Fundraising

Overview Fundraising is difficult. Founders are responsible for hiring, building, and fundraising all at the same time. There are very few people that truly know what it takes to build a company or raise capital while being a strong leader. The best way to learn is from someone who has been there before. Being a founder can oftentimes be an “asymmetric experience.” As Seth Godin, the business author puts it: “In these asymmetric situations, it’s unlikely that you’re going to outsmart the experienced folks who have seen it all before. It’s unlikely that you’ll outlast them either. When you have to walk into one of these events, it pays to hire a local guide. Someone who knows as much as the other folks do, but who works for you instead.” In order to help you find your “local guide,” we went along for a fundraising ride with a founder in our community. Jonathan Gandolf is the CEO and Founder of The Juice, The Juice collects and consolidates resources from across the internet onto a single platform where you can save, share, and enjoy content on demand. Be sure to check out The Juice and sign up to discover the best sales and marketing content for you. Spoiler: The Juice Achieves Major Milestones in Revenue and User Growth Over the course of ~4 months, we sat down with Jonathan on a regular basis and picked his brain on the state of his fundraise and what he was learning along the way. We cover everything from his first meetings to due diligence. For founders who are gearing up for a pre-seed or seed round and are feeling lost, Jonathan offers great insight as he shares his fundraising journey from day 1. Give it a listen below: Week 1 — The Basics of the Round To kick things off we give more background about the Founders Forward Fundraising series and the goals behind it. We dig into the business behind The Juice and the fundamentals of their pre-seed funding round. Jonathan is ready to go with a list of 60 potential investors and a pitch deck in hand. Hop around and learn more about what we covered in week 1 below: The Juice business model How Jonathan is building his investor outreach list What Jonathan’s plans are for reaching out to investors The pitch deck feedback loop Where to listen: Spotify Apple Podcasts Google Podcasts Where you generally listen to podcasts Related Resources: The Juice — the best sales & marketing content at your fingertips Visible Connect — our investor database The Fundraising Wisdom That Helped Our Founders Raise $18B in Follow-On Capital How Starting Line Helps Founders Address Their Mental Health with Ezra Galston Week 2 — Finding Investor Intros Jonathan joins us after his first few weeks of heads-down fundraising. We discuss how he is going about adjusting and tweaking his pitch deck as more feedback comes in and how he is leveraging his network (and customers) to find intros to potential investors. A few other key topics we hit on: Managing pitch deck recommendations and changes Designing a pitch deck with a small team Finding introductions to potential investors Leveraging customers for investor introductions Related Resources: Our Teaser Pitch Deck Template Creating Momentum in Your Fundraise with Brett Brohl Week 3 — Revenue vs. Product vs. Team In week 3 of Jonathan’s fundraise, we break down what investors are looking for at the pre-seed stage. As The Juice has a strong product, Jonathan has been featuring and demoing his product during pitches. We also dive into how The Juice ideal investor has transformed since they’ve started their raise and how they are adding new investors to the top of their fundraising funnel. A few other key topics we hit on: How to talk about revenue with investors How Jonathan leveraged their product while pitching Adding investors to the top of an investor funnel Identifying your ideal investor Related Resources: Building Your Ideal Investor Persona Week 4 — Finding a Lead Investor Jonathan has been busy with investor meetings and pitches since the last time we chatted. Jonathan breaks down the “VC speed dating” event he attended and updates on other investor conversations. Finally, we hit on financial projections at the pre-seed/seed stage and what investors are looking for in the early stages of financial projections. A few other key topics we hit on: VC speed dating Feedback on the size of round How to nurture potential investors Sharing financial projections Related Resources: How to Raise Your Series A with Michael Rangel of Novo How to Build an Investor List with Gale Wilkinson of Vitalize Week 5 — Pitching Investors We are back in the heart of The Juice fundraise. They are a few weeks in and starting to get to the middle of the “3 months of pitching.” We discuss how Jonathan is leveraging verbal commits to build urgency with new investors and discuss what is being shared in The Juice’s data room. A few other key topics we hit on: The timeline of fundraising Using verbal commits to create urgency What Jonathan is sharing in his data room Related Resources: Creating Momentum in Your Fundraise with Brett Brohl What Should be in an Investor Data Room? Week 6 — Launching on ProductHunt Coming off of their first ProductHunt launch, Jonathan joins us to share the current status of the round. We discuss what they’ve been focusing on internally as a business. Finally, we discuss the term sheets that are on their way. A few other key topics we hit on: Lessons from launching on ProductHunt How