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# Building a Pitch

## At Accelerator Programs

You help build the components of your pitch throughout the program so that you are prepared to talk to investors about your company when you fundraise.

Here is a hint—your pitch changes based on the audience you are talking to. Customers expect more jargon and deeper industry knowledge. Investors will want more basic language and a clear understanding of how fast you are growing, how you make money, and how big the market is.

The most time is spent helping you on your investor pitch. You should iterate your customer pitch based on the feedback you get interacting with them regularly.

## Two Sentence Description

**Introduction**

Your "Two Sentence Description" is a short description of what your company does, as you would explain it to an investor. You'll use your two sentence description throughout your program to introduce your company to other founders in the cohort, and as practice for fundraising. You'll iterate on it with your mentors until it's perfect. Hopefully you will continue to use it or a version of it for years to come, to explain your company to investors and likely to the press and other general audiences.

Here's a good mental model for what we are looking for in a two sentence description. Imagine you were at a cocktail party, and an investor came up to you and said, "Hi xxx, what does your company do?". The two sentence description is what you would answer back.

**Examples**

Two sentence descriptions come in a number of different formats.

## Format 1: Sentence one, what we do. Sentence two, example.

Example: Airbnb is a marketplace where you can book a home or apartment when travelling for work or vacation. When you visit New York City with your family, instead of staying in a cramped and expensive hotel room, you can stay in a comfortable 3 bedroom apartment at the same price.

## Format 2: Sentence one, the problem we solve. Sentence two, how we

## solve it.

Example: Stripe makes it easy for developers to accept payments on their websites or mobile apps. We do this by providing a simple and well documented payments API that any developer can instantly start using straight from our website.

Please note that many companies screw up format 2 by talking about the general problem in the industry rather than the specific problem they solve. One hint you are doing this is if you aren't starting your 2 sentence description with the name of the company.

## Here are some other examples:

Chatpay: We allow anyone to create an online coaching business through WhatsApp or Telegram groups. For example a fitness coach can charge their audience to join an exclusive WhatsApp group where they will run an entire weight loss fitness program.

Afriex: Afriex makes it easy for immigrants to send money home. We use stable coins to offer the fastest and cheapest remittance service to over 30 countries.

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Drip: Drip is the only piece of software a restaurant needs to run their business. We offer employee scheduling, mobile ordering, and more to the 100,000 counter service restaurants in the US.

Supabase: Supabase is the open source Firebase alternative. We offer the features of Firebase with superior performance and no lock-in.

VenoStent: There are over 5 million dialysis and bypass surgeries per year, but half of them fail. VenoStent saves lives with a wrap that goes around blood vessels during surgery so they don't fail.

Known Medicine: Known Medicine helps clinicians pick the best cancer treatment for patients. We do this by breaking down a patient's tumor into many micro-tumors and treating each with different drugs to see which it responds best to.

## Common Mistakes

Here are the most common mistakes that founders make with their two sentence descriptions.

## Using a Customer Pitch Instead of an Investor Pitch

Startups have to describe their businesses to both investors and customers. A common mistake founders make is to believe they can use same pitch for customers and investors. For most startups, investors will not be the user and won't really understand the user. Therefore, most companies will need two completely different pitches: one for customers and one for investors.

At a very basic level, that means that you likely don't want to use the word "you" in your two sentence description (the Airbnb example below is an exception to this rule, and it works because Airbnb is a consumer product where actually investors would be likely users). But deeper than that, the investor pitch often can't assume that the investor is familiar with the problem you are solving and it can't use any terms that your customers understand but a general audience won't.

## Making Them Too Long

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The next most common mistake founders make with short descriptions is trying to give too much information. As the founder, you know all this cool stuff your company does, and it feels like the objective of the exercise is to pack as much of it as possible into the two sentences.

It doesn't work that way. The point of a two sentence description is not to sell investors that your company is a great company they should invest in. That's impossible to do in two sentences. The point is to clearly explain what you do, so they can start asking questions about it. It is in the discussion that follows that you have an opportunity to convince them that you have a great company they should invest in.

Here's another counter-intuitive property of two sentence descriptions. Many good two sentence descriptions will only describe 50% of what you do. This typically drives founders crazy because they see the 50% that is missing and it feels like they are selling their company short by not including it. But in practice, by trying to include everything you do, your description becomes so vague that people don't understand any of it. If an investor truly understands 50% of what you do, that is actually a great start. You can let them learn about the other 50% over time.

