moved to the be part of the adventure. It’s a process used—intuitively or
p
West Coast to create an app that helps people live their intentionally—by every successful and well-respected en-
dreams. He had no team and no resources, just a fire in trepreneur we’ve met. It’s also the most ignored aspect of
o
his belly and a conviction that what he was doing would successfully raising money.
change the world. A lot rode on those four people.
With each meeting, he focused on building a strong con-
Fail to Meet the Right People,
C
nection with the people he met. He pitched the idea and
listened to their feedback. He asked questions and looked
Fail to Get the Right Cash
t
for ways that he could add value to their lives by sharing When founders realize that they need to raise money,
what and who he knew with them. Then, he asked them to many react like a man falling backward off a cliff: they find
o
introduce him to three people and, without fail, followed up. whatever’s in front of them and grab like hell. The lure of
Within a few weeks, he had every breakfast, lunch, and din- insta-cash and the fear of the unknown distort the founders’
ner booked with someone new. These meetings led to intro- vision so that they begin to treat their relational networks
N
ductions to people like Peter Diamandis from the X Prize like a series of slot machines to be pulled. Know which ma-
Foundation and Dave Blakely from IDEO, both of whom chines pay out, discover the right ways to play, and eventu-
agreed to join the board of advisers. The more he engaged ally you’ll hit the jackpot.
o
with people, the more they wanted to help him. Some entre- When their immediate networks turn up empty, or if
preneurs were making ten introductions for him. they are too ashamed to ask people they know to invest
Six months later, when he decided he was ready to raise their own personal savings, the founders start looking
D money, Francis had a substantial list of advisers to turn
for institutional money—venture capitalists, bankers, and
8/23/15 7:08 AM
s t
established funds. Although a very small percentage of
startups meet the criteria for this kind of financing, many
founders seek them out because they are much more visi-
Po Second, they assume all money is good money. Entering into

a relationship where an investor gives you cash in exchange
for ownership in your business is like getting married. That
r
ble, the process for applying appears straightforward, and marriage may come with access to new information, indus-
there’s a certain aura of cool that comes from “going out try expertise, or supplier, distributer, or partner relation-
o
for VC.” Months later, having been strung along by a half ships. It also may come with burned bridges, control issues,
dozen responses like “come back to me when you have a or misaligned incentives, so knowing what investors bring
lead investor” and hundreds of unanswered e-mails, the to the table in addition to money should have a significant
y
founders fold their hands and admit defeat, telling them- impact on which people the founders pursue.
selves that it just must not have been the right opportunity,
p
never realizing they were toast from the beginning. Third, some startup entrepreneurs can be terrible stewards
of the relationships people offer them. Everyone loves con-
o
necting one world-class person to another when it’s a gift to
both parties. Who wouldn’t want to be the guy who intro-
The Three Snares duced someone to his next cofounder or the next entrepre-
C
Lost in the moment, founders can often get caught by three neur who made his $10 million? On the other hand, no one
seemingly obvious snares during what is known as the wants to be the guy who introduces someone to the flakey
t
road show—the weeks, months, or years an entrepreneur know-it-all who stands people up. Mishandling a well-
spends raising money. placed introduction makes everyone look bad. Even though
o
there are a few simple things you can do to leave a lasting
First, they prioritize cash over relationship. They assume positive impression on someone who helps you, few people
that money is the most important resource their venture learn to take advantage of them. There’s a better way.
N
needs. It is actually relationships—the vital connections Rather than seeing every high-net-worth individual or
between the right people who have the right resources— firm as a bag of money, entrepreneurs can build relation-
that have the greatest impact on a startup’s chance for ships with investors whose involvement would be mutually
o
long-term success. Cash burns up faster than you can beneficial. They can create such rapport and excitement
imagine, but reputation endures. Cash is likely to be the among the people that they meet that others will go out of
least valuable asset you accrue on a road show. their way to help them.
D 168
| GET BACKED
8/23/15 7:08 AM
s t
Cash isn’t king; friendship is.
We call this paradigm shift the friendship loop, and it
starts by taking stock of your personal social graph—who
Po
r
you know and how much access you have to the things and
people your startup needs. Starting with the people you
o
already know, you bridge to new social networks by ask-
ing for introductions to people they know. Then, you build
trust through those new relationships, delight people with
y
gratitude, and invite them to participate in your venture by
advising or partnering, introducing you to others who can
p
help you, or investing.
Intro, build, delight, invite. (Repeat). That’s the loop.
C o
o t
N

s t
The Friendship Loop
Po
Intro
to someone who can help move your
venture forward.
or Build
a relationship with that person by finding commonalities,
asking questions, and “playing” together.
The first big challenge facing entrepreneurs who are rais-

ing money is building trust with the people who have the
power to help them. Investors get hundreds of e-mails a
py Through that newly transferred trust, successful entre-

preneurs get rare opportunities to sit down with potential
connectors, advisers, and investors. With pitch decks in
o
day from startups that claim they are launching the next tow, they make their ways to coffee shops, restaurants, and
big fill-in-the-blank. What can you do to get them to trust home offices. What happens next may be shocking. They
you? You find a bridge. No matter how isolated, every entre- shut up and listen. The second step of the friendship loop
C
preneur on the planet is one degree from someone who can is to build a relationship. Through finding commonalities
push his or her venture forward. If you can find a bridge to that exist between you, through asking questions and
t
that person through a well-placed introduction, the trust listening, and through invitations to play with your idea,
that characterizes the relationship between the person you killer fundraisers establish genuine connections with the
o
know and the person you want to know will transfer to you. people they pitch to. They seek to understand what each
By starting with the people who are directly in front of you, person wants, and they work to help each person accom-
who already trust you and have an investment in your life, plish his or her goals.
N
you utilize your own strengths and use your first few warm
meetings as opportunities to practice your story, identify
unexamined areas of the business, and strengthen your
o
pitching muscle.
D 170 | GET BACKED

s t
Po
Delight
through gratitude, follow-up, and thoughtful
introductions and resources.
or Invite
them into the adventure by partnering or advising,
introducing you to others, or investing.
When entrepreneurs follow up with those they meet in

sincere and unexpected ways, they turn an ordinary con-
nection into a warm and meaningful memory. Crafting a
py The last step of the friendship loop is to extend an invi-

tation to the person you’ve met. Having carefully thought
out what you’re asking, how it will benefit both of you, and
o
handwritten thank-you note, sending a thoughtful gift, vol- what needs to happen once that person says yes, you make
unteering time to something the person cares about, and a clear offer for your new friend to join you on your jour-
offering valuable connections and resources are the call- ney. Whether you are asking him or her to invest in your
C
ing cards of friendship loopers. As you’ll see later, these venture, join your advisory board, or introduce you to new
small actions can have astonishing consequences when investors, advisers, or experts, you take the responsibility
t
done without expecting anything in return. for making it as easy as possible to do whatever it is you
are asking.
N o

s t
Po
or
py
C o
o t
N
D o

s t
10 Po
Intro or
py
Man by nature is a social animal.
—Aristotle
C o
t
• Introduction to the social graph
• Build trust with weak ties and super-connectors who can introduce you
N o • Be aware of your gaps in knowledge and relationships and make them known
• Leapfrog
D o | 173

s t
Before you can talk to investors,
you have to be introduced to them.
Po We see a lot of startups. The
biggest thing that is often
r
—Paul Graham, serial entrepreneur, underestimated is that the best way
Founder of Y Combinator to get a VC to get back to you is
Reach out to the entrepreneurs

who have been funded by the
y o to get a warm recommendation to
them.
—Tommy Leep, Chief Connector at
investors you want in on the deal.

Make friends with them, pitch
them like you would an investor,
o p Rothenburg Ventures, and former Chief
Connector at Floodgate Fund
and when they say “how can I

be helpful?” . . . then you say . . .
“I have a big favor, can you make
t C The people we spoke to first were
people who were friends or friends
of friends.
an intro for me?”
N o
—Dan Martell, Founder, Clarity.fm
—Adam Tichauer, former President
and CEO of Playbutton

s t
Introduction to the
Social Graph
Po Silicon Valley, and he definitely didn’t know any investors.
He also didn’t know many entrepreneurs, designers, or the
other key people he needed to make Everest a success.
r
Like Bono, for instance.
A month before he moved to the Bay Area, if someone
o
A social graph is a map of your relationships. It provides had told Francis that the lead singer of U2 would be an in-
a picture of connectedness across your professional, per- vestor in his startup, he would have said that person was
sonal, and family relationships. They can be massive and insane. And yet, six months after launching Everest, there
y
amorphous or very simple. was Francis, sitting at Bono’s house in Ireland, listening to
The complexity and shape of your social graph depends him talk about how much he loved the app.
p
on how connected and diverse your network is. By con- How did it happen? It began with Francis analyzing his
nected, we mean how many people you know. By diversity, social graph.
o
we mean how many different kinds of people and groups
you know. The more connected and diverse your relation-
ships, the more amorphous your social graph will look. The
C
less connected and more homogenous your relationships
are, the simpler it will look. A person with a better con-
t
nected, more diverse social graph, all other things being
equal, will have an easier time raising money. Common
o
sense, right? Well, the significance of your social graph is
more subtle—and powerful—than you might think.
N
Venture Spotlight: Everest
Consider Francis Pedraza. The founder of Everest we intro-
o
duced at the beginning of this section knew people before
he started raising money for Everest. He even knew plenty
of different kinds of people. But, he didn’t know anyone in
D Intro | 175

s t
The
TheSocial
The
SocialGraph
Thejourney
Graph
from
journey Francis
from to Bono
Francis to Bono
Po 5 Fred and Avie decided to invest as
r
individual investors and invited Bono
to join them. And, the next thing he
knows, Francis is tromping across
1 Knowing that he needed new 2 In order to grow his social graph,
o
connections to get Everest off the Francis tasked John, his intern, with Ireland with one of the greatest
ground, Francis decided to map his the job of identifying people in musicians of all time.
social graph. This is more or less what Francis’s network who knew people
y
it looked like—some variations here Francis wanted to know.
and there, but, for the most part,
everyone he knew knew each other.
p
BONO’S
Much like most people. Fred Anderson 4 NETWORK
2
Existing investor
C o 5
Bono
t
1
Francis 3
Adam Hopkins
FRANCIS’S
NETWORK
N o 3 The intern made a discovery about

one of Francis’s existing investors.
That investor was a friend of Adam
4 Francis reached out to this existing investor and
asked for an introduction to Adam. The investor
made the introduction, and Francis pitched Everest
o
Hopkins, a partner at Elevation. to Adam. Adam liked what he heard. He invited
Elevation is a private equity firm with Francis to come pitch Fred Anderson and Avie
investments in Facebook, Forbes, Tevanian, the managing directors of the firm.
D
and Yelp, and, coincidentally, was
cofounded by Bono.
176 | GET BACKED

s t
Your social graph matters because it helps you identify
where and how to start the first step in the friendship loop:
bridging from someone you know to someone you want to
Po with only two lines extending from it. We’ll call her Stacy.
On the surface, it would seem that Stacy is a loner, maybe
a good gal, but not worth investing in from a fundraising
r
know. In the same way that a neurologist uses an MRI to perspective. But remember, Stacy is a social creature just
identify key issues and prescribe treatments, you can learn like you; she probably knows as many people as you do,
o
to identify and diagnose the character of your social graph only you don’t know any of them. And at least two or three
in order to discover who you need to be meeting with. of those people may happen to have a truckload of money.
In his book Where Good Ideas Come From, Steven The distance between you and Stacy’s rich friends is
y
Johnson demonstrates that connectedness between nor- what sociologists call a structural hole, and Stacy bridges
mally isolated people and ideas is the primary engine of it. Unlike most of your relationships, the information, con-
p
innovation across history. The relationships you choose nections, and money that Stacy has access to through her
to develop decide which ideas and opportunities present rich friends are completely novel to you. You can’t get it
o
themselves to you. If you spend time with only the same from anyone else.
people, who spend time only with you, chances are you are What does this all mean? It means you are all literally
going to know the same things, talk about the same things, one introduction away from dramatically altering your so-
C
and like the same things. But if instead you make friends cial identity and the people, resources, and information
with people who aren’t in your group, you get access to all you have access to.
t
kinds of new information, resources, and opinions. Ron- That is why intro is the first step in the friendship loop.
ald S. Burt, the sociologist who pioneered this idea, says To build connections with the people who have the power
o
it this way: “Resources flow disproportionately to people to help your venture, you have to get introductions to them
who provide indirect connections between otherwise dis- by bridging from someone you know to someone you don’t
connected groups.” Francis says it a bit more plainly: “You know. You do that by making your needs clear to those
N
have to increase your luck surface area.” around you, building trust with the people you know, and
Take a look back at the social graph on the previous leapfrogging.
page. Each of those tiny dots and lines represents a per-
o
son’s communal identity. Imagine what each of those dots
represents—the passions, resources, and knowledge within
each person. Now, look at just one dot, one in the corner
D Intro | 177