to build a campaign for ProductHunt Hunting for a lead investor Related Resources: The Juice’s ProductHunt Launch How We Topped Product Hunt (Overnight) Week 7 — The First Term Sheets The first term sheets are in hand and the end of the raise is in sight. Jonathan joins us to discuss the term sheets he has in hand and what due diligence has been like so far. Finally, we talk through what hiring plans and projections look like once the cash is in the bank. A few other key topics we hit on: Leveraging the first term sheets for urgency Modeling different fundraising outcomes Lessons from first rounds of due diligence Standing on the shoulders of giants Related Resources: 6 Components of a VC Startup Term Sheet (Template Included) Navigating SaaS Partnerships as a Startup Week 8 — Closing the Round They did it! Jonathan and the team have wrapped up their raise and they are in the process of finishing up the round. Jonathan shares what he has learned during the raise and what is next for The Juice. Related Resources: The Juice Achieves Major Milestones in Revenue and User Growth Learn more about The Juice The Juice collects and consolidates resources from across the internet onto a single platform where you can save, share, and enjoy content on demand. Join for free to explore the best sales and marketing content here.

Raising venture capital for your startup is difficult. Raising venture capital for your startup with little to no revenue can feel impossible. However, venture capital funds have started to invest earlier and earlier into startups. The emergence of pre-seed rounds has led to more interest in pre-revenue startups. Related Resources: All Encompassing Startup Fundraising Guide & Seed Funding for Startups 101: A Complete Guide Luckily, there are countless startups that have done it before. In order to better help founders navigate a fundraise with little to no revenue, we break down lessons from startups and investors that have taken part in a pre-revenue funding round below: What is Pre-Revenue Funding? Pre-revenue funding is equity or debt financing for companies that have yet to generate revenue. Pre-revenue funding can apply to companies across different sectors, markets, verticals, etc. Startups might have a product or a product in development but have yet to take it to market. Pre-revenue funding generally helps a company at this stage build its product or put a go-to-market motion to practice. Related Resource: The Understandable Guide to Startup Funding Stages What Does It Mean To Be Pre-Revenue? Pre-revenue startups can be at varying stages in their startup lifecycle. For example, if a company is working on an incredibly large scale project revenue might come much later in its lifecycle. On the other hand, there might be companies that have developed a product and are ready to take it to market but need capital to hire talent and put their product and distribution to work. For the sake of this post, we will generally be speaking of companies Related resource: 8 Startup Valuation Techniques and Factors to ConsiderWhat Does the DCF Formula Tell You? How Do Startup Founders Get Pre-Revenue Funding? The most common form of funding to receive before revenue is venture capital. Startups and venture capital funds generally follow a power law curve. This means that investors need to find a few companies that can generate massive returns for their LPs. Because of this, they are willing to invest in more companies at early stages in return for a larger equity percentage with the hope that a few of the companies will pan out to generate huge returns. Related Resource: Understanding Power Law Curves to Better Your Chances of Raising Venture Capital In order to improve your odds of raising capital at the pre-revenue stage, you need to understand the VC thought process and demonstrate why you can grow into a company that will generate returns for its investors/LPs. How Investors Evaluate Pre-Revenue Startups Every startup investor will use a different method or style to evaluate potential investments, especially pre-revenue startups. Understanding how venture capitalists think about making investments will greatly increase your odds of raising a round. Check out a few of the common methods and valuation styles below: Related Resource: A Quick Overview on VC Fund Structure 1) The Berkus Method As we wrote in our post, Valuing Startups: 10 Popular Methods, “The Berkus Method is an attempted way to assess value without the traditional revenue metrics that many methods take into account for more mature organizations. The Berkus Method quantifies value by assessing qualitative qualities instead of quantitative ones. Value is assessed in the Berkus Method with five main elements. The elements considered within the Berkus Method include value business model (base value), available prototype to assess the technology risk and viability, founding team members and their abilities or industry knowledge, strategic relationships within the space or team, existing customers or first sales that prove viability. A quantitative value can be tied to each relevant quantitative factor with the Berkus Method.” 