There is no doubt that Quora has produced some invaluable advice for the world of startups and investors in recent times. But one question that is on the lips of budding founders eager for seed funding is how to order those vital slides on a pitch deck.
Frank Chen, a partner at top VC firm Andreessen Horowitz gives his answer below via Quora:
- Team. We like to see the team background up front. Especially for seed and venture deals, it’s not unusual for us to spend 30-40% of the entire pitch meeting getting to understand the team, their backgrounds (all the way back to where you grew upm what you studied in school, big lessons learned at previous companies, and so on. If you had a personal experience that led to your founding the company, call it out. Understanding the team and its motivations assess what Scott Weiss calls “founder-market” fit, which he describes in his blog post about why we invested in Quirky (http://scott.a16z.com/20
- Metrics. For companies who are already in market, bring as many metrics as you can. Not only do we want to see progress-to-date, we want to see (1) what the team thinks is important, (2) how much you’ve invested in measuring and reporting on the important things, and (3) the clarity with which you can explain the important things.
- Total addressable market. Unless it is patently obvious, articulate why you think there is a big addressable market. In many cases since you are inventing something brand new, it won’t be patentable obvious, so spell it out. Generally speaking, I prefer to see bottoms-up rather than top-down estimates (e.g, show me number of S, M, L, and XL customers x average revenue per customer segment rather than “Gartner or NPD says this is a $5 bajillion dollar market, and we’re going to get 2% of that in 3 years).
- Competition. I know, I know—you are inventing something brand new and have no direct competition. But if you think saying this helps your cause, think again. If no one else is attacking the market, it begs the question of whether the market is big enough. Unconvinced? Read Paul Graham’s essay on growth (http://paulgraham.com/gr
owth.html). Also, if you come with only a hazy idea of what else is out there or how you plan to spank the competition, it will not give us confidence that you are going to be the #1 team in your market—one of the single most important questions we’re trying to answer during the evaluation process. If you can’t penetrate the fog of war, how are you going to come up with the strategy to win?
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