s t
Social Graphs
Social Graphs 101
101
Po WEAK TIES
What they are: The people on the
r
periphery of your social graph. Most people
STRUCTURAL HOLES refer to them as “acquaintances.” Weak ties
What they are: The spaces between two are the highways by which novel resources
o
or more isolated clusters. and information pass between clusters.
What they mean: Find structural holes What they mean: The most important
and be mindful to fill them with new people in your graph are those you know
friendships. For example, if you are starting the least since they have access to people
y
a home improvement company, then you and information you don’t.
ought to fill in your holes with builders,
architects, and designers.
o p C
CLUSTERS
t C
o
What they are: Each social graph is divided
into smaller sub-networks known as clusters. SUPER CONNECTORS
People in the same cluster know a lot of the What they are: People who fill many
N
same people and will have access to the structural holes. Super connectors know
same information and resources. Most a lot of different people from a lot of
people have a work cluster, a family cluster, different clusters.
a school cluster, and a few “club” clusters What they mean: A few people will
(church, professional organizations, hobbies). probably be responsible for introducing
o
What they mean: Investors, like all people, you to almost all of the people you need
run in herds. If you don't have any investors to know. Identifying and enabling these
in your clusters, you need to begin to make people is one of the most powerful
D
friends outside of those clusters. things you can do.
178 | GET BACKED

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DEEP DIVE
Increasing Your Luck Po The bet is paying off: Chegg and Twitter, both Floodgate
companies, IPO’d in 2013.
With the Tommys of the world out roaming subways
r
and cafés looking for people to bump into, the chances
of an unexpected encounter that could lead to something
Surface Area
o
bigger increase significantly. The most important interac-
tion of your road show will very likely be unplanned, unre-
hearsed, and accidental.
y
Tommy Leep wants to meet you.
He lives in three different places in the Bay Area, works how to increase Your Luck Surface Area
p
in Palo Alto and San Francisco, and spends time in public
places as much as humanly possible. His job is to run into 1. Make your needs known. Nobody can help you
o
people. He and Floodgate, the $149 million fund he used to unless he or she knows how to.
work for, are betting on that kind of connectivity to find the
2. talk to everyone. Even the strange guy next to you
startups that other people don’t see and to help the start-
in the airport terminal. The world is a lot smaller
C
ups they fund succeed:
than you think.
t
My observation from growing up here, and from the 3. Work in public spaces. Subways, airports, coffee
research that people have done on Silicon Valley, is shops. Every town has at least a few restaurants
o
that there is a whole ecosystem in Silicon Valley that and coffee shops where deals tend to get done. The
includes entrepreneurs, investors, banks, lawyers, easiest way to get a chance encounter with a well-
accountants, PR, journalists, they make the whole eco- known angel or VC is to frequent the places they
N
system work, it wouldn’t work without the whole eco- frequent.
system. So, it’s important to know as many people as
possible in that ecosystem and help them get what they
o
want. That way, should an awesome entrepreneur come
along, we are in a position to help them by connecting
them to people in other parts of the ecosystem.
D intro | 179

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Be Aware of Your
Gaps in Knowledge
Po Eventually, they came up with about twenty criteria that
they used to evaluate possible investors. The more they
focused on their needs as a business, the more they began
r
to see financial capital as a commodity. Sure, they needed
to get enough commitments to reach $1.5 million (the
and Relationships
o
rough estimate they figured they would need to support
the team for eighteen months). But more than money, they
and Make Them needed smart people who were willing to help out with the
y
business.
Known Let your needs for things other than cash guide your
p
strategy to building new relationships and then make
When Evan Baehr and his cofounder Will Davis started those needs known to those around you. People will know
o
raising money for their first startup, Outbox, they made much better how to help you when you tell them what you
two lists. The first was a list of one hundred people they need. The more concrete your needs, the better. Far from
knew or had a connection to who they thought could write making you look stupid, leading with your needs shows
C
a check for $50,000. The second was a list of things they the people you meet that you have a clear grasp of what
knew nothing about but would have to become experts in it takes to make your venture a reality. You’ll also save
t
to make Outbox a reality. The core concept of Outbox was yourself from well-meaning introductions that don’t lead
Dropbox for your snail mail, so their list was filled with to anything and increase your chances of making a con-
o
items like: nection that is mutually beneficial.
1. Knowledge about the US Postal Service.
N
2. Building labor forces.
3. Hiring developers in Austin, Texas.
D o 4. Big media and ad agencies in New York City.
5. Partnerships with consumer internet companies in
180 |
Silicon Valley.
GET BACKED

s t
Your Two Lists
Po
r
Take ten minutes now and start the hard work of making
your version of the two lists. Make it a goal to write down
o
ten names and ten needs before you move on. We’ve given
you some sample categories to get you thinking.
Our People List
1. Rich aunt
py Our Needs List
1. Industry expertise
o
2. Small business owner at church 2. Renting office spaces
3. Local Chamber of Commerce 3. E-mail marketing tactics
C
4. 4.
5. 5.
6.
7.
8.
o t 6.
7.
8.
9.
10.
N 9.
10.
D o Intro | 181

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Build Trust with Weak
Ties and Super-
Po know. For instance, pay attention to resources that might
be valuable to them—an article or an event related to their
industry or people in your network that they would want to
r
know. You can also reach out and ask them for help. Appeal
to the person’s expertise. Let her know why her input and
Connectors Who Can
o
feedback are so valuable to you.
In order for an introduction to be successful, there has to
Introduce You be some level of trust built up between you and the person
y
introducing you. Before you ask for an introduction, ask
Introductions have the power to change how a person you yourself:
p
meet thinks of you. With a great introduction, you get to
share in the trust that your connector has built with the • What is the level of trust between this person
o
person he or she is connecting you with. Trust transfers. and me?
The transfer of trust is what kept us from getting beat up
• What is the level of trust between him or her and
in middle school the first time a new friend invited us to sit
the person I want to be introduced to?
C
down at the popular kid’s table.
• What motivation does this person have for
t
“What’s this guy doing here?” introducing me?
“He’s cool. He’s with me.” • What motivation is the investor likely to think
room.”
N o
“Alright, cool. Let’s go dump trash in the choir
Statistically, weak ties and super-connectors will be the

most valuable resources in your network. In the next chap-
he has?
o
ter, we will go into more depth on how to build a connection
with those you meet, but you can start by looking for ways
to add value to the lives of weak ties and connectors you
D 182 | GET BACKED

s t
E-mail Script: Building Trust through
Asking for Feedback
Po
or
Scenario: Reaching Out to a Close Relationship for Feedback
Begin with some-

thing personal and
Subject: Lunch for your feedback?
py
Hi Jim, I heard that you ran a marathon recently. Congratulations! What a huge
accomplishment.
o
congratulatory.
Quick question for you:
Be specific about why
I’m launching a new venture called TreeHouse and I’d love to get your take on
C
you are reaching out and
why his or her feedback the concept, especially given your love for sustainability.
will be valuable.
t
Can I take you to lunch in the next couple of weeks? My treat.
I’m available:
o
Give three different
options to minimize
N
the back-and-forth of
scheduling.
• Monday, August 1, anytime 11 a.m.–2 p.m.
• Tuesday, August 2, at noon
• Friday, August 5, anytime, 11 a.m.–2 p.m.
But I’ll work around your schedule. How does Congress Café sound?
D o Best,
Evan
Intro | 183

s t
Leapfrog
Po and have a short conversation. At the end of your meeting,
ask, “What two people come to mind who might be helpful
r
Leapfrogging is the practice of asking others about people here?” Asking for three people is greedy. One is lame. Just
they know who might be helpful to you. ask for two. Give them a minute to think about it and wait
o
Pick five people you know who might be able to help for them to name two people. Mention that you’d love an
you with your goal and ask if you can bring them coffee introduction and that you will follow up.
E-mail Script: Forwardable Intro
Subject: Thanks! // Intro to Jason?
py
Acknowledge that you
know how valuable
their time is and show
Dear Jim,
C o
Thank you so much for your time and wisdom today. I know you are
slammed with the success you’ve had with Loop, so I’m especially
grateful. Since we met, I’ve been thinking about what you said about Mention something they
t
that you are aware and said or contributed.
applaud them for their the importance of gratitude; it is a really great way to frame how we are
success in what they
thinking about our business.
o
are doing.
Thank you also for the offers to connect me with Jason. I’ll follow up with
a separate e-mail that you can reference to make an introduction really
N
easy for you.
Sincerely,
Evan

s t
Subject: Intro for AcmeCorp?
Dear Jim,
Po
r
Give the three-second
Thank you so much for meeting with me to discuss our new venture:
hook/elevator pitch. AcmeCorp, the first brick-making company that doesn’t suck.
o
Mention the reason Thanks for offering to introduce me to Jason. As you mentioned, it sounds
they recommended the like he’d have a lot of insight about how to navigate manufacturing issues.
introduction.
I’d love to connect with him.
Sincerely,
Evan
py
PS: As background for Jason, I’ve included a blurb below on AcmeCorp and
my background.
o
About [Company Name]: [150 word description of your company]
C
About me: [50 words about you]
o t
N
D o Intro | 185

s t
E-mail Script: Copy/Paste Intro
Subject: Thanks! // Intro to Jason?
Po
Hi Jim,
or
Thank you so much for meeting with me this morning. I really appreciate
getting your feedback about the EdTech case, product direction, and
fundraising decks. I would appreciate getting your feedback on my deck
Cast a vision for a con-
tinued relationship, with-
y
out putting the onus on
as I get it ready for my NYC road show. the other person.
p
Also, would you please introduce me to Jason at Arden? An e-mail you can
copy and paste is below. After our meeting, I talked to my product guys and
I am confident that we set a schedule to surpass Nisco’s expectations. For
o
Respectfully decline an
introduction you’re not right now, please hold off on an introduction to Derick.
ready for. Add a specific and per-
Again, thanks and good luck with the new house!
C
sonal note to help build
—Evan relationship.
t
-------------------------------------
Jason,
N o
Elevator pitch a version
of “We help __________ do
__________ by __________ .”
I hope you’re well.
I want to introduce you to Evan, the CEO of Form. His company builds
personal financial management apps for employer-based financial wellness
programs. He is traveling to New York in late April and was hoping to
connect with you.

