Entrepreneur to Entrepreneur: 4 Questions Your Fundraising Deck Isn’t Answering

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Editor's Note: Cambia Grove is proud to partner with the innovation community to amplify their perspectives on topics applicable to the larger health care ecosystem. This guest post from Brian Glaister, Conflux Innovations, dives into four questions that pitch decks often leave unanswered, but should be included. Join Brian Glaister for a virtual roundtable discussion on June 2 to dive further into these topics.  

The views expressed in this article are solely those of the author and do not necessarily reflect the opinions or positions of Cambia, Cambia Grove, or any other entity or organization.

 

I started to write this post several months ago but put it on ice once COVID-19 hit as I expected fundraising activity to slow down while everyone is sheltering in place. COVID has certainly impacted the startup investment landscape, but checks are still being written – particularly for companies with technologies like telehealth and remote patient monitoring that help society adapt to social distancing and for those who are early enough that they will hit hyper growth after the economy starts to rebound. While I’ve found through reviewing hundreds of decks that entrepreneurs are generally good at describing the problem they are tackling and their product, I consistently see other deficiencies time after time. To remedy this, I’ve put together a guide for some of the common mistakes I’ve seen as of late. Answering the questions below will help set you apart from the crowd and give yourself a better chance of raising money for your startup.

How do you make money?

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How you make money often seems obvious to entrepreneurs who are deep into their businesses, but it is less obvious to outsiders. Be blunt and specific.

Are you selling software subscriptions? Capital equipment? Single use devices? Whatever it is, tell your audience your mechanism of sale and, if possible, the price, margin, and any recurring revenue that may be part of your offering. Entrepreneurs are all out to change the world, but your business needs to make money in order to make any impact at all. By demonstrating you have a strong handle on how you will make money, you will give investors more confidence in your venture. Do the ‘good’ while doing well.

What is the competitive landscape?

Another deficient area I see frequently is the competitive landscape. It is important to be very thorough with your competition slide. On one hand, if an investor is very familiar with your space, you don’t want her to point out a competitor that you haven’t included in your analysis. On the other hand, a thorough competition slide can streamline due diligence for investors unfamiliar with your space and it is always advantageous to make it easier for an investor to write you a check. 

There is an incredible amount of noise in health care innovation right now.

And chances are at least a half dozen other companies do the bulk of what your product offers. It is the fine details that differentiate offerings in such a crowded market and your edge could be as simple as a different go-to-market strategy for a technology that is very similar to the competition. Put a ton of effort into your competition slide to make it effortless for investors to understand what sets you apart. And if you can’t figure out what makes your company different, you might be working on the wrong thing.

Why is your team the right group of people to lead your business?

Fortunately, I have yet to review a slide deck without a team slide. Unfortunately, they are often buried at the end of the deck and don’t inspire confidence. Put the team slide up at the front of the deck, perhaps right after the problem and solution slide. Headshots of key managers and advisors help highlight the diversity of your team. Logos of previous employers can help tell the story of why your experience is relevant to the company you are currently building. A few short bullets can tell that story in greater detail. 

Investors often talk about how they invest in people, not companies. A strong team slide at the front of your deck will help them believe your people are investable.

What are the comparable exits?

At the end of the day, startup investing is a high-risk pursuit of making a ton of money. Be explicit about how you believe you will make your investors’ money by listing adjacent exits in your space. If comparable companies went public, what are their current valuations, how much revenue did they generate last year, how much capital did they raise prior to IPO, and how long did it take them to go public from the time they were founded? For mergers and acquisitions, the same information is helpful in addition to who acquired the companies. Even if you are in a space that is too early for significant exit activity, listing significant adjacent private financings can be helpful. You can have the greatest solution in the world to a really important problem with the dream team to tackle it, but if investors don’t see a path to making a large return on their investment they will never write you a check. 

We are living in extremely uncertain times, but that doesn’t mean that innovation is not needed and it doesn’t mean that startups  cannot get funded.It does mean that now more than ever your pitch deck needs to absolutely be dialed in. Answering these questions well will help set your business apart which is advantageous in normal times but is absolutely critical in difficult economic climates.

Want to hear more from Brian? Join him for an upcoming virtual discussion on June 2, where he will answer questions regarding the "customer discovery" and this post. Details and registration below.

About Brian Glaister

Cambia Grove Member Brian Glaister is a serial entrepreneur with extensive experience developing and commercializing game-changing technologies in complicated, regulated industries. He is best known for his work at Cadence Biomedical where he led the development and commercialization of a wearable medical device that annually helps tens of thousands of stroke survivors relearn to walk and leave their wheelchairs behind. He currently provides CEO advisory and interim executive services to start-ups operating in the HealthTech, CleanTech and FinTech spaces through his consultancy Conflux Innovations. His work has earned him many honors including as a 40 Under 40 Honoree with the Puget Sound Business Journal, as a Member of the Buerk Center for Entrepreneurship's Wall of Fame, and as a Fellow with the Young Leaders Forum at the National Committee on US-China Relations.

Check out some of his other blogs by clicking here.