## Trying to Make Your Company Sound Impressive

Founders often worry that a simple description of their company doesn't sound "impressive enough" to investors. In an effort to make it sound more impressive, they insert buzzwords like "AI", or business jargon like "enterprise platform". This is not recommended; it doesn't impress quality investors and indeed will turn many off. The best two sentence descriptions use informal, simple language. Your two sentence description should be the way you would describe your company to a new friend or acquaintance in a casual conversation.

## Properties of Good and Bad Two Sentence Descriptions

One of the qualities of good 2 sentence descriptions is that they create pictures in the listeners head. In the Airbnb example you can imagine visiting New York City, you can imagine a crappy hotel room, and you can imagine a great apartment. In the Stripe example you can imagine going to a website, getting access to an API, and reading well prepared API docs.

Bad 2 sentence descriptions use jargon instead of creating pictures. For example, does any picture come to your mind with this pitch:

"We are a peer to peer sharing economy marketplace for homes. We connect homeowners with people who need short term stays."

This 2 sentence description is so vague it will leave little impression in my mind and will be easily forgotten.

Good two sentence descriptions are easily remembered and repeated back, even hours or days after first hearing them. A good two sentence description creates a clear mental picture in the listener's mind, so they are able to ask a good follow up question, which becomes the seed of productive conversation.

A great test you can do with your two sentence description is to give it to a random founder in the cohort and then ask, "ok, what do we do?" They should be able to quickly and easily explain back to you what your company does in their own words.

# Making the Investor Your Customer

A common failure mode during the program is to change the problem you are solving, the customer you are targeting, or your KPI because you think it will make your company more attractive to investors on your major deadline. We can think of this as making the investor your customer because most businesses should be doing everything within reason to make themselves look more attractive to customers.

This typically happens towards the middle of the program and is something you should try to avoid. For example, if you set an aggressive deadline goal and by mid-program you don't think you'll hit it, that doesn't mean you won't be able to raise on your deadline. As a result, you shouldn't necessarily change everything about your company in order to try to hit that goal. Instead, talk to your mentors and ask them if they think you are still moving in the right direction. Also talk to them about revising your deadline goal.

Another place where this happens is with companies who are pivoting. Often times they choose to pivot not to a problem they have experience with but to a set of problems that are popular with VCs (at the time of writing this article, AI would be a prime example).

Both of these moves above essentially put the investor before the customer in your company. It makes the investor the primary person you are trying to serve. Unfortunately, this is not the path to building a successful startup.

# Vertebrae (The Core of Your Pitch)

Your Vertebrae are the 3-5 points that you most want investors to remember about your company.

Great vertebrae tell a compelling and memorable story about your company that communicates what you do and why investors should be afraid not to fund you.

## They usually answer the following questions:

- What are you building and for whom?
- Why hasn't this been done before?
- Why is it hard to do what you are doing?
- Why is this an opportunity not to be missed?

## How to Build Your Vertebrae

There isn't a formula for writing vertebrae–they are compelling and memorable because they are unique to your company.

You'll build your vertebrae together with your mentor during fundraising preparation. To prepare, make sure to fill out your custom fundraising plan document before this meeting.

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## How You'll Use Your Vertebrae

You'll use your vertebrae in many places:

- They'll form the outline of your fundraising deck and major pitch event presentation
- When you're having a freeform conversation about your company with an investor, these are the key talking points that you'll want to make sure you cover in every conversation
- You'll take your vertebrae and turn them into an "intro blurb", which is a paragraph or so of text. When you're asking for an intro to an investor, they'll look at your intro blurb and decide whether or not to take a meeting, so it's important that it's good
- When investors show interest in you at your major pitch event or online, you'll respond to them with an email, and a key component of that email will be your vertebrae
  **Examples**

Here are the vertebrae that the Posthog founders used in their pitch. They wound up using a different strategy later on, but these were the points they used to raise their seed round.

**Posthog is open source product analytics.** We're like Mixpanel or Amplitude, but open source. We help people understand who is using their product, and how.