With that, I’ll let Evan take it from here.
Best,
Jim

s t
How to Be a Great Introducee
For the person making it, an introduction is a dangerous
Po to e-mail him a general thank-you e-mail and then sepa-

rate e-mails for each introduction you need. So, if he offers
to introduce you to two people, you’ll send him a total of
r
thing. If the introducee misses the meeting, doesn’t do his three e-mails. In your introduction e-mail, thank him for
or her homework, acts rudely, or makes vague or unreason- agreeing to introduce you, express why the connection
o
able requests, it can damage the introducer’s relationships will be valuable, and include a short paragraph about your
and reputation. Many people argue that in a knowledge venture.
economy, your network is your single greatest asset—an When reaching out or following up with new connec-
y
asset that must be nourished and protected, if need be. tions, be very specific about what you are asking for. Never
Here are some ways to make sure you don’t take the intro- use phrases like, “Can I pick your brain?” or “I’m hoping
p
duction for granted. to network with . . .” Explicitly state your need and what
you would like him to do. In the e-mail, you can also sug-
o
Follow up that day. Ideally, within the first few hours of the gest a few specific times to meet and tell him you will work
meeting. This keeps you on top of mind and takes advan- around his schedule. Put all times in the time zone of the
tage of the momentum you’ve built connecting. person you’ll be meeting and, if meeting in person, offer to
C
meet at his office or at a place nearby.
Keep it super-short. Six sentences or fewer. Most busy
t
people get somewhere in the area of a hundred e-mails a
day. Even if they spend an hour a day just working on that
o
day’s e-mails, that gives them thirty-six seconds to read,
process, and respond to each request. Thirty-six seconds.
If it takes more than fifteen seconds just to understand
N
what you’re asking, you don’t leave much time for them to
do something about it. (As a reference, it took you about
fifteen seconds to read this paragraph.)
D o Make your contact do as little work as possible. The only

thing the person who has agreed to introduce you should
have to do is hit the forward button. One way to do this is
Intro | 187

s t
Po
or
py
C o
o t
N
D o

s t
11 Po
Build or
py
The purpose of the pitch is to offer something so
o
compelling that it begins a conversation, brings the other
person in as a participant, and eventually arrives at an
C
outcome that appeals to both of you.
o t
—Daniel Pink, author, To Sell Is Human
• Three questions all investors ask themselves

• Do your homework
N • Plan your opening

• Find commonalities
D o • Ask great questions and listen

• Play together
| 189

s t
You are screwed if you can’t make
friends with an investor. It signals
Po We had the approach from the
second I joined, to sit back and
r
that you probably can’t build a talk to as many smart people as
team or recruit key partners, etc. possible. We were fully aware that
—Dan Martell, Founder, Clarity.fm
y o eventually those conversations

would turn into fundraising
conversations.
I don’t put money on anybody I
don’t like.
—Mike Rothenberg, Managing Partner,
o p —Jeff Avallon, Cofounder, IdeaPaint
I’ll let the entrepreneur give their
C
Rothenberg Ventures
whole pitch, and then it turns into a
o t conversation. The conversation is

the best part.
—Tommy Leep, Chief Connector at
N Rothenburg Ventures, and former Chief

Connector at Floodgate Fund

s t
The private wealth division of a very well-known invest-
ment bank has an axiom it discusses with every new
employee during training. Potential investors will ask
Po escorted him to the office, which looked more like the li-
brary at Harvard. Gorgeous paintings lined the walls. As
they sat down, Loomis tried to make small talk.
r
themselves three simple questions during a meeting: “I like the artwork,” Loomis said. “Was it painted
nearby?”
o
1. Do I like you? “No,” the investor said. “They’re Rembrandts.” Of course
they are.
2. Do I trust you?
Feeling insecure, Loomis reached for his pitch deck and
y
3. Do I want to do business with you? started talking about this amazing business idea called
TreeHouse. After five minutes of the “show,” Loomis could
p
And they ask them in that order. Unless someone likes tell the investor was losing interest. What was it? He made
you, they will never stick around long enough to find out if a bold move.
o
they trust you. If they don’t trust you, they will never want “Would it be okay if we stopped talking about Tree-
to do business with you, no matter how good your deal is. House? I’m interested in getting to know you better.”
In the end, it’s not your pitch deck that decides whether or “Good,” he said. “I was about to ask you to leave my
C
not you succeed on the road show; it’s your ability to an- house.”
swer these three little questions. In this chapter, we walk
t
you through how to build relationships with your new con-
tacts in a way that helps them answer those three ques-
o
tions sooner, rather than later.
In the very early days of the TreeHouse road show,
Loomis got an intro through a mutual friend to a billionaire
N
in New York City. “Why don’t we meet at my house?” the
billionaire suggested. On the day of the meeting, Loomis
made his way down Park Avenue, passing by buildings
o
that have housed people like Jacqueline Kennedy Onassis,
John D. Rockefeller, and the heir to the Johnson & John-
son fortune. Intimidated, he rang the doorbell. Someone
D
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s t
Deep Dive
Perspective Taking, Po ple often confuse it with empathy, but the two are distinct
experiences. Empathy is about emotionally connecting
with someone else or feeling what he feels. Perspective tak-
r
ing is about understanding someone’s thinking or seeing
what he sees.
First Impressions,
o
Perspective taking is about asking questions like:
and How to Close • What might this person be thinking and feeling
y
before she enters the room?
an Investor in Three • What is she doing and saying when she is in the
Minutes
There are certain clues—eye contact, tone of voice, body
o p room?
• And, most importantly, why?
The First Three Minutes
C
language—that give us insight into what a person is think-
ing. If we can learn to pay attention to those clues, we can Psychologists have found that humans begin to categorize
t
start to understand the world from that person’s viewpoint. the people around them within 150 milliseconds of meet-
If we can understand the world from his viewpoint, we can ing them and, by the end of a first meeting, have likely
o
anticipate his behavior. We can know what he is going to made character judgments that can endure for a very long
do (like whether or not he wants to invest in the deal) be- time.* In the very first moments of your interaction, here
fore he does it. are some of the questions a person may be asking.
N
In the very first moments of interacting with someone,
your brain moves through a series of conclusions, some
conscious, some not. With a skill that psychologists call
o
perspective taking, you can learn to recognize and even
anticipate these initial reactions. Perspective taking is a
way of understanding someone’s world through his eyes
D
*Kimberly D. Elsbach, “How to Pitch a Brilliant Idea,” Harvard Business Re-
that allows you to anticipate what he might do or say. Peo- view, September 2003, https://hbr.org/2003/09/how-to-pitch-a-brilliant-idea.
192 | GET BACKED

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Fifteen Milliseconds: Should I Trust You?
Long before you’ve said a word, the person you are meet-
Po Three Minutes: What Am I Going to Do?
Eventually (in around three minutes), the prefrontal cortex
r
ing has made an unconscious mental judgment of you, and kicks in to start making decisions about what to do with
you have made one of him. The amygdala—the part of your the information the person is taking in. It starts by com-
brain that you share with reptiles and that tells you whether ing up with a set of potential actions—invest or not invest,
or not to punch someone, run away, or play dead—makes a
nearly automatic conclusion about your surroundings. Do
I trust this person? Does this person look like someone I
might like?
y o for instance—and then doing a risk/reward calculation for

each of those actions. Before long, you have a pretty strong
idea of which action is worth pursuing.
p
Exercises to Improve Your Perspective Taking
Ten Seconds: What Kind of Person Are You? Are
Read more literary fiction. A recent study found that read-
o
We Connecting?
ing literary fiction can increase a person’s ability to rec-
In the seconds that follow, two other processes begin. The ognize someone else’s mental state. These kinds of works,
C
first, referred to by one study as “prototype matching,” according to the research, cause people to use their imagi-
searches through the listener’s preconceived notions and nations to make inferences about what someone might be
t
stereotypes to compare and contrast you with what she thinking.
already knows. Are you the creative type? Can you tell a
o
good story? Can you get the job done? Do you have what Take an improv class. Improvisers have to pay attention to
it takes? The second process is self-reflective; it pays atten- subtle clues in their partner’s words, movements, and body
tion to what the listener is doing and feeling in order to find language to fill in the gap of knowledge between them. In
N
clues as to the kind of relationship that’s being formed. Am other words, they have to learn to read each other’s minds.
I being “swept along” in the magic of something bigger, or
am I bored and distracted? Lead with the most controversial part of your venture. Choose
o
the most controversial aspect of your pitch, and the next
time you meet with someone, make it the first thing you
talk about. Then, watch his or her response. Use it as a lit-
D
mus test for gauging his or her interest in your venture.
Build | 193

s t
Do Your Homework
Po only PDF files and will likely turn up work they’ve
written.
2. Follow them on AngelList. See what invest-
r
Want to make sure the person you meet with never an-
ments they’ve made recently and who they are
swers your e-mail again? Show up unprepared.
connected to.
o
Entrepreneurs and high-net-worth people are extremely
busy. They have to say no to people every day. They don’t do 3. Follow them on Twitter. See who they follow and who
it because they’re sadistic (not most of them, anyway); they they’re tagging and talking to.*
y
do it because, if they don’t, their lives will literally fall apart. 4. Use Newsle. Newsle is a service that syncs with
In the time it takes both of you to sit down and sip a latte, your e-mail, LinkedIn, and Facebook to find news
p
most investors will have fifty new demands for their time articles on people you’re connected to. You can also
waiting in their in-boxes. Every minute there is a trade-off use it to follow people you want to connect with.
o
between things that are both important and urgent.
5. Read their blog.
Busy people have websites with bios for a reason. Read
them. People are flattered when you take the time to find
C
out about them—their interests, prior investments, and es- What You Should Know about the
pecially, mutual relationships. Google is the best place to People You Are Meeting
t
start. Then, search their LinkedIn profiles, company web-
1. Professional background
sites, and board memberships. Pay particular attention to
o
the types of organizations they are involved in. You can 2. Mutual relationships
find out a lot about a person with five minutes of internet
3. Personal interests
research. After half an hour, you should have a solid idea of
N
how you think this person can help you. 4. Boards they serve on, nonprofits they volunteer for
or support
5. Marital and family status
How to Research People You Are Meeting
D o 194
1. Google their name and review the first two pages of
results. Then, Google their name again, but this
time add “filetype:pdf” to the query. It will display
| GET BACKED
*Thanks to Mark Suster and his blog, Bothsides of the Table, for this tip,
http://www.bothsidesofthetable.com/2009/06/19/getting-access-to-the-old-
boys-club-how-to-approach-a-vc/.

s t
6. Previous deals they’ve done, companies they’ve
started, and industries and areas they favor
Po Commonalities
Background Profile
Template
or Plan Your Opening
y
You pull open the glass door to the café and walk through.
First and Last Name As you look up, you catch a glimpse of a woman near the
p
Company/Organization counter. She swipes and taps at her phone. You recognize
her from the research you’ve been doing in preparation
o
Profiles for the meeting. You approach her, introduce yourself, and
AngelList: offer to buy her a coffee. She accepts, and you both turn to
get in line. The noise of grinding espresso and conversa-
C
Twitter: tion swirls around you. The two of you stand silently, wait-
ing to reach the barista.
t
What They’ve Written What do you say?
By planning out what you say in those first crucial min-
o
utes, you will learn how to set the tone of a conversation.
Your opening remarks should do six things.
Mutual Relationships
N 1. Show That It’s Not All about Money

There is a palpable awkwardness in any interaction where
o
asking for money is involved. They know you are only meet-
Deals They’ve Done
ing to ask for something from them. You know they know you
are only meeting to ask for something from them. Inwardly,
D
you are both squirming. But what do you can do about it?
Build | 195
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s t
You make it go away by ensuring that your first conver-
sation is not about money. Because the reality is, it’s not
all about money, especially at first. In the beginning, your
Po 3. Show Confidence
Stand up straight, look the investor in the eye, and firmly
r
goal, and the goal of the person you are meeting, is to an- shake his or her hand. Show that you are trustworthy.
swer the question: “Do we like each other?”
2. Complete the Transfer of Trust

Pay attention to the transfer of trust the next time you sit
down with someone you’ve been introduced to. The con-
y o 4. Put Them at Ease

Everyone is insecure. Even the investors you meet. Of
course you’re nervous; you’re about to put your baby on
display and ask for a bunch of money. Recognize, though,
p
versation almost always goes like this: that investors get nervous, too. You are a gamble to them.
Use the personal information you learned from doing your
o
“Hey, Bob, it’s great to meet you!” homework to show respect for them and show that you care
and are excited to get to know them better.
“Good to meet you as well.”
C
“I’m so glad John put us in touch; he’s a great guy.
How did you first meet?”
5. Make It about Them
t
Dos Equis has a series of commercials about the “most in-
“He saved my dog from a burning building.”
teresting man in the world.” The narrator tells of the feats
o
“Man, that’s just like John.” of actor Jonathan Goldsmith (“He gave his father ‘the
talk,’ ” “When he drives a car off the lot, its price increases
“It sure is.”
in value.”) The campaign’s popularity drives home an im-
N
portant lesson about human nature: everyone has a desire
Do you see what happened? By connecting over your
to be perceived as smart and interesting.
shared appreciation for your friend John, you completed
When people feel smart, they feel empowered. When
the transfer of trust that John started when he introduced
o
they feel empowered, they open up and share their ideas.
you and Bob over e-mail.
Sharing ideas is called “play.” (More on that soon.)
D 196
| GET BACKED
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s t
6. Show Gratitude
Anyone who has enough experience to help you is going to
Po “I’m really grateful to __________ for introducing us.

