VCs are debating if the pitch deck should really be so importantSeptember 26, 2020
- The startup community is having a big debate on whether the classic Powerpoint-like presentations known as pitch decks should really remain so central to the money-raising process or if they can — and should — be replaced by conversations.
- Some say conversations and relationships should rule.
- But several venture capitals begged founders not to listen to this. They say pitch decks are crucial in helping founders tell their stories.
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Some startup founders say that when it comes to convincing venture capitalists to invest, the good old-fashioned pitch deck, a Powerpoint presentation that sells investors on the company, is dead and founders should do “conversations” instead.
But when Breather cofounder Julien Smith voiced his support of such a thing, he set off a big debate on Twitter where some VCs pleaded with the startup world not to listen.
“The best investor ‘pitches’ are actually just conversations,” Breather cofounder Julien Smith tweeted. “The best decks are really just whiteboard sessions. The best negotiations are simple discussions of priorities.”
—Julien ✌🏻️ (@julien) September 25, 2020
Several investors chimed in to agree.
“I do pre seed & can say most people should simply start off establishing some relationship + how much the investor knows + stating their hypothesis, assumptions and talk through their thinking” venture capitalist Ana-Maria Yanakieva replied, “rather than pitching all the buzzwords as if they figured every single thing out.”
“Yes!” NextChapter founder Janine Sickmeyer replied to Yanakieva. “The more you establish a relationship, the better chance you have forming a real friendship with an investor which is more important than being another pitch.”
But others immediately jumped in pointing out the flaws of the no-pitchdeck pitch.
For instance, investor Sarah Austin asked “Which VCs do this, though? And with only experienced entrepreneurs or also with first timers?”
Founder Collective partner Eric Paley made the case that the best public speakers are so good because they use a written plan. “Without a deck, founder can’t control the agenda and often loses the narrative,” Paley tweeted.
“So pls [please], let’s kill this idea that better VCs just want to informally chat,” he continued.
He says the pitch deck lets founders use “visual data and evidence” to support their talk and in the end, the best VCs want decks, “not to have a dog and pony show, but to be fair to the founders.” Paley doesn’t want to see pitch meetings turn into a contest on which founders are the best extemporaneous speakers.
He’s not the only VC that feels that way.
“A pitch deck is not a silly hoop that VCs make you jump through,” venture capitalist Benedict Evans tweeted. “It’s a tool that lets an entrepreneur control how they tell the story. It guarantees you say everything that you want in the way you want to say it.”
This discussion follows a massive tweet storm by Frank Rotman, a founding partner at QED Investors and an early backer of Credit Karma, earlier this week that guided founders on exactly how and what to say in their pitch deck story.
If that discussion wasn’t enough to convince startup founders — and VCs — that many VCs believe good pitch decks make for good pitch meetings, here’s another tidbit. Pitch decks give VCs something to review and inspect even if they weren’t at the meeting.
In fact, pitch decks remain such an integral part of how VCs evaluate companies, especially early pre-seed and seed-stage, that document management company DocSend recently studied how thousands of potential investors interacted with hundreds of decks to uncover insights into the investing process.