## Our first idea turned out to be crappy, so we pivoted and threw an MVP

**onto Hacker News.** The result? The all-time most upvoted B2B software launch on HN. After just 2 weeks we have 400 deployments, 1,500 GitHub stars, and an active community of contributors. We're growing by ~20 deployments a day.

**We believe product analytics should be targeted at developers.** Going after developers by being open source means we get in earlier at zero cost and with zero info-sec process. Being on premise means we can scale to data-sensitive enterprises in a way no one else can.

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**James was a VP Sales and has sold $5M ARR deals before,** so we can do enterprise sales. Tim was the fastest developer out of 50 at the company we spent four years together at before.

## We can displace the entire product analytics, event tracking

**and—longer term—data warehouse markets.** In the long run, there are 8-10 times as many developers as product people in the world. We can bring data driven decision making to every company in the world.

## Here's another example for Airbnb:

## Airbnb is a marketplace where you can book a home or apartment when

**traveling for work or vacation.** When you visit New York City with your family, instead of staying in a cramped and expensive hotel room, you can stay in a comfortable 3 bedroom apartment at the same price.

## Brian and Joe met at RISD where they graduated with degrees in fine

**arts.** Nate, who was Joe's roommate after college, made over $1m after starting a software consulting company in high school, and then graduated from Harvard with a degree in Computer Science.

## When using an early version of our product to attend SXSW we realized

**the most painful part of staying in an Airbnb is paying the host.** By accepting payment in our site, and holding in escrow until after the trip is completed, the number of nights booked increased significantly.

## We launched 3 months ago, we already have $15,000 of monthly revenue,

## and we're growing 50% every month.

## In the United States business and vacation travelers spend over 1

**billion nights in a hotel every year.** On average we make $20 per night booked on our Airbnb, which represents a $20B market opportunity in the US alone.

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# Think of Good Examples

One way you can really make a pitch come to life is with real-world examples and anecdotes. Oftentimes these examples go hand in hand with your vertebrae and help the investor better understand the point you are trying to make. The best examples paint a picture in people's minds. They come from your specific experience or the specific experience of a customer. The worst examples are overly broad, have too much jargon, or take too long to explain.

Here are some examples the Airbnb founders could have used when talking to investors:

**What you do:** Airbnb is a marketplace where you can book a home or apartment when traveling for work or vacation. When you visit New York City with your family, instead of staying in a cramped and expensive hotel room, you can stay in a comfortable 3 bedroom apartment at the same price.

**Example:** Last week, a Dad and his son flew in from Seattle to watch a Warriors game in person. They used Airbnb to rent an apartment in a building right next to the Chase Center. For 50% cheaper than staying in a hotel, they were able to walk across the street to see the game and their host even gave them a tour of the neighborhood afterwards.

**Traction:** We launched 3 months ago, we already have $15,000 of monthly revenue, and we're growing 50% every month.

**Example:** One of our customers has been renting out his 3 bedroom apartment in downtown New York for 10 years in order to make extra income when he is traveling for work. When we spoke to him in person he immediately signed up and moved his next 6 months of bookings onto our platform—that single apartment can make Airbnb over $5000 of revenue a year.

**Unique insight:** When using an early version of our product to attend SXSW we realized the most painful part of staying in an Airbnb is paying the host. By accepting payment on our site, and holding in escrow until after the trip is completed, the number of nights booked increased significantly.

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**Example:** The first time I used Airbnb we didn't have the payment feature built and I had to pay the host in cash. I was staying with a very nice family, students at the University of Texas Austin, who cooked me dinner and even left a mint on my airbed pillow. I felt like a complete idiot when they asked for payment and I forgot to get cash from the ATM. I realized right then that Airbnb should support payments on our site.

# Fundraising Materials

This section has advice on building a fundraising deck and data room.

## Fundraising Deck

**Introduction**

The best investor pitches don't feel like a pitch at all – they're more like an engaging, back-and-forth conversation. You drive the conversation, steering it to the points you want to hit on, and focus on telling the story you want to tell. That's why it can be helpful to create a deck to help keep the conversation on track, make sure you hit on all the key points, show important visuals, and share with the investor afterwards.

### Building Your Deck

Your fundraising deck is a visual backdrop for your fundraising vertebrae. Your slides should reflect the key vertebrae points in order and contain just enough detail to reinforce each point without distracting your audience. Remember: their focus should be on you, not your slides.