2) Risk Factor Summation Method As we wrote in our post, Valuing Startups: 10 Popular Methods, “The Risk Factor Summation Method is used with risk as the primary method for evaluation. This approach values a startup by taking into quantitative consideration all risks associated with the business that can affect the return on investment. An initial value is calculated (possibly even using one of the other methods discussed in this post) and then the risks are assessed, deducting or adding to the initial value calculation based on said risks to the return. Some of the different kinds of risks that are taken into account are managing risk, political risk, manufacturing risk, market competition risk, investment and capital accumulation risk, technological risk, and legal environment risk.” 3) Venture Capital Method As we wrote in our post, Valuing Startups: 10 Popular Methods, “This method is one of the most common, if not the most common method used for evaluating startups that are pre-cash flow and seeking VC investment. The VC Method looks at 6 steps to determine valuation: Estimate the Investment Needed Forecast Startup Financials Determine the Timing of Exit (IPO, M&A, etc.) Calculate Multiple at Exit (based on comps) Discount to PV at the Desired Rate of Return Determine Valuation and Desired Ownership Stake It’s ultimately a quick, rough estimate informed by as much information as is available based on the market, comps, any existing quantitative and qualitative info from the company at hand, and an assumed amount of risk from the VC Firm.” 5) Scorecard Method As we wrote in our post, Valuing Startups: 10 Popular Methods, “This valuation method looks at these similar companies and sees what types of valuation they received from other investors. From there, the median will be calculated from the value of all the similar companies’ valuations and this median will determine the average value of the target company. In addition to the median value placed on the competitive landscape, scorecards are looking at the strengths and weaknesses of the market as assessed by other investors and score their investment in question weighted with the following criteria compared to the other companies in the space: Board, entrepreneur, the management team – 25% Size of opportunity – 20% Technology/Product – 18% Marketing/Sales – 15% Need for additional financing – 10% Others – 10% A company may be valued higher than the median with the scorecard method if the size of opportunity or board/management team is exceptional quality or vice versa, may be docked if the tech is strong but the leadership is assessed as in-experienced.” Looking for Fundraising? Visible Can Help! Running a process to raise capital, especially before generating revenue, is a surefire way to improve your odds of success. Find ideal investors with Visible Connect, add them to your Fundraising Pipeline, and share your pitch deck all from Visible. Give Visible a free try for 14 days here.

At Visible, we believe that a venture capital fundraise often mirrors a traditional B2B sales and marketing funnel. At the top of your funnel, you are adding new investors, nurturing them throughout the middle of the funnel with email and meetings, and hopefully cashing a check from them at the bottom of the funnel. Related Resource: All-Encompassing Startup Fundraising Guide Luckily, there are tips, resources, and tricks that will help you build momentum in your fundraising efforts so you can focus on building your business. Learn more about how you can create a fundraising strategy and build a more efficient fundraise with our guide below: Startup Fundraising: How It Works Just how a sales and marketing process might differ from business to business, so will a fundraising process. The ideas and systems behind the process might stay the same but there will be subtle changes when it comes to approach, communication, and more as a business grows. A couple of different stages that we will hit on in this post: Pre-seed Seed Series A, B, and C How should startup founders prepare for these funding rounds? Check out our breakdowns for each stage below: Pre-Seed Funding As we put in our post, The Understandable Guide to Startup Funding Stages, “A pre-seed round is a round of venture capital that is generally the first round of institutional capital that a startup raises. A pre-seed round generally allows a founding team to find product-market fit, hire early employees, and test go-to-market models.” Pre-seed funding rounds have become more common over the past few years and have turned into a powerful resource to help founders get their idea and business off the ground. The purpose is to give founders the capital they need to see their product through. Investors are largely betting on the team and idea as revenue is little to none. Pre-seed rounds greatly vary in size but generally fall in the $300K to $1M size. However, we’ve seen pre-seed rounds get close to $5M. Typically, valuations might be in the $2M to $5M range. Seed Funding As we wrote in our post, Seed Funding for Startups 101: A Complete Guide, “Seed funding is a startup’s earliest funding stage. Often, seed funding comes from angel investors, friends and family members, and the original company founders. An early-stage startup may also look for funding through bank loans, but angel investments are usually preferred. Seed funding is used to start the company itself, and consequently, it is a fairly high risk: the company has not yet proven itself within the market. There are many angel investors that specifically focus on seed funding opportunities because it allows them to purchase a part of the company’s equity when the company is at its lowest valuation.” At