Are you a VC giving advice to founders? Are you an LP giving money to VCs? Are you a founder looking to raise? Grab a cup of tea/coffee and read on.
Over the weekend, I skimmed through LinkedIn while waiting on a queue and found a VC posting a meme denoting exasperation for people including TAM/SAM/SOM in their decks.
At first I could not know tell why I was mildly annoyed by it, despite knowing many times that slide adds little… then finally the penny dropped, and I got a bit exasperated myself.
The person posting the meme wasted their readers’ time and his own being childish, instead of giving constructive feedback. An example of useful feedback is “look, if you are talking about industry and opportunity size, make sure you tie that into both your sales forecast and your unit economics”. Right there, that’s good feedback.
I found myself explaining once why $100m ARR in a forecast was not ambitious at all, by showing that it represented less than half a percent of the yearly demand… and if we could not capture even that amount of the market, we would be better off doing something else.
Which takes me to the learning here. The job of VC is to sift through innumerable decks. I am sure most VCs are perfectly capable of pushing the right arrow key and skip a page in a deck, instead of getting flustered. If you cannot achieve something that simple, your LP should fire you immediately.
The job of a company founder is to run a successful business, not to become McKinsey & Company. This is why I think people obsessing about the right amount of pages or content is silly. You won’t need the same info for a pre-revenue SaaS than for a capex-heavy business on Series A.
What founders need to be focused on is “shining” and there is no single way of doing that. Some are great talking numbers, some can succinctly tell what they know and others don’t. Some just have projects so amazing that simply cannot be ignored.
On the topic, I had a brief side conversation with Kiran Mehta when I told him my rule of thumb for decks was not a page count but how long it took for someone who knew nothing of the business to go through it.
And we agreed that the important thing was (a) to have a good business idea first and foremost, and (b) to understand that a deck will compete with hundreds of others for a VC’s attention.
The bottom line is, each part of the ecosystem should be thoughtful and respectful of the other’s efforts. As a founder, you can show this by making clear each page of your deck is there for a reason (and of course, creating and running a great business). As a VC or an angel, you should be able to see through a bad deck to find a great business (and be helpful and respectful to people who will effectively can make you get 20x of what you are putting in). And as an LP… you should be both patient and ruthless, and make sure you hold VC funds accountable to great standards.
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