How did you first get connected with him/her?”
r
be busy—very busy. That means that they have likely sac-
rificed something very important to take thirty minutes
Find Commonalities
o
out of their day to meet with you—a couple dozen e-mails,
a lunch with their spouse or an old friend, their midday
workout. You recognize that sacrifice by expressing your Commonalities are the passions and details of life that you
share with the people you meet. The mutual friend who
y
gratitude.
introduced you is the most obvious commonality you’ll
share with the people you meet, but it won’t be the only
Scripts for Your Opening
At a Presentation
“I’m so grateful to get to be here today. Thanks for

o p one. Maybe you went to the same alma mater. Maybe you
both like hockey, or are coffee aficionados, or are passion-
ate about the same causes. As you research someone’s
background, search for things that you have in common
C
taking the time to share your vision and hear a bit that you both would enjoy connecting over. Then, bring it
more about what we’re up to.” up during your meeting.
o
you first connected with him/her.”
t
“I’m really grateful to __________ for introducing us.
Before I get started, I’d love to hear more about how
“You and I are from the same town,” you’ll say.
“No way,” he or she replies.
“What street did you live on?”
“Broadmoor.”
N
At a One-on-One Meeting
“I was really excited when we got connected “You’re kidding me! My cousins live on Broadmoor—
because . . .” the Smiths.”
o
“The Smiths used to babysit me!”
“So, tell me more about __________ . I saw it in your
bio, and it fascinated me.” “Small world!”
D “You and I have something in common . . .” By this point, you’re practically family.
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s t
Commonalities to Build Off
• Your mutual friend
Po his life and listen to his responses. Ask his feedback about
specific aspects of the venture. Tell him why you wanted
to meet with him and why you think his support would be
r
invaluable to you.
• Hobbies
Would you rather give money to the entrepreneur who
• Causes
o
is sure that he’s right and isn’t interested in your thoughts?
Or to the entrepreneur who is constantly learning and asks
• Foreign languages
for feedback?
y
• Locations—hometowns, favorite places to visit, One of the most exciting parts of the road show is get-
college towns ting input from your investors. Many of their ideas are
p
worth their weight in gold. At TreeHouse, Loomis made
major changes in his business model after speaking with
o
the founders and executives of Home Depot, The Con-
tainer Store, Neiman Marcus, Ace Hardware, Apple Store,
Ask Great Questions and Whole Foods. If you have the curiosity and humility to
C
ask for feedback, you’ll be amazed at what you learn. Make
and Listen it a point to not argue with what they tell you or try to de-
t
fend yourself or your idea, even if what you hear sounds
It’s easy to get caught up in “nailing the pitch.” Especially insane. Listen, take notes, and say thank you.
o
during those first meetings, your nerves can give you tun- Remember, someone you know put trust on the line in
nel vision. Overwhelmed by the pressure and the task in order for you to get this meeting. Are you living up to that
front of you, you lose sight of the fact that the person in trust?
N
front of you isn’t a cash dispenser and he or she didn’t show
up to listen to a lecture.
People take meetings expecting to have conversations. Questions You Can Ask
o
So make it a conversation. Get phenomenally interested in “Can you tell me about the first company you ever
the person across from you. His life should be so amaz- invested in?”
ing to you that you would want to write a book about it. If
D not, why are you meeting with him? Ask questions about
198 | GET BACKED

“What gets you really excited about a company?”

s t
“What’s something you see in early-stage startups
that most people don’t?”
“What do you believe is true that most people
Po answer questions freely, of your own volition, and not

because you are obligated to, we say you are curious.
But curiosity doesn’t immediately imply you are going
r
to play. No, play involves something else—play involves
would disagree with you about?”
willful action, usually a willful action of touching or
o
“What do you think we might not be seeing changing something—manipulating something, you
right now?” might say. So, one possible definition would be: Play is
manipulation that indulges curiosity.
Play Together
py A key aspect of building a relationship with investors is
indulging their curiosity and inviting them into a kind of
play that involves your idea. You allow them to make sug-
o
gestions about how to improve your business model, ask
Play might sound like an odd description for a first-time questions about your assumptions, and make connections
meeting with a billionaire angel investor, but that is ex- about how and why what you’re doing is going to be world
C
actly what most investors do when they are interested in changing.
an opportunity. Play implicates them in the venture; it puts Make no mistake; letting others play with your idea can
t
them into the driver’s seat and causes them to look at the be hard. Entrepreneurs have invested a lot of time and
venture from the perspective of someone already involved. heart in their ventures, and opening that venture to what-
o
What does it mean to “play”? ever brilliant idea the person you talk to comes up with
Jesse Schell, designer of play experiences like Dis- is scary. And yet, this kind of openness is how powerful
ney’s “Toy Story Midway Mania” and “Pirates of the Ca- connections are formed, and it’s one of the quickest ways
N
ribbean,” and author of The Art of Game Design, says this to refine the idea.
about play: Does your venture have a physical component? Bring it.
Is there a demo of it? Show it. Can the people you meet with
o
I can’t help but notice that most play activities seem go to something that you’ve built or created? Bring them
to be attempts to answer questions like: “What hap- there. Then, get out of the way. Let them play with what
pens when I turn this knob?” “Can we beat this team?” you’ve created and see if they’re interested in playing more.
D “What can I make with this clay?” . . . When you seek to If they are, you will get the opportunity to play together.
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s t
You can recognize that someone is playing with you
when they ask questions like, “What if you changed . . .?”
or “Have you thought about . . .?” or when they make state-
Po three minutes. “I [would] always bring the hot spot,” he

said. “The first thing I would do is pull out the device, put
it on the table, and just leave it there. I noticed that if peo-
r
ments like, “That could be really great for . . .” These comple play with it, they like it; if people don’t play with it, they
ments are the classic “yes, and . . .” principle of improv in don’t like it.”
o
action. They are taking your idea and running with it so In the span of about a month, Steven met with two
that it becomes our idea. hundred potential investors. “One hundred eighty people
When you’ve done that, you’re ready to move on to the thought we were idiots,” he said, “and twenty people really
y
next step of the friendship loop. liked us.” Many of those twenty people knew they were
going to invest within the first three minutes. Steven re-
p
flected on it afterward, “That was sometimes really helpful,
Venture Spotlight: Karma because if people are excited, they are really excited. It was
o
“We’re building the first mobile provider that doesn’t a helpful way to filter out conversations that would lead to
suck.” That’s the opening line for Steven van Wel and the investments.”
guys at Karma—a pay-as-you-go mobile Wi-Fi hot spot. The guys at Karma used the most controversial aspects
C
They had built a lot of momentum after an accidental en- of their business as a litmus test for revealing an investor’s
counter with the managing director of Techstars New York interest. Instead of focusing on cajoling those who weren’t
t
and decided to go out for a $1 million seed round. Early very interested in the first place, they led with what they
on, they realized that there were two things about the na- knew would either scare people off or excite them enough
o
ture of their company that either drew people in or repelled to join. Every great idea has something about it that people
them. First, they were hardware. People have an immedi- will find either brilliant or idiotic. Find out what will create
ate reaction to seeing a physical product—you either like an immediate reaction in potential investors and commu-
N
it or you don’t. Second, they were a mobile provider. There nicate it as early as possible.
aren’t a lot of successful small mobile providers, and to go
after the AT&Ts was going to be a challenge—one you’re
o
either up for or you’re not.
So, when Steven opened a conversation with a potential
investor, he made those two things clear within the first
D 200 | GET BACKED

s t
Handling Objections
Po No matter how much you prepare, you will still get
questions about your venture that you don’t know how to
answer. Own your ignorance. A simple, “I don’t know the
r
Every venture has some sore spot it would prefer to gloss answer to that, I will get back to you” builds trust and gives
over or not mention at all. Often, entrepreneurs won’t even you an opportunity to follow up. You can also ask investors
o
see these problem areas until an investor asks about them, for their feedback by saying something like, “That’s a chal-
and suddenly they find themselves caught with their pants lenge we’re still trying to solve. This is what we are doing
down, wishing they had never taken the meeting. right now to solve it, but do you have any feedback?” Don’t
y
The easiest way to keep from looking like an idiot in give a BS answer. It just makes you look stupid.
front of an investor is to spend your first meetings getting In your meetings, if investors ask you several of the
p
feedback from people you know and trust. These meetings same questions over and over again, add them in a FAQ
will help you identify the weak spots in your business and slide in the back of your deck.
o
learn how to address them honestly and directly.
You can start to uncover those areas now by asking
yourself the following questions:
1. Where are the gaps in our team?
t C
2. What do we lack in experience, knowledge, or
relationships?
o
3. What assumptions do we make in our projections?
N
4. What are we afraid to ask ourselves?
5. What have we underestimated about our

competitors?
D o 6. What are our greatest risks?
7. What’s in it for me? Who knows that?
Build | 201

s t
Po
or
py
C o
o t
N
D o

s t
12 Po
Delight or
py
C o “Can I do anything for you, Mr. Bond?”
“Just a drink. A martini, shaken, not stirred.”
—Goldfinger
o t • Follow up immediately
• Send a handwritten thank-you note
N
• Give a thoughtful gift
• Make specific offers of your network and resources
D o | 203

s t
There was this one investor we
really wanted to have onboard.
Po
r
They weren’t having it. I got an
existing investor to write a follow-up
e-mail. I spent two hours writing a
two-line e-mail to him. The investor
who backed me said, “Incidentally,
y o
that was a really effective email.”
—Sanjay Dastoor,
Cofounder, Boosted Boards
o p
t C
N o

s t
The meeting went fine, but Loomis could tell he wasn’t in-
terested. They stood up, and Loomis thanked him for his
time. They shook hands and left the café. A few weeks later,
Po delight someone. You can show grace or kindness to some-

one when she is late or forgot something she told you she
would do. You can show an extra amount of thoroughness
r
Loomis remembered a small detail about the conversation. and follow-through in answering a request someone makes
During the first few minutes, the investor had mentioned of you. You can show a candid amount of honesty and vul-
o
that he and his wife were preparing for an anniversary trip nerability about the weaknesses of your venture and how
in the Mediterranean. Having known about the area the you are planning to tackle them.
investor mentioned, Loomis asked what hotel they were All of these examples create the experience of delight in
y
staying at. Loomis didn’t recognize the name, but he wrote the recipients because they don’t expect them. Going be-
it down in his notes after the meeting. Weeks later, Loomis yond someone’s expectations is at the core of delight and
p
remembered that their anniversary was in a few days. As a the guiding principle for founders hoping to delight others.
gesture of kindness, he had an assistant contact the hotel We focus on four key actions that are likely to delight the
o
to send a bottle of wine to the investor’s room with a note. people you meet with: following up immediately, sending
Then he forgot about it. A month later, he got a letter from a handwritten thank-you note, giving a thoughtful gift,
the investor in the mail with one sentence: and making specific offers of your network or resources in
C
“I’m in for $250,000, thanks for being so thoughtful.” ways that benefit others.
$100 well spent.
t
Thoughtfulness expressed through acts of gratitude is
one of the rarest and most powerful characteristics an en-
o
trepreneur can possess. Handwritten letters, a small but
personal gift, or just doing what you say you will are so out
of the ordinary in today’s culture that they surprise and
N
delight people—sometimes so much so that it motivates
people to act.
The third step in the friendship loop—delight—is a
o
founder’s opportunity to demonstrate their sincere interest
in the person they meet with, not just in what they can get
from that person. There are an infinite numbers of ways to
D Delight | 205