Here are the steps to build your fundraising deck:

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1.Meet with your mentors to figure out your 4-6 vertebrae points in fundraising preparation.
2.Using your Fundraising Deck Template, add one slide for each vertebrae point, in order.
3.Each slide should contain only one point or insight. If a slide has more than one, split it up.
4.Move anything not directly covered in your vertebrae points to an appendix. This is a great place to put additional numbers and details you think investors may ask about.
5.Delete the presenter notes before sharing with investors :)

## The Fundraising Deck Template

To make this easier, a set of fundraising deck slide templates exists that you can use as a starting point for your own seed deck. It contains more than 50 simple, compelling slide templates that you can customize with your own content to make sure your pitch tells a clear story.

There are 12 different sections of templates included, each with multiple variations, that map to the most common points you'll need to communicate to investors. Your deck should likely be between 6-8 slides, but you should not include a slide from every single section in your deck – instead, you'll want to focus on driving home just the 4-6 vertebrae points from your fundraising preparation. These should be the most compelling points about your company, and trying to add other slides or information to your deck will just add noise and make your pitch less effective.

## The Most Commonly Used Slides Include:

**Title:** An intro slide containing the name of your company, your logo (if you have one), and a short version of your 1-liner.

**Traction:** Show the most compelling evidence of progress for your startup. If you have compelling progress or traction, this slide should probably be the first slide in your deck, right after your title slide. If your main KPI is revenue, this should be a graph of revenue growth. If your main KPI is active users, this should be a graph of user growth. If your main KPI is LOIs or PoCs, this should be total value + logos, and if you're working towards milestones on a longer time horizon (bio, hardtech, etc), this should be a timeline of your milestones achieved + future roadmap.

**Team:** Show why you're the best team in the world to build your business. If you are experts in the space, have relevant education or work experience, or have impressive accomplishments, this slide should be near the front of your deck.

**Insight:** Show a non-obvious or counter-intuitive insight that you have about your business or market, that will surprise investors or teach them something new. This helps explain why your startup hasn't been done before, and also reveals how well you understand your market.

**Market + Business Model:** Show a bottom-up calculation of the size of your market, along with the assumptions you're making. This also has the added benefit of explaining your business model and how you make money to investors.

**Milestones + Use of Funds:** Communicate the milestones you plan to hit with the money you're raising. Investors will want to see that your target milestones map to milestones you'll need to hit to raise your Series A, so make sure those line up.

## Other Helpful, But Less Commonly Used Slides Include:

**Problem:** Show investors why the problem you're tackling is so painful or important to your users. Most investors will not be experts in your space, so it's helpful to give them context on what the problem is, who has it, and why it's valuable for you to solve it.

**Solution:** Explain how you are solving the problem your users have. This slide usually follows immediately after a Problem slide.

**Why Now?:** Explain what's changed in the world recently that makes building this company possible, when it wasn't possible a few years ago. This could be due to new regulations, new technology, new customer behavior, or new platform adoption.

**Vision:** Paint a compelling vision of the future that will exist if your company works.

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**Competition:** Contrast your company with other competitors or substitutes for your product, to explain how you're differentiated from existing players. Your differentiation could be through product features, the specific customers you're targeting, or some other dimension that is important to your users.

**Wrap Up:** Include a wrap up or summary slide to thank the investor for their time, reiterate key points, include your contact info, and set next steps.

**Sales Process and Sales Economics:** If you are a B2B company and have significant revenue, you may want a slide about your sales process and sales metrics like average deal size, etc.

**Customers:** (for B2B companies) A slide showing logos of your customers and perhaps some info about them. Good if you have recognizable customers.

**Customer Case Study:** (for B2B companies) A slide walking through one successful B2B customer and the impact they got from using your product. Useful if you have a really successful customer where you've had a meaningful impact on their business.

**Engagement and Retention:** Stats about your retention and user engagement (how much users use the product). Particularly for consumer companies, sometimes placed in an appendix.

**Unit Economics:** Relevant for companies that have high COGS—like labor marketplaces, hardware companies, some fintech companies.