this point, a startup likely has some sign of product-market fit and is ready to scale its go-to-market efforts. At the seed stage, rounders are typically in the $2M to $5M range (but like pre-seed funding can often be much larger than this). Valuations typically sit around the $8M – $12M range. Series A, B, and C Funding Beyond a seed round comes Series A and beyond (Series B, C, D, etc.). At the point of a Series A round, a startup generally has demonstrated product-market fit, is making senior hires, has a strong product, and is executing new releases at a high level. Once you get beyond a Series A, the same ideas hold true but an investor is likely more focused on the numbers behind a business. They’ll want to make sure that the business can efficiently grow into a huge company. Typically a Series A round is anywhere between $5M and $20M. This is a large range but we still occasionally see companies raise much larger amounts. Revenue is like in the $1M to $5M range and all signs point to that number continuing to grow quickly. How to Create a Startup Fundraising Strategy As we said earlier in the post, approaching a fundraise with a strategy and system in place is a great way to build momentum in your fundraise. Founders are being pulled in a hundred different directions and a fundraise is a part of that. By having a system in place, you will be able to focus on the other aspects of your business. There is no right or wrong way to approach a fundraise but as long as you have a strong system and cadence in place you are already ahead of the curve. We recommend treating a strategy like a sales and marketing funnel. Find investors to fill the top of the funnel, both warm and cold “leads,” communicate and nurture them with email Updates throughout the middle of the funnel, and hopefully close them as a new investor at the bottom of the funnel. Check out a few tips to help you get started with your fundraising strategy and system below: Getting Started: Ask the Right Questions Outline some of the basic questions that a fundraising strategy should address. When getting started with your fundraising strategy it is important to understand why you’re raising, who are you raising from, and the financials of your round. Check out a few example questions below: Why is your startup raising capital? Who is your startup reaching out to for financing? How much capital will your startup raise – now and in the future? When is your startup raising capital? What is your startup’s process for raising capital? Before even building out the rest of your fundraising strategy you need to be able to properly answer the questions above. You may learn that venture capital is not the right financing option for your startup, which is totally fine! (Related Read: Checking Out Venture Capital Funding Alternatives) Related Reading: How to Write a Problem Statement [Startup Edition] Undergo a Valuation of Your Startup Of course, a major aspect of raising capital is the valuation of your company. Setting a valuation is generally a mix of art and science, especially at the early stages. As the team at Silicon Valley Bank puts it, “​​The most basic valuation method borrows from the playbook used by realtors, who assess the value of a home by looking at “comps,” or comparable homes. Mendelson recommends establishing a startup’s valuation that is “on scale” with those of other early-stage companies. The more similar the startup — be it its sector, location or potential market size — the better.” As your company grows and raises later-stage financing, setting a valuation will be based more on the data and metrics from the companies history. This is a great starting point and can be enhanced by adding in other factors like a founding team’s management experience, proven track record, market size, risk, etc. Related Resource: Valuing Startups: 10 Popular Methods Set Milestones Setting clear, specific, achievable, measurable, and time-bound goals is invaluable to creating an effective fundraising strategy. Naturally, investors are incentivized to hold off on investing as long as possible. Why? They want to collect as many data points as possible and see how activity looks with other investors. It is your job as a founder to build momentum and incentivize investors to move quickly. Having set milestones is a great way to wrap your head around a timeline and give you an idea of when you want investors to be moving along by. Brett Brohl of Bread & Butter Ventures estimates that most early-stage companies should estimate 5 months to complete a raise. He breaks it down using the 1-3-1 rule: 1 month — Preparation. Creating a deck, materials, and investor lists to kick off your raise. 3 months — Pitching. Actually out pitching and taking meetings with investors. 