s t
Follow Up Immediately
Po
r
After every meeting, send an e-mail with anything you mentioned or promised during your time together as well as a
clear next step for the relationship. Doing what you said you were going to do can be a significant way to delight someone
o
who is used to false promises.
E-mail Script: Following Up
Hi Jason—
py
Subject: [Startup Name] Follow-up meeting 12/11
o
Thanks for your time just now. Your feedback on how to expand our
Begin with gratitude and
distribution was incredibly helpful.
something personal.
C
Just for reference, here’s a bit about what we are doing—[insert elevator
Add standard boiler-
plate pitch.
pitch here].
Include pitch deck.
o t
I’ve updated our investor deck; I’d love to get your feedback on this.
Here’s the link: [link]
I’d love to keep you updated on our progress. I’ll follow up every couple of
weeks to update you on what we’ve done.
N Thanks,
—Evan
Cofounder & CEO

s t
Send a Handwritten
Thank-You Note
Po Letterpress. If you really want to go over the top, you can
have your own stationery made by letterpress. It will cost
you more, but you’ll get that classy, Old World feel of em-
r
bossed letters.
o
We live in a digital world, but we are analog creatures. Brands
Considering the bombardment of electronic messages, the • Crane.com
most powerful way you can convey appreciation and intent
• Americanstationery.com
y
is through a handwritten note. Far from being outdated,
handwritten letters have become even more important as • Papyrus.com
p
more and more of our lives are digitized.
• Smythson.com
• neimanmarcus.com
Types of Material
Correspondence cards. Look like thick postcards with your
C
name at the top. They are usually around four by six inches
and work beautifully for follow-ups and thank-you notes.
o • feltapp.com
• hellobond.com
o t
Fold-over cards. Great for following up also. Fold-overs
sometimes provide you with more room to write, so if you
have big handwriting, you might consider them.
Give a Thoughtful Gift
If you listen closely, you can uncover small details about a
N
Letter sheets. Letter sheets should be used for more inti- person’s life and interests that can clue you in to ways to
mate communication—a letter to a close friend on a special delight him or her with a thoughtful gift. Important events
occasion, for instance. Don’t use them for new connections like birthdays and anniversaries, hobbies and interests,
o
or as thank-you cards; you’ll run out of things to say way and personal causes can all be opportunities to offer some-
before you’ve filled up enough of the page. thing that will be very meaningful. Gifts surprise, disarm,
D
Delight | 207
8/23/15 7:08 AM
s t
and encourage reciprocity. They help level the playing field
between you and the person you are asking something
from. What can you send, give, or do for the people you
Po Make Specific Offers

of Your Network or
r
meet with that would wow them? It ought to be personal,
something that makes the person feel known and valued.
Resources
Ideas for Delighting with Something
Unexpected, from Vague to Personal
• Breakfast, lunch, or dinner
y o One of the more surprising discoveries of life during the

road show is that you have something to offer to the people
you meet. Each time you move through the friendship
p
loop, your social graph expands exponentially. Those new
• A copy of your favorite book
connections give you access to new kinds of information
• Wine
o
that can be useful to those you meet. So, offer it to them.
Pay attention to the goals and needs and find specific re-
• Cigars
sources—news articles, events, or books—that you can
C
• Gift card to a favorite restaurant send their way.
• Tickets to the opera

• Tickets to a sporting event
o
• Tickets to their favorite band
t
• Donation in time or money to a cause they support
N

s t
13 Po
Invite or
py
“Who’s coming with me?”
—Jerry Maguire
C o
t
• How to make an ask
• The different types of asks
N o • Types of investment asks

• Notes on closing
D o | 209

s t
All right, here’s the setup: I’m an
angel investor that you’re pitching
Po Some of these people would sit
down, and if they liked what I was
r
and it’s pretty clear that I’m doing, they would make as many as
interested and the meeting’s about ten intros for me—very generous.
ready to be done. Close me. You
just see people try all kinds of
random shit. They just don’t know
y o It makes a strong impression when
someone goes out of their way to
help you.
how to handle that situation.
—Jason Seats, Managing Director,
Techstars, Austin
o p —Francis Pedraza, Founder of Everest
t C
N o

s t
“It sounds like this is something that you could be
really interested in, can we count you in for this
round?”
Po that could ever happen to an investor is the opportunity to

invest in your venture.
This isn’t false bravado. Every investor knows that the
r
odds are against the startups he or she meets. What inves-
“Would you be willing to come on as one of our
tors want—what they spend their careers seeking out—are
advisers?”
o
offers from passionate entrepreneurs who believe they are
“Is this something you would be interested in building ventures that will change the world.
investing in?” The final step of the friendship loop—invite—is the art
y
of making those offers. This step is rooted in a deep con-
“Does anyone come to mind who could be helpful
viction that what you are asking for will make the person’s
here?”
p
life markedly better. It is literally an invitation, a way to
say “I think you’re really going to like this” and “let’s do
o
Few people like feeling needy. Asking people for things something amazing together.” To invite others into your
rubs against our delusion of self-reliance like sandpaper venture, you must first decide what your invitation will be.
on eyeballs. And nothing gets most founders more un- Then, you must break down that invitation into the very
C
comfortable than having to ask people directly for money. next step that the person needs to take. Lastly, and this is
All of your personal baggage about money will surface going to sound a little silly, you must script your invitation
t
the moment you start asking people for it. Suddenly, your and practice it so that, when your nerves start going hay-
parents’ nagging words about finances start replaying in wire, you won’t back out or do something bizarre.
o
your head. All the doubts about the venture that you’ve
been suppressing force their way up. You’ve been playing
entrepreneur long enough; it’s time to get a real job. People
N
think you’re an idiot. You’re wasting your reputation.
What makes “the ask” so awkward for most people? Is
it the fear of rejection? Of looking stupid? The fear that—
o
deep down—the venture isn’t worth anything and isn’t
going anywhere? Here’s the truth: if you really believe in
your venture (and we trust that you do), then the best thing
D Invite | 211

s t
How to Make an Ask
Po Break the Invitation Down into the
Very Next Step
What happens if the person says yes? As obvious as that
r
question seems, many founders forget to take the time to
Decide What Your Invitation Will Be answer it. Words like “partner,” “advise,” and “invest” are
o
Your invitation will depend on which stage of the venture ambiguous; doing them requires a series of much smaller
you are in and who you are talking to. Early on, you may and concrete actions.
want only to keep someone in the loop—an invitation for Chip Heath and Dan Heath discuss the principle of
y
someone to follow your progress through periodic e-mails clarity in their book, Switch: How to Change Things When
or meetings. It’s not uncommon to find a cofounder or Change Is Hard. Ambiguous goals, they say, are very
p
key partner during this process. You may invite someone difficult to accomplish. By breaking down your invitation
to join a formal board of advisers, a group of experts you into the very next action that you want a person to take,
o
learn from and consult for wisdom on difficult decisions you make it much more likely that he or she will do it. We
and problems to help you set the right course for your ven- discuss the process of closing investors in detail in the
ture and sometimes serve as a pool for eventual investors. next section.
C
Finally, you can give the big ask: to invite someone to in-
vest a specific amount into your venture.
t
As you consider your invitation, answer the following
questions:
o
• What do you want from the person?
• What are you offering him or her in return?
N
• What will you do together?

s t
Script and Practice
Your invitation
Po Tell Investors Exactly What You’re Looking For
How much money do you need? How many people are you
r
looking to raise money from and at what levels? What do
you want from them specifically?
o
Why does nearly every entrepreneur know that he must
practice the first thirty seconds of his pitch but never
thinks to practice the last fifteen? Memorize what you
Make Investors the “Missing Link”
y
plan to say when you come to that moment of truth. As People want to feel as if their contribution has a large im-
you script the kinds of invitations you make, it’s helpful to pact. If you can present what you need in a way that makes
p
keep in mind a few things. their contribution seem like the final piece of a great op-
portunity, they’re much more likely to give.
Ask Investors a Question

As obvious as it seems, people often fail to make a clear
C
and direct ask. It will feel awkward, but if you don’t put
people on the spot and ask, “Can we count you in on this
o Surface the Contingencies
The Techstars team teaches their entrepreneurs that if an
investor is interested, he is “in,” barring some contingency.
t
round for [x] dollars?” you’re in danger of getting a lot of By directly asking an interested investor what it would
fake yeses. You’ll be tempted to leave it at “Well, thanks for take for him to be 100 percent certain he is in, you give
o
listening. Just think about it and let us know . . .” This is a him permission to talk explicitly about his hesitations and
terrible strategy. They will never call you back. give yourself the opportunity to address them.
The time to ask is when they are in front of you and your
N
goal is to get them to say out loud, “Yes, I’m in for $x.” In
many cases, investors won’t even know (or ask) about the
Let Investors Break the Silence
valuation or deal terms. For many, it simply doesn’t matter. Part of making it easy to say yes is making it difficult to
o
say no. Don’t make it easy on them by filling in the silence.
Once you’ve made the ask, do what a friend advised us:
pause and take a long, slow sip of water.
D invite | 213

s t
The Different
Types of Asks
Po High
r
Lead your round
Questions to Ask Yourself
Level of Commitment
Invest
y
Where am I in my road show? Are you one or two signa-
tures away from finishing the round, or are you hoping to
p
get that first signature? You will need to frame your ask
around the phase you are in.
At what level do you want this person to invest? Do you want

her to lead the round? How much money can she reason-
C
ably invest, based on the types of deals she has done in the
past? Decide on a specific number, like $50,000, $250,000,
o Join your advisory board
t
or $1 million. Stay updated
o
Is this person really interested? What kind of questions is
he asking? Has he been engaged, nodding his head, or has Low
his body language cooled? By the time you ask for money,
N
you should have a good idea of the investor’s interest level.

s t
DEEP DIVE
Updates Po Venture Spotlight
Deena Varshavskaya, founder and CEO of Wanelo, shared
r
with us her experience of sending updates to current and
potential investors.
You will want to invite almost every person you meet to

keep updated on your progress through periodical update
e-mails. These updates are usually monthly or bimonthly,
and they follow a straightforward pattern: what you’ve
y o What I would do is I would start sending e-mail up-

dates to investors, and I would include the number of
monthly uniques in the subject line. When I started
fundraising, I was at 100,000 monthly unique visitors.
p
done, what you’re planning to do, and the needs and ques- When the first money hit the bank, we were close to a
tions you’re facing right now. Keep these e-mails brief and million.
I think sending those updates with nothing but
o
only include information you would be OK with publish-
ing. We’d recommend creating separate update e-mails for the monthly uniques in the subject line was really
committed investors or advisory board members, where helpful . . . Shortly after I got my first investor, Ann
C
you can include a bit more detail. Miura-Ko at Floodgate responded to my latest monthly
Make sure to explicitly ask people before you start send- uniques update and said that she was interested in
t
ing them updates; don’t just add them to some massive leading the round.
e-mail list. At the end of the meeting, ask them, “Would
o
it be OK if I kept you updated on our progress every few
weeks?” Most people genuinely will want to know how
things are progressing.
N
D o Invite | 215

s t
Script for Progress Updates
Po
r
Thanks to Austin health care startup Filament Labs for letting us use their newsletter for this script:
Only the recipient’s

name should be visible.
Use an e-mail service
y o
Subject: Filament Labs Update—Building Momentum
Specific subject line that
includes the name of the
p
company. This may be
like MailChimp to
the only thing they read,
send updates or bcc Dear Filament Labs Investors, Advisors, and Friends: so don’t waste it.
everyone so you don’t
o
share others’ e-mail Techstars is now complete, but we’re just getting started. ;) You can watch
addresses.
Jason’s Demo Day pitch here, and check out the press that resulted. “Scannable” formatting
C
Very clear asks Needs
Investor intros. Looking for strong angels in health care and SaaS. We love
o t
Austin-based investors.
We’re hiring! Looking for two strong iOS and Android developers to join our
team as #4 & #5, respectively.
N
Updates
Fundraising is on a roll ($150k+ in new commitments). We’re on a road

