Venture capital (VC) financing is highly sought after by entrepreneurs, but only about 100/100,000 companies actually succeed in obtaining it, about 80/100 fail, and only about 20/100,000 companies actually succeed after obtaining it. have secured. Despite the scarcity of VC and high dropout rate, many entrepreneurs seek VC with VC pitches, or seek help from the business-school-and-incubator network to create “winning” pitch decks.
While most contain pitch decks standard elements such as product/service description, market analysis, management track record and financial details, the reality is that pitch decks are a very poor predictor of business potential – and sophisticated entrepreneurs and VCs know that. No one can predict your potential based on a pitch deck. For example, about 10 of the world’s leading VCs rejected Steve Jobs and about 12 rejected Google.
That’s why VCs wait for Aha, ie real evidence (proof) of potential, not just words on a page. There are 4 types of Aha based on the real results of billion dollar entrepreneurs. In this article, we will explore 4 types of pitch decks based on these 4 types of Aha that improve your chances of getting VC if you still want it when you get to the specific type of Aha – 94% of billion dollar entrepreneurs started without VC .
The Previous-Unicorn pitch deck: If you are an entrepreneur who has already achieved unicorn status with a previous venture, you will find it relatively easy to raise VC for your new venture. This type of pitch deck shows your track record as a successful entrepreneur. For example, Elon Musk’s pitch deck might simply say, “Hi, I’m Elon Musk and I’m considering starting a new venture. I’ll provide more details later. In the meantime, send your checks to the following address.”
The Unicorn technology pitch deck: Entrepreneurs who have developed a billion-dollar technology that meets a significant market need have a high chance of winning VC. This type of pitch deck highlights the technology’s proven effectiveness and potential to disrupt the market. For example a technologist like Herb Boyer might introduce his pitch deck by saying, “Hello, I’m Herb Boyer, and my colleagues and I have successfully pioneered genetic engineering.”
The Unicorn strategy pitch deck: Entrepreneurs who have already launched their venture and demonstrated their strategy at the unicorn level have an advantage when seeking venture capital. This type of pitch deck emphasizes the company’s successful execution and market traction. An example could be Pierre Omidyarthe founder of eBay, and said, “Hello, I’m Pierre Omidyar. I started an online auction business and ran hundreds of thousands of auctions last month and have the potential to grow into millions.”
The Unicorn entrepreneur pitch deck: Pitch decks of unicorn entrepreneurs who have successfully launched a unicorn business and are starting to dominate their emerging industry can generate significant interest from VCs looking to invest in a potential unicorn entrepreneur due to leadership skills. These entrepreneurs have already demonstrated their ability to build a successful business, making VCs more likely to want to invest. For example, Mark Zuckerberg’s pitch deck might include a confident statement like, “Hi, I’m Mark Zuckerberg. I recently launched Facebook and have already captured a significant user base, starting with Harvard and Stanford students. Now I’m planning out expand to the rest of America and the world.”
The best pitch deck
The ultimate pitch deck is one you don’t need because your business is quickly growing without VC funding. Jan Koum’s experience with WhatsApp illustrates this approach. After building the business with angel capital and becoming profitable, Koum only accepted VC financing after eight months of persistence from a VC firm. A pitch deck of his could simply say, “Hi, I’m Jan Koum. I built WhatsApp with $250,000 in angel capital and we’re already profitable. So basically I don’t need your investment.”
MY TAKE: While pitch decks are all the rage, providing real proof of potential is essential. Empty promises and inflated claims can only go so far. By learning from unicorn entrepreneurs who have achieved remarkable growth without VC funding, you can gain valuable insights for building a strong business foundation. Remember, VCs are looking for tangible proof of success. Try to provide real evidence that demonstrates your venture’s potential and skills, and you’ll increase your chances of winning venture capital investments