6 Pitch Deck Red Flags 🚩🚩

And what they communicate to investors

It may not always seem like it, but VCs are actively looking to trust you with money to build your startup.

It's the founder's job to derisk that decision for them by building their confidence that they will return the capital (and then some).

Enter the pitch deck β€” a single document where founders need to explain their entire business. Investors see hundreds each month, but founders only get one shot each.

There's a lot of (sometimes conflicting) advice about what you should do with your deck, but that can vary. It's more helpful to call out some red flags you should avoid at all costs.

6 Common Pitch Deck Red Flags 🚩🚩🚩🚩

🚩 Including Detailed Financial Projections

The investors you're pitching will know you made them up. They'll know things will go wrong. They'll know your projections won't be accurate or even relevant in a few months. They'll know you might need to pivot the whole business at some point.

What they won't know is if you know this. So including detailed projections may make them question your knowledge of startups in general or at least your understanding of where your business is actually at.

What you can share instead is some idea of your business model. It's ok if you expect it to change. But you should have at least done napkin math to arrive at your market size, because they will.

🚩 Not Highlighting Competition

This may be counter-intuitive, but having recently (key word: recently) funded competitors is a very positive signal to VCs.

It's validation that other investors are excited about the space you're building in, which is a good sign for being able to secure more funding when the business grows.

To stand out as a good bet, clearly highlight ways in which your strategy is unique or a competitive advantage you have (and why users care about it).

🚩 Spending Too Much Time On It

Spend your time building your startup. You don't need to spend hours tweaking your deck as long as you clearly and concisely describe your business in it.

There's a whole class of consultants out there who help make your deck look "professional" β€” but some of the best decks I've seen have had a plain white background and were written in plain black text.

Most of the time, the only thing having a "well designed" deck proves is that you have someone on your team (or paid someone) who knows design. The exception is if your startup's brand identity is part of your moat, but extremely honest with yourself if this is actually true.

🚩 Not Sending It to Investors Before a Meeting

Why did Jeff Bezos institute a rule at amazon where meetings couldn't begin until everyone had read a memo with context?

If everyone has context ahead of time, attendees will ask higher quality questions and discussions will make more progress.

You have extremely limited time to pitch investors on your startup when you meet with them. You want them to leave that conversation with no remaining questions about your business. Give them the maximum amount of time to get the answers they need to make an informed decision.

🚩 Trying to Say Too Much

Each slide in your deck should communicate one single idea. That's it.

You can (and should) include supporting evidence, but the single primary takeaway of each slide should be immediately apparent.

Investors see hundreds of decks per month and spend less than 3 minutes looking at each one. If you can't get your point across quickly, you won't get it across at all.

🚩 Making It Too Long

Your deck is a sales document. Its only goal is to get you a meeting with investors. You should keep it as short as possible. You shouldn't need more than a single slide to communicate any individual part of your deck.

Sequoia Capital released a helpful deck template a few years ago that you can use. Now, having a clear distribution strategy is more important than ever, so I'd add a GTM slide to their list.

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Homework

This week, the homework is for me! I'll share a twitter thread with 3 more mistakes founders make with their decks tomorrow.

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