show toward $500k, with $125k already closed, and $150k+ in new
o
commitments since our last investor update e-mail. In addition, Dr. Neiman—
Links for people to dig in
a doctor from one of Corinthian’s clinics—is interested in joining our seed
more if they want to
round in a meaningful way.
D 216 | GET BACKED

s t
Filament named to Austin’s A-List.
Po
CNN named us one of the Top 5 Austin Startups to Watch.
or
SXSW and the Austin Chamber of Commerce named us one of the 5 hottest
emerging startups in Austin for this year.
UofM invited Jason to tell his story to 400 students.
The University of Michigan invited Jason to tell his entrepreneurial story to
y
400 students at their ENTR 407 class last week. This is the same class that
hosted Jim McKelvey (cofounder, Square), and Tony Fadell (founder, Nest).
Check out the video!
p
o
Pitch and investor materials
Filament Labs is building a patient engagement platform, giving health
C
professionals tools to manage their patients when they are away from the
clinic. We specialize in patient compliance around chronic disease, with an
initial focus on the infusion and dialysis space, a 14,000 clinic/$27B market.
o t
By early Q1, we will power patient engagement for 20 clinics nationwide.
Our first customer is also an investor, with strategic involvement from a large
specialty pharmaceutical supplier.
Filament Labs is a Techstars Austin ’13 company. Filament’s founders have
N
previous exits to WebMD, Expedia, and Rev Worldwide.
Download our investor deck and executive summary, and follow us on
o
AngelList.
Health care fact: Dr. Willem Kolff, a Dutch physician, constructed the first
working dialyzer in 1943 during the Nazi occupation of the Netherlands. Due
D Invite | 217

s t
Po
to the scarcity of available resources, Kolff had to improvise and build the
initial machine using sausage casings, beverage cans, a washing machine,
and various other items that were available at the time.
Jason, Colin, and Brian
or
As always, incredibly grateful for your continued time, interest, and advice,
py
C o
o t
N

s t
Types of
Investment Asks
Po 3. Working with People You Like
Scenario: You sense a strong amount of interest from
r
someone who values impact as much as financial gain.
Script: “Hey, I really like you guys. I think we’ve got a
o
Your ask is a tailor-made request, targeted at the individual great opportunity. Why don’t we do something amazing
you are talking to and based on where you are in the fund- together?”
ing process. Consider these five types.
1. Testing the Waters

Scenario: You’re not yet ready to raise money. You are con-
py 4. Hard Charger
Scenario: You have limited time with a decisive, high-value
prospect.
o
cerned about gauging an investor’s interest and building Script: “I’ve got a big ask for you. Will you invest $1
the relationship for further down the road. million?”
Script: “We’re going to be looking for investors. Is this
C
something you’d be interested in when we’re ready to raise
capital?”
5. Momentum
t
Scenario: You are more than halfway to funding your cur-
rent round.
2. Partnership
o
Script: “We’ve already succeeded in finding much of
Scenario: The potential investor’s expertise is just as valu- the funding we need. There are still a few spots left. I’d love
able as his or her money. for you to close us out. Can I count you in for $1 million?
N
Script: “It’s clear you have a passion and expertise in
this industry. You are exactly the type of partner we will
need. Will you consider joining me?”
D o Invite | 219

s t
Notes on Closing
Po Due Diligence:
What Needs to
The Elements of Closing
These are the basic elements of most closes. Keep in mind
that not all investors will require you to move through
each of these hoops. Some may just want to know where to
or Happen before I
Can Close?
y
wire the cash.
The due diligence process changes with every investor,
p
Verbal “yes.” An investor tells you he or she is in. but there are a few common areas you should pay atten-
tion to.
o
Term sheet. You receive a term sheet—a document out-
lining the basic terms of the agreement. VCs will always
give you a term sheet, some angels will, and other funding Legal and Accounting
C
sources will have different ways of outlining the agreement. From a legal and accounting standpoint, you’ll need to
make sure you have completed the following steps be-
t
Due diligence. The investor (and you, if you’re smart) goes fore you enter a closing conversation. Of course, as with
through a formal process of research. anything law-related, you should always consult a lawyer.
o
(In other words, this is not legal advice, we’re not lawyers,
Signatures and money transfer. You sign the final docu- don’t sue, so on and so forth.)
ments and the investor transfers money to your account.
N Incorporate as a Delaware C corporation. The short an-

swer for why you should be a Delaware C is that investors
prefer it.

Handle post-incorporation issues. Specifically, set up your
articles of incorporation, bylaws, vesting schedules, and
intellectual property assignment.

s t
Collect any tax filings and past financial statements, if you
have been a company for more than a year.
Get a startup lawyer. Ask the people you meet with which
Po Your Due Diligence

on the Investor
lawyers have good reputations with entrepreneurs in your
city. A few big firms are Wilson Sonsini Goodrich & Rosati;
Walker Corporate Law Group; and DLA Piper.
or Due diligence goes both ways. Here are some tools and
questions to answer as you research a potential investor.
Due Diligence Documents

You’ll want to gather the following documents.
Financial history. Previous tax filings and any historical in-
py Places to Research
• LinkedIn
• Gust
come statements.
Articles of incorporation. The proof that you are an official

business.
C o • AngelList
• Quora
t
Bylaws. A legal document that describes how decisions Questions to Ask Investors
are made in the venture.
Tell me about a time when a relationship with an entrepre-
o
Org chart. A list of everyone employed in your venture, the
roles they play, and who they report to.
N
Financial model. Twelve months to three years of future
revenue and expense projections, along with the assump-
tions those projections are based on.
neur you invested in went sour. What happened?
Questions to Ask Their Portfolio Companies

Would you take money from him or her again? What’s the
biggest asset they brought to the table other than money?
D o Cap table. How the ownership pie of the venture gets

split up—a table with a list of owners and the shares each
owner has.
Invite | 221

s t
Signatures and Money Transfer
Po
r
This is the simplest part of the entire fundraising process. Your lawyer will draft the documents you need to sign; you
can upload them to an electronic signing service like HelloSign or DocuSign, create a business bank account (if you don’t
o
already have one), and send the wiring instructions via e-mail, along with the links to the documents.
y
Dear Jason,
Please see below for the wire instructions and signature page to sign
p
Two ways to sign
(attached). I will also send a way to sign electronically in case that’s easier.
o
Clear, simple wiring Wire instructions:
instructions Wire Account info: Something Ventures
Account #: 123456789
C
123 America Drive, Omaha, Nebraska
Bank info: Silicon Bank
o
Request for
confirmation
t
ABA/Routing #: 1234567 / Swift code: SVB020
2000 Toman Drive, Los Angeles, CA 91500
Please let us know when the $50,000 wire is sent from your end, and we will
confirm upon receipt. Thanks for your support!
N Best regards,
Evan

s t
Conclusion Po I have always been passionate about changing the world
around me—bringing it into conformity with a vision for
society in which more people flourish. For much of my
r
youth, that passion was expressed through law and poli-
tics. Everyone I saw on television who was talking about
o
“the world around us” was a lawyer or politician. So I fol-
lowed what I knew and headed into debate and law with an
aspiration for politics and public policy.
y
by Evan Baehr I joined the Woodrow Wilson School of Public and In-
ternational Affairs at Princeton, worked at major think
p
tanks, the White House, and the United States Congress.
And what I saw in front of me was decades of “paying your
o
dues,” slowly working your way into more and more influ-
ence in a system based on seniority and who you know
rather than excellence and creativity. The system I was
C
part of exerted tremendous influence on society, but I had
no agency in it.
t
Along the way I met a fascinating man named Peter
Thiel, with whom I went on to launch a company. His world-
o
view and life experience taught me that entrepreneurship
is a valid and, arguably, preferable means to change so-
ciety. Twenty years earlier, Peter had shared many of the
N
passions I had; as an undergraduate at Stanford, Peter had
founded The Stanford Review, the sister publication to The
Princeton Tory, the paper I edited as a senior. Peter went
o
on to law school but soon developed a passion for entre-
preneurship and technology, going on to found PayPal and
later invest in and build Palantir, Facebook, SpaceX, and
D
Airbnb—companies that radically transformed society.
| 223
8/23/15 7:08 AM
s t
Each of these companies began with a vision for trans-
forming society by asking:
Po is a huge challenge to bring others alongside this idea, ini-

tially as conversation partners to give feedback and later
as partners. Entrepreneurship is the act of cultivating and
r
• What can we do to stop the bad monetary policies harnessing resources to bring an idea to fruition, ideally in
of the Federal Reserve? Create an international a scalable, profitable business model.
o
currency (PayPal). Entrepreneurship is more than a mere presentation
of facts. After all, nothing happens in the world without
• What can we do to accelerate human exploration something first being sold. And the most effective way to
and discovery of space? Create a better, faster way to
y
sell—whether recruiting employees, raising investments, or
launch rockets (SpaceX). acquiring customers—is to tell a story. This is why I fell in
p
• What can we do to break the unionized taxi com- love with pitch decks.
missions that have created a horrible transportation Pitch decks are the initial how of entrepreneurship; they
o
experience? Let anyone be a driver (Lyft). provide the context, framework, and narrative for how you
marshal resources beyond your control—resources like
• What can we do to stop terrorist attacks on the funding, feedback, and, most importantly, relationships.
C
United States? Build world-class data analysis and Recruiting and harnessing resources beyond our imme-
visualization technology based on antifraud online diate control is the what of entrepreneurship. Pitch decks
t
payments algorithms (Palantir). are the beginning of the how. And profoundly transforming
the society around us so that we may more deeply flourish
o
Earlier in my life, I would have offered very different is the why of entrepreneurship. And, if you accept its invita-
answers to those questions, including run for office, write tion, you are its who.
a white paper, publish a book, lobby congress, and so on.
N
I now believe that entrepreneurship is a more effective
way to transform society, more thoroughly and more
quickly.
o
A classic definition of entrepreneurship is “marshaling
resources beyond your immediate control.” During the first
minutes of a new idea, you are alone with it. In front of you
D 224
| Conclusion
8/23/15 7:08 AM
s t
Bringing Ideas to Life
Po achievement, and who at the worst, if he fails, at least
fails while daring greatly, so that his place shall never
be with those cold and timid souls who neither know
r
Launching a venture is about attempting, often against victory nor defeat.
great odds, to create the future of which you want to be
o
part. It’s extremely difficult to do that without cash. It’s See you in the arena.
impossible without relationships. We believe deeply that
entrepreneurship is a social good. Entrepreneurs hold the
y
keys to innovation, new job creation, and deep, personal
fulfillment. That is, if they are courageous (or should that
p
be crazy?) enough to give it a try.
There’s a good chance you’ve already been crazy enough
o
to try or plan to be very soon. As we think about the ups
and downs of our own journeys, the triumph and defeat,
the words of President Teddy Roosevelt have consistently
C
reminded us of what we believe to be most true.
t
It is not the critic who counts; not the man who points
out how the strong man stumbles, or where the doer
o
of deeds could have done them better. The credit be-
longs to the man who is actually in the arena, whose
face is marred by dust and sweat and blood; who
N
strives valiantly; who errs, who comes short again
and again, because there is no effort without error
and shortcoming; but who does actually strive to do
o
the deeds; who knows great enthusiasms, the great
devotions; who spends himself in a worthy cause;
who at the best knows in the end the triumph of high
D
Conclusion | 225
8/23/15 7:08 AM
s t
Po
or
py
C o
o t
N
D o