## Quick Tips for an Effective Deck

Using these templates as a starting point should get you most of the way there, but here are some quick tips to avoid common fundraising deck mistakes that founders often make:

If investors don't understand, they'll never invest. Remember, they invest in people and ideas, not slides. So optimize for clarity of your ideas, not fancy slides.

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Effective slides are simple and obvious. Less is more, and too much info on each slide makes it hard to understand or remember anything at all.

Focus on 1 idea per slide. If you're trying to make multiple points in a single slide, split it into multiple slides.

Keep it to 6-8 slides total. Make sure you nail your 4-6 vertebrae points, and anything else should be cut or moved to an appendix.

Lead with your most compelling slides. If you have lots of traction, start with that. If you're an objectively impressive team, lead with that.

State the conclusion in the headline of each slide, and use the body as supporting evidence. Replace boring slide headlines like "Problem" and "Traction" with strong takeaways like "Starting a subscription publication is hard" and "$2.8M ARR growing 24% w/w".

Go through your deck and only read the headlines—does it tell a compelling story? Think of your deck not as a series of individual points you want to make, but instead as a story you want to tell. If an investor only read the headlines on your slides, would they understand your business and be excited to invest?

Show, don't tell. Rather than saying "we're the best product in the market", which anyone could say, use facts like "we have a 90% win rate vs our competitors" to lead investors to their own conclusion that "wow, they're the best product in the market."

Label your graphs. Unlabeled graphs are confusing and misleading. You should label your axes and make it clear what units ($, etc) you're graphing.

Only include real traction. Unless you have nothing else, don't talk about your pipeline, "active conversations", or unbooked revenue – it often makes you look like you're grasping at straws to show traction.

Use consistent formatting. Keep your fonts, sizes, colors and layouts consistent so that investors don't need to reorient themselves on each slide.

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Every slide and word should count. If it doesn't make an investor more likely to want to invest, get rid of it. If you feel an urge to add slides to your deck after your mentor signs off on your deck or after you start pitch meetings (perhaps because you feel like it will help answer questions investors have), it is highly encouraged to put those slides in the appendix and not the main section. Otherwise, your presentation may come off as too long / boring / detailed.

Have an appendix. An appendix is a set of slides you have at the end of your deck that you don't normally present, but can pull up if an investor asks a relevant question. Having slides prepared for common questions will help you give stronger answers to them.

You can also check out some past fundraising deck examples for inspiration, though keep in mind many of them could be improved with the tips above, so you likely shouldn't copy them directly.

## Quick Tips for an Ineffective Deck (Common Mistakes)

Here are some common fundraising deck mistakes. Doing these things will almost always make your pitch worse.

**Don't use your vertebrae.** Your vertebrae are designed to bring investors through a simple, compelling narrative so that you can have a good conversation. Dropping vertebrae points, presenting them out of order, or adding more content will almost always detract from that goal.

**Use tons of words.** If your slide has more than a handful of words on it, your audience will ignore you and get bored reading the slide instead.

## Use a "professional" template or hire a slide designer.

High-production-value slides don't make good pitches better, but they do make bad pitches worse because they signal that you are focused on the wrong things. What's important is the storytelling, the content, and how it's being communicated. What matters the least is the design and the colors you are using.

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**Use complex diagrams and screenshots.** There's almost always a better way to make the point you're trying to make with simpler visuals or words alone.

**Be vague.** Specific statements are more credible and more interesting. For example:

**Boring:** "We're raising $1M to hire three engineers"

**Interesting:** "We're raising $1M so that we can launch on Android and reach $100k in MRR."

**Boring:** "I was a software engineer at Youtube"

**Interesting:** "I was a software engineer on the ranking team at Youtube, where I built a ranking system that handles XX billion requests per day and doubled video viewing time on the site."

**Boring:** "Our product helps salespeople spend less time writing notes in their CRM"

**Interesting:** "Jane, one of our users, is a mid-market sales rep at \_\_\_\_\_. She talks to ten to fifteen leads every day. In the past, she would spend 10 minutes writing notes in salesforce after each customer call, which added up to two hours of lost productivity every day. Our product summarizes her calls and automatically adds notes to Salesforce so that she can focus on making more calls."

# Data Rooms and Additional Documents to Prepare for Seed Fundraising

## What is a Data Room?

A "data room" is just a fancy term for a collection of documents that you can easily share with investors. Data Rooms are a commonly used tool in later stage funding rounds (Series A+) because they cut down on the back-and-forth of investors asking for materials and companies supplying them.