s t
Index
Po Able Lending, 74–77
accelerators, 154, 157
Ackerson, Pete, 130
scripting and practicing,
213
types of, 214
r
acquisition strategies, 36 assumptions
active voice, 67 articulating in pitch
o
advisers, 167 decks, 14
in team decks, 32–33 in financial models, 31
Airbnb, 157, 223–224 in industry stories, 47
y
Allis, Ryan, 82 testing/iterating critical,
ambiguity, 19, 212 11–12
p
analogies, in elevator traction slides on, 24
pitches, 18 Avallon, Jeff, 165, 190
o
Andersen, Fred, 176
angel investors, 1, 10, 148,
154, 158–163 background profile tem-
C
AngelList, 3, 159–161, plate, 195
194, 221 background slides, 37
t
Appio, Helen, 43–44 The Back of the Napkin
Arison, George, 118 (Roam), 62
o
Aristotle, 173 Baehr, Evan, 74, 180
articles of incorporation, balance sheets, 31, 35
220, 221 Ballard, Jason, 130
N
The Art of Game Design Band, Zvi, 86
(Schell), 199 beachhead markets, 27
asks, 34, 209–222 Beacon, 78–81
o
closing, 220–222 beaming review pitch, 138
how to make, 212 Beekman, Jonathan, 110
progress updates after, Bieber, Justin, 47
D
215–218 binding, 72
Invite | 227
8/23/15 7:08 AM
s t
biographies, 32
Blah, Blah, Blah (Roam), 62
Blakely, Dave, 167
play in, 199–200
bullet points, 22, 54, 55
burn rate, 31
Po charts, 62
Chegg, 179
Chi-Hua, Chien, 144
showing, 196
in teams, 32
Connect, 82–85
r
Blank, Steve, 11 Burt, Ronald S., 177 Christensen, Clayton, 27 consistency, in financial
blueprints, 37 Business Model Canvas, 37 CircleUp, 156 projections, 30
o
body language, 141, 192, business models clarity Contactually, 18, 86–89
193, 214 improving by committing from good design, 54 Contee, Caen, 82
boldness, 17 to paper, 14 in overview slides, 17 context, 10, 30, 34, 224
y
Bono, 167, 175–176 in pitch decks, 10 in text, 67 for data visualizations, 61
Boosted Boards, 204 slides on, 29–30 in use of funds slides, 34 writing style and, 66
p
bootstrapping, 146 business plans, 11–12, 13 Clarity.fm, 174, 190 contingencies, 213
borrowing money, 146 business processes, 28 close-ups, 60 controversy, 193, 200–201
o
Borsje, Stefan, 106 bylaws, 221 closing, 220–222 cost breakdowns, 30
branding slides, 35 clusters, in social cover slides, 16
breakeven points, 31 graphs, 178 Cozzens, Cory, 78
C
building relationships, 169, Campbell, Joseph, 42, 43 Coats, Emma, 137–138 crash points, 59
170, 189–201 capital, types of, 4 coffee shop pitch, 140 Creative Commons, 60–61
t
finding commonalities capital tables, 221 color.adobe.com, 59 Creative Market, 61
and, 197–198 Cappaert, Tony, 86 color use, 54, 55, 58–59 Crowdfunder, 147, 156
o
first impressions in, Carbonella, Jeff, 86 commonalities, finding, crowdfunding, 10, 147,
192–193 case studies, 37 170, 195, 197–198 154, 156
handling objections cash flow statements, 31, 35 competition slides, curiosity, 199–200
N
of, 201 Cassanego, Tony, 90 28–29, 37 customers
homework for, 194–195 charity: water, 39–41 competitive advantages, acquisition stategy
listening and asking customer stories of, 43–45 28, 29, 37 for, 36
o
questions in, 198–199 industry story of, 45–47 conclusion slides, 38 costs to acquire, 30, 31
openings for, 195–197 origin story of, 40–43 confidence describing, 25
perspective taking in, venture growth story of, asks and, 211 differentiating, 26
D 228
192–193
| iNDeX
47–49 industry stories and, 46 in elevator pitches, 18

s t
financial projections
on, 30
lifetime value of, 36–37
elements of, 54
format in, 68
images and photography
Po Duarte, Nancy, 50–51, 53,

56, 57, 61
due diligence, 12, 159, 160,
equity-based crowdfund-
ing, 156
equity financing agree-
r
pitch decks for, 10 in, 54, 59–61 220–221 ments, 149–151
quotes by, 37 importance of, 53–54 DuPont, 11 establishing shots, 59–60
o
segmentation of, 26–27 layout in, 54, 56 Everest, 167, 175–176, 210
solving problems of, 17, 18 product design/blueprint executive summaries, 35
storytelling about, 21, slides, 37 Eisner, Michael, 69 exit slides, 37
y
43–45, 52 typography in, 54, 57 elevator pitches, 17, 18 exit strategies, 37
traction with, 23–24 what not to do in, 54 e-mail scripts, 4 Eyerly, Wade, 78
p
use cases for, 22 what to do in, 55 for building trust, 183
customer slides, 25–27 Diamandis, Peter, 167 for following up after
o
differentiation meetings, 206 Facebook, 223–224
from competitors, for introductions, Farnsworth, Reed, 78
Dastoor, Sanjay, 204 28, 29 184–186, 187 feedback, 4, 35, 156
C
data visualizations, 54, of customers, 26 empathy, 21, 192 e-mail script for, 183
55, 61 slides on, 36 employees handling objections
t
Davis, Will, 74, 180 Disney, 69, 199 recruiting, 10 and, 201
Death to the Stock Photo, DocSend, 90–93 training in PowerPoint, 12 Feld, Brad, 149
o
60–61 docsend.com, 72 entrepreneurs and figures of speech, 67, 68
debt, 146 Dorsey, Jack, 47 entrepreneurship Filament Labs, 216–218
Delaware C corporations, Dos Equis, 196 definition of, 224 financial history, 221
N
220 Dropbox, 157, 180 difficulty of, 225 financial literacy, 30
delighting investors, 171, drunk Hemingway numbers of, 3 financial models, 31, 221
203–208 pitch, 139 as problem solving, 21 financial projections, 29–30
o
design, 53–63 dry runs for pitches, serial versus first-time, First Opinion, 94–97
color in, 54, 55, 58–59 140–141 3–4 500 Startups, 157
data visualizations in, d.school pitch frameworks, as storytelling, 39–52 Floodgate, 179, 190
D 54, 61 137–139 equity, selling, 147 flowcharts, 63
INDEX | 229

s t
following up, 187, 206
fonts, 54, 57
format of text, 65, 68
equity financing agree-
ments and, 149–151
four ways of, 146–147
Po Gaal, Robert, 106

gifts, 205, 207–208
GM, 11
Heddleston, Russ, 90
hero’s journey stories, 42,
43
r
founders, common mis- from friends and family, Goldsmith, Jonathan, 196 The Hero with a Thousand
takes by, 74, 78, 82, 86, 10, 155 Gong, Sam, 110 Faces (Campbell), 43
o
90, 94, 98, 102, 106, 110, friendship loop in, 167–171 go-to-market strategy, 37 Hinge, 102–105
114, 118, 122, 126, 130 friendships in, 5 Graham, Kevin, 130 history slides, 34, 37
Freight Farms, 98–101 history of for startups, Graham, Paul, 12–13, 149, hockey-stick graphs, 24
y
frequently asked questions 10–13 174 Hopkins, Adam, 176
(FAQs) slides, 34, 201 introductions in, 173–187 gratitude, 196–197, 205 how it works slides, 36
p
Friedman, Jonathan, 98 learning skills for, 4–5 gridlines, 56 hue, 58
friends and family, funding primer on startup, growth plans, 36
o
from, 10, 155 145–152 growth stage, 154
friendship loop, 167–171, 177 questions to ask Gust, 221 iContact, 82
friendships, 5 before, 166 IdeaPaint, 165, 190
C
building with investors, rounds in, 148–149 IDEO, 167
191 snares in, 168 haiku pitch, 139 imagery, 67, 68
t
leapfrogging with, 184–187 sources for, 153–171 hard charger asks, 219 images and photography,
social graph of, 175–178 through borrowing, 146 Harrison, Scott, 39–41 35–36, 54, 58, 59–61
o
fundraising, 5–6 through donations, 147 customer stories of, 43–45 as backgrounds, 61
from accelerators, 154, through profits, 146 industry story of, 45–47 charts, 62
157 through selling equity, origin story of, 40–43 five ways of showing,
N
from angel investors, 1, 10, 147 venture growth story of, 62–63
148, 154, 158–163 types of capital in, 4 47–49 flowcharts, 63
creating connections and, unexpected miracles in, 5 Haughey, Chris, 126 maps, 62
o
45–47 from venture capital Haughey, Will, 126 portraits, 62
crowdfunding, 10, 147, firms, 10, 12, 148–149, Heath, Chip, 212 resolution of, 61
154, 156 154, 164 Heath, Dan, 212 stock, 60–61
D 230 | INDEX

s t
timelines, 63
types of, 59–60
improvisation, 193
investment banking,
12, 146
investment highlight
Po handling objections
of, 201
importance of design to,
jargon, 67
Jedi Mind Trick exercise,
136
r
income statements, 31, 35 slides, 35 53–54 JOBS Act of 2012, 10, 156
incorporation, 220 investors, 153–171 intriguing with elevator Johnson, Steven, 177
o
Indiegogo, 10, 147, 156 accelerators, 154, 157 pitches, 18 judgment, demonstrating
industry descriptions, angel, 1, 10, 148, 154, introduction to, 173–187 sober, 29
19–20 158–163 listening to, 198–199
y
industry knowledge, 28 asks to, 34 name and needs lists on,
industry stories, 45–47, 52 building relationships 180–181 Karma, 18, 106–109, 200
p
Ingersoll, Minnie, 118 with, 169, 170, 189–201 openings with, 195–197 Keynote documents, 72
intellectual property, 28 controversy and, 193, perspective taking by, Kickstarter, 10, 147, 156
o
interactive demonstrations, 200–201 192–193 King, Greg, 2, 5
22 crowdfunding and, 10, 147, playing with, 199–200 Knutson, Morgan, 118
introductions, 169, 170, 154, 156 risk aversion of, 11 Koslow, Dave, 90
C
173–187 delighting, 171, 203–208 in team decks, 32–33 Kristof, Nicholas, 46
creating great, 187 demonstrating traction venture capital, 10, 12,
t
e-mail scripts for, 183, to, 24 148–149, 154, 164
184–186, 187 doing homework on, invitation, in the friendship LaunchPad, 137–139
o
following up after, 187, 194–195 loop, 171, 209–222 LaVoy, Anima Sarah, 82
206 due diligence on, closing on, 220–222 lawyers, 221
knowledge/relationship 220–221 planning, 212 layout, 54, 56
N
gaps and, 180–181 finding commonalities progress updates after, Lean Canvas, 37
leapfrogging, 184–187 with, 170, 195, 197–198 215–218 The Lean Startup (Ries), 11
luck surface area and, friends and family, 10, scripting and practicing, leapfrogging, 184–187
o
179 155 213 learning, 35
social graphs and, 175–178 friendship loop and, types of, 214, 219 Lee, Paul, 13
trust building in, 182 167–171 irony, 18 Leep, Tommy, 174, 179, 190
D
INDEX | 231
8/23/15 7:08 AM
s t
legal issues, 220–222
Levitt, Ted, 18
LinkedIn, 221
Martell, Dan, 174, 190
McCandless, David, 55
McCloud, Scott, 53
Po obituary pitch, 138

objections, handling, 201
Ohler, Christian, 118
passive voice, 67
patent slides, 35
PayPal, 223–224
r
liquidation preference, 150 McClure, Dave, 159 opportunity analysis, 11–12, PDFs, 72
listening, 198–199 McDaniel, Michael, 114 26–27, 177 Pedraza, Francis, 167, 175–
o
location slides, 36 McLeod, Justin, 102 opportunity slides, 19–20 176, 177, 210
logos, 16, 58–59 McNamara, Brad, 98 organization charts, 37, 221 perspective taking, 192–193
Loomis, Evan, 130, 191, medium shots, 60 origin stories, 40–43 photography. See images
y
198, 205 meetings, 4 Orwell, George, 67 and photography
luck surface area, 179 Melamed, Zachary, 82 Outbox, 158, 161, 180 picking a fight, 18
p
Lyft, 224 Mendelson, Jason, 149 overview slides, 17 pictures. See images and
Mercy Ships, 41 photography
o
metaphors, 67, 68 Pink, Daniel, 189
Man Crates, 110–113 metrics, 24, 37–38, 78, Palantir, 223–224 pipeline slides, 37
Maples, Mike, 159 102, 122 paper quality, 72 pitch decks, 4, 5
C
maps, 62 milestones, 34, 35 partnerships, 4–5 Able Lending, 74–77
Marcyes, Jay, 94 mission statements, 35 asks, 219 Beacon, 78–81
t
margins, 54 momentum asks, 219 as competitive advantage, benefits of, 12
markets money transfers, 220, 28 building blocks of, 15–38
o
beachhead, 27 222 pitch decks for, 10 business model slides in,
defining, 25 Morley, Ryan, 78 strategic, 37 29–30
opportunity slides on, passion common mistakes in, 74,
N
19–20 clarifying, 13–14 78, 82, 86, 90, 94, 98, 102,
problem slides on, 21 networks, 28, 159–161. See origin stories and, 43 106, 110, 114, 118, 122,
served addressable, 27 also introductions in overview slides, 17 126, 130
o
sizing, 26–27 offering access to, 208 in pitch decks, 10, 13–14 competition slides in,
total addressable, 26–27 social graph of, 175–178 in storytelling, 50–51 28–29
market slides, 25–27, 34 Newsle, 194 in team slides, 32 Connect, 82–85
D 232 | INDEX

s t
Contactually, 86–89
cover slides in, 16
customer/market slides
sending, 72
Shift, 118–121
SOLS Systems, 122–125
Po Pixar pitch, 137–138