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## What Tool Would I Use to Make a Data Room?

A data room, especially at the seed / Series A stage, is typically just a Google Drive or Dropbox folder. To keep track of what you sent to whom, you can simply create a different folder for each investor.

Docsend also has a data room product some companies use. There are many enterprise-class data room products, but those are overkill for this purpose.

## Should I Make a Data Room?

Most companies do not need a data room for seed stage fundraising. This would be overkill for your typical early stage software company. There are a couple of cases where it could make sense:

You're a hard-tech/biotech/life science company You have a lot of traction and are planning to raise a large round from large investors

If you're not sure if it makes sense to prepare a data room, it's best to just not bother with doing so upfront.

If an investor asks you for one, it's perfectly fine to ask them for what documents they are asking for specifically. They'll then either suggest a few documents, which you can send through email, or they'll send you an extensive list that mostly applies to later stage companies. Look through the list and send them what you find relevant for your stage of the conversation.

If you find that investors are requesting a lot of the same documents, you can make a data room then and use the requests you've gotten to inform what you put in it.

## What Should Go in My Data Room?

Here is a list of materials to consider putting in a data room—only some of these will be relevant for any particular company.

## Business Materials

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- If you have major enterprise deals (contracts, pilots, LOIs, partnerships), the signed documents of those deals
- Historical financial statements (typically monthly showing a breakdown of revenue and costs)
- Financial projections (typically a model in Excel or Google spreadsheets)
- More detailed metrics than are in your main investor deck: such as unit economic breakdowns, retention and engagement data, sales pipelines, CAC/LTV analysis, customer acquisition source breakdowns. These can also go in an Appendix section on your investor deck.

## Legal Materials (It's Often Best to Wait Until Someone Asks for This

**Information)**

- Certificate of incorporation and bylaws
- Your cap table (breakdown of the equity ownership in your company including SAFE holders / investors)
- Employee agreements
- Copies of signed SAFEs and any other investment documents
- If you have a considerable number of employees, an org chart
  There is a longer list of these in the Series A handbook but it's overkill to prepare pre-emptively for seed fundraising.

## Materials for Hard-Tech / Biotech / Life Sciences Companies

Each of the following headers can be used as folder titles, and then the subjects listed below each header are documents that you can provide. Please note, you often don't want to give them everything upfront, so ask if you're unsure if a certain piece of information is relevant to your stage of conversation.

## Intellectual Property

- All published patents
- A document that lists provisional patents that are currently pending, and, if needed, what core features of your product they cover

## Clinical and Experimental Data

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- Reports from completed clinical trials
- Protocols of ongoing trials
- A document that summarizes all of your trials to date in one place
- A document that summarizes your upcoming clinical trial strategy
- Detailed experimental data (if you have it)

### Regulatory Information

- Any regulatory approvals that you have received so far
- Any regulatory plans that you have gotten from outside consultants

### Product/Technology/Science Information

- An FAQ addressing common questions investors have about your technology

- A document explaining in more detail how your technology works that's written to be easy for investors to understand (careful about writing anything down not already covered in patents)

- Publications (both by you and potentially relevant ones by others. It's often helpful to have another document that summarizes/categorizes the most relevant papers)
  **Other**

- A detailed budget showing the costs to get to your next milestones (Operating/hiring plan)

# Fundraising Legal Advice

## SAFE Quickstart Guide

It is recommended to use standard legal tools to send safes. You can also use the downloadable templates on standard legal resources websites.

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An in-depth SAFE User Guide is available. This documentation gives you some background on the basics.

Sometimes investors give companies term sheets for a SAFE. Proceed with caution. The SAFE was drafted to be simple enough to render term sheets unnecessary. Confirm whether the term sheet contains any common investing rights or red flags.

Sometimes investors ask for side letters. Proceed with caution. Confirm whether the side letter contains any common investing rights or red flags.

Some investors ask for customizations to the SAFE. You can tell if an investor has modified the standard SAFE if they have modified or deleted this sentence from the second paragraph:

"This SAFE is one of the forms available at \[standard location\] and the Company and the Investor agree that neither one has modified the form, except to fill in blanks and bracketed terms"