Playbutton, 174
playing, 199–200
profits, raising money
through, 146
progress, demonstrating,
r
in, 25–27 solution slides in, 22–23 “Politics and the English 34
definition of, 10 storytelling in, 12 Language” (Orwell), 67 after asks, 215–218
o
designing, 53–63 team slides in, 32–33 portraits, 62 scripts for updates on,
digital, 72 Tegu, 126–129 post-money valuation, 150 216–218
DocSend, 90–93 templates for, 4 PowerPoint, 12, 72 in venture growth
y
examples of, 73–133 text in, 65–72 pre-money valuation, 150 stories, 49
extra slides in, 34–38 traction slides in, 23–24 presentation decks, 10, 66, prototypes and proto-
p
First Opinion, 94–97 TreeHouse, 130–133 68. See also pitch decks typing, pitch decks as,
Freight Farms, 98–101 updates/versions of, 72 presentation software, 12 13–14
o
Hinge, 102–105 use of funds slides in, pricing, 31, 150 proud grandparent
history of, 10–13 33–34 problems pitch, 138
how to start, 71–72 pitches customer pain from, 23
C
Karma, 106–109 beaming review, 138 in customer stories,
Man Crates, 110–113 drunk Hemingway, 139 43–45 questions, asking, 198–199
t
one-pagers, 72 dry runs for, 140–141 demonstrating what your Quora, 221
opportunity slides in, exercises on, 135–141 company will solve,
o
19–20 haiku, 139 17, 18
overview slides in, 17 obituary, 138 personalization of, 21 rapport building, 32
presentation, 10, 66, 68 one-word, 137 slides on, 20–21 Ravikant, Naval, 159
N
printing, 72 Pixar, 137–138 products Reaction, Inc., 114–117
problem slides in, 20–21 proud grandparent, 138 design/blueprint slides, reading decks, 10, 12, 66,
as prototypes, 13–14 storytelling in, 52 37 68. See also pitch decks
o
Reaction, Inc., 114–117 three-sentence, 139 road maps on, 35 relationships. See friend-
reading, 10, 12, 66, 68 with/without the slides on, 34 ship loop; friendships
rise of, 12–13 deck, 140 profit margins, 31 repeatability, 23
D
INDEX | 233
8/23/15 7:08 AM
s t
Resonate (Duarte), 50–51
revenue, 25, 31, 146
rewards-based crowdfund-
for progress updates,
216–218
scripts for openings, 197
Po Stanford University, 137–139

startup platforms, 4
stock photography, 60–61
team slides, 32–33
technology slides, 38
Techstars, 106, 157, 210, 213
r
ing, 156 Seats, Jason, 136, 210 Stocksy, 61 Techstars Jedi Mind Trick
RGB numbers, 58, 59 Seedcamp, 157 storytelling, 12, 39–52, 71 exercise, 136
o
Rhode, Joe, 69 seed stage, 148, 154, 155, archetypes of, 40 Tegu, 126–129
Ries, Eric, 11 157, 158 arc of, 50–52 templates, 4, 195
risk slides, 36 senses customer stories, 43–45 term sheets, 220
y
road show, 168 design and, 54 elements of great, 49–50 testing the waters, 219
Roam, Dan, 53, 62–63 engaging in storytelling, industry stories, 45–47 text, 65–72
p
Roosevelt, Teddy, 225 49–50 origin stories, 40–43 creating visceral experi-
Rothenberg, Mike, 190 sentence structure, 67–68 sparkline in, 50–51 ences beyond, 69–70
o
rule of thirds, 59 served addressable mar- venture growth stories, format of, 65, 68
kets (SAM), 27 47–49 Orwell’s rules for
Shift, 118–121 structural holes, in social writing, 67
C
sales funnel slides, 36 Shyp, 18 graphs, 178 voice and tone in, 65,
scalability, 23 signatures, 220, 222 super connectors, in social 67–68
t
Schell, Jesse, 199 SilverCar, 18 graphs, 178, 182 Tevanian, Avie, 176
Schouwenburg, Kegan, 122 simplicity, 28, 61 suppliers, pitch decks thank-you notes, 207
o
screenshots, 36 slide:ology (Duarte), for, 10 Thiel, Peter, 159, 223–224
scripts 56, 61 supply chain slides, 36 Thomas, McKay, 94
for building trust, 183 Snyder, Blake, 18 Surf Air, 78 thoroughness, 19
N
for following up after social graph, 175–178, 182 Suster, Mark, 194 thoughtfulness, 205
meetings, 206 SOLS Systems, 122–125 swagger, 17 three-sentence pitch, 139
for introductions, 184–186, solution slides, 22–23 Switch: How to Change Tichauer, Adam, 174
o
187 SpaceX, 223–224 Things When Change timelines, 63
for invitations, 213, sparklines, 50–51 Is Hard (Heath & Tisch, David, 106
220–222 spy dry runs, 141 Heath), 212 titles, in cover slides, 16
D 234 | INDEX

s t
tone of text, 65, 67–68
To Sell Is Human (Pink),
189
transfers of, 170, 182, 196
Twitter, 71, 179, 194
typography, 54, 57. See also
Po Varshavskaya, Deena,
4, 215
venture capital, 10, 12, 148–
Williamson, Brian, 130
Winshall, Walt, 136
Wired magazine, 12–13
r
total addressable market text 149, 154, 164 Wish, Joel, 122
(TM), 26–27 Venture Deals (Feld & word choice, 67
o
traction Mendelson), 149 Word documents, 72
slides, 23–24 Unsplash, 60–61 venture growth stories, working with people you
storytelling on, 52 US Department of 47–49, 52 like, 219
y
TreeHouse Home Improve- Defense, 11 vesting, 150 writing style, 65–66
ment, 1–2, 5, 130–133, use cases, 22 vision, 14, 18, 35, 223–224
p
158, 191, 198 use of funds slides, 33–34 voice in writing, 65, 67–68
elevator pitch of, 18 X Prize Foundation, 167
o
trends, 20
trust, 170, 182 valuation, pre-money/ Wall Street Journal, 13
building with investors, post-money, 150 Wanelo, 4, 215 Yanosy, Paul, 130
C
191 valuation slides, 38 Washington, Joel, 118 Y Combinator, 12–13, 149,
e-mail script for building, value proposition, 37, weak ties, in social 157, 174
t
183 44, 82 graphs, 178 “Your Business Plan Isn’t a
first impressions and, van Wel, Steven, 106, Where Good Ideas Come Fundraising Tool Any-
o
192–193 200–201 From (Johnson), 177 more” (Lee), 13
N
D o INDEX | 235

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About the Authors
Po eVAN BAehr is the cofounder of Able, a tech company
committed to growing the “fortune five million” small
businesses around the United States with collaborative,
r
low-interest loans. He’s worked at the White House, a
hedge fund, and Facebook and is a graduate of Princeton,
o
Yale, and Harvard Business School.
eVAN LooMiS loves helping startups launch and raise
y
capital. He heads up Corporate Strategy at Corinthian
Health Services and is the founder of Tradecraft, a consul-
p
tancy for high-growth businesses. Evan also mentors en-
trepreneurs through the accelerators Techstars and Praxis.
o
His first startup was TreeHouse, a first-of-its-kind home
improvement store specializing in performance and de-
sign. Evan also cofounded Wedgwood Circle, an interna-
C
tional angel investment group. Prior to Wedgwood, Evan
worked on Wall Street as an investment banker.
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s t

“Finally, a book by people who have actually done it!

BaehrLoomis_T_rev01.indd 1 9/3/15 5:21 PM

BaehrLoomis_T.indd 2 8/23/15 7:06 AM

BaehrLoomis_T.indd 1 8/23/15 7:06 AM

BaehrLoomis_T.indd 2 8/23/15 7:06 AM

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py No part of this publication may be reproduced, stored in or introduced into

D o Find more digital content or join the discussion on www.hbr.org.

BaehrLoomis_T.indd 4 8/23/15 7:06 AM

As residents of a tumultuous world, we dedicate this

N o And despite the burdens they bore, they often looked

D o —Evan Baehr and Evan Loomis

BaehrLoomis_T_rev01.indd 5 9/3/15 5:21 PM

BaehrLoomis_T.indd 6 8/23/15 7:06 AM

or Part One: CREATE YOUR PITCH

Part Two: GET BACKED

BaehrLoomis_T.indd 7 8/23/15 7:06 AM

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Po ship fundraising; Mike Rothenberg, Founder, Rothenberg

D to dig into his methodology and crack the code on relation-

BaehrLoomis_T.indd 10 8/23/15 7:06 AM

Po private investor and co-owner, San Antonio Spurs; Justin

D former President, Valero Energy Corporation; Bruce Hill,

Po Peter Thiel, whose intellectual rigor demands answers

BaehrLoomis_T.indd 12 8/23/15 7:06 AM

BaehrLoomis_T.indd 13 8/23/15 7:06 AM

BaehrLoomis_T.indd 14 8/23/15 7:06 AM

Po our investors and partners is “This is a great idea. Someone

TEMPORARILY PUT THE BUSINESS IN HIBERNATION. In

Date: Tuesday, November 9, 2010

Subject: TreeHouse Update

Dear Friends and Investors:

or light of a great business concept and potentially bad timing,

py This decision was not reached in haste, or without a lot of

BaehrLoomis_T.indd 2 8/23/15 7:06 AM

BaehrLoomis_T.indd 3 8/23/15 7:06 AM

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Po the future further down the field by surrounding them-

BaehrLoomis_T.indd 5 8/23/15 7:06 AM

Po ing relationships with people who have the power to take

BaehrLoomis_T.indd 6 8/23/15 7:06 AM

BaehrLoomis_T.indd 7 8/23/15 7:06 AM

BaehrLoomis_T.indd 8 8/23/15 7:06 AM

t C • A short history of startup funding

BaehrLoomis_T.indd 9 8/23/15 7:06 AM

D 10 | CREATE YOUR PITCH

BaehrLoomis_T.indd 10 8/23/15 7:06 AM

Po expect the market to value the company when they sell it

The Birth of the Pitch Deck | 11

BaehrLoomis_T.indd 11 8/23/15 7:06 AM

Po out the obviously unqualified prospects and clue them in

D loved the new format, using the short presentations to filter

12 | CREATE YOUR PITCH

BaehrLoomis_T.indd 12 8/23/15 7:06 AM

Po “What if I . . . ?” or “Why isn’t there a . . . ?” or “Wouldn’t

The Pitch Deck as

D sudden, this brilliant idea pops into your head.

The Birth of the Pitch Deck | 13

•  Digital •  Cost to Acquire: $1K