1 month — Closing. Finishing up due diligence and legal work to close new investors. Research Your Investors Once a term sheet is signed there is no turning back. With the average founder + VC relationship being 8-10 years it is important to make sure founders are bringing on the right investors. There are different factors and things you should look for in a potential investor. As we put in our post, Building Your Ideal Investor Persona: Location – Where are you located? Do you need local investors? Or maybe you are looking for connections and networks in strategic geographies. Industry Focus – What type of company are you? Where should your future investors/partners be focused? e.g. If you’re a B2B SaaS company don’t waste your time with marketplace-focused investors. Mark Suster suggests that it is best to prioritize investors with companies in your space. Stage Focus – What size check/round are you raising? e.g. If you’re raising a $1M seed round avoid a firm with $2B AUM. If you’re raising a $30M round avoid a firm with $75M AUM. Current Portfolio – What type of companies should be a signal to you that they’re a good fit? Is there a high likelihood they’ve invested in one of your competitors? If so, best to avoid as they likely won’t double down their bet with a competitor to a portfolio co. Motivators – What do want to get out of your investors and what do they want to get out of you? Do they need to match your values and culture? Deal Velocity – Are you in need of capital as soon as possible? Or are you taking your time and looking for strategic investors? Varying investors have different philosophies for the velocity they’re making deals. Point Nine Capital and Kima ventures are both regarded as top firms in Europe. However, Point Nine makes ~10 investments a year whereas Kima makes 1-2 investments a week.” Finding the right investors for your business can be tricky. Using Visible Connect, filter investors by different categories (like stage, check size, geography, focus, and more) to find the right investors for your business. Give it a try here → Determine How Much Capital You Want to Raise Determining how much to raise can also be a daunting task. You need to base this on facts and realistic assumptions around your business. As a starting point, forecast where you’d like your business to be in 12-24 months. From here, you can backfill what resources and hires you’ll need to make to hit those goals. This can be a great starting point for determining how much to raise. From here you can tweak it with interest from investors, the current markets, and more. Related Resource: Building A Startup Financial Model That Works Build Out Your Fundraising Strategy Of course, you can take all of the individual aspects from above and still have a disjointed raise. You can tie them all together to create a fundraising strategy. The above points are a great starting point but need to make sure you have everything in place to reach out to investors. A couple of things to keep in mind: Where will you track your conversations with potential investors? Check out our Fundraising CRM to keep tabs on potential investors (Pro tip: You can add investors directly from Visible Connect, our investor database, to our Fundraising CRM). What data will you need? Do you have clean metrics and financials in place? Having a place to easily pull your key metrics and share them with potential investors will be a huge help. What assets do you need? Do you have a pitch deck ready to go and a plan to make tweaks if needed? Read more: Tips for Creating an Investor Pitch Deck How do you communicate with investors after a meeting? Nurturing potential investors with Visible Updates is a great way to keep them in the loop with the developments of your round. How do you share your pitch deck? Having a great way to share and understand how investors are engaging with your pitch deck and materials is important. Check out our pitch deck sharing tool to learn how it can help with your raise. Remember: Your Strategy Will Stay the Same, But Your Pitch Won’t The idea is that your strategy will stay the same throughout a round. The mechanics, financials, and pitch will vary but the strategy will stay the same. Being thoughtful with your strategy will pay dividends in the long run as your fundraise gets underway. Startup Fundraising Strategy Pitfalls Just like any strategy or process, there are pitfalls that can arise. Luckily, there are thousands of founders that have done it before so there are pitfalls and things you can look out for below: Not Understanding Your Fundraising Stage One of the more common (and avoidable) pitfalls of a fundraise are not being clear with your stage and aspirations. Pitching any investor that lands in your vision can be dangerous. You want to make sure that you are pitching investors that are the correct stage, not too early or late. Focusing Solely on Fundraising As we mentioned earlier, founders are being pulled in a hundred different directions. On top of hiring new employees, retaining current employees, building products, and communicating with stakeholders, founders are responsible for finding financing for the business. Being able to balance the day-to-day as a founder with the pressures of financing is a must. Related Reading: The 23 Best Books for Startup Founders at Any Stage Failing to Provide an Accurate Total Addressable Market (TAM) Analysis At the end of the day, investors want to invest in companies that can turn into massive companies. Modeling your total addressable market and demonstrating how you can turn into a large company is a great way to pique the interest of investors. Learn more to properly model your addressable market in our post, How to Model Total Addressable Market (Template Included). Related Resource: Down Round: Understanding Down Round Funding and How to Avoid It Related Resource: Navigating the Valley of Death: Essential Survival Strategies for Startups What Are Some Other Ways to Obtain Funding? After reading this post you may be thinking that venture capital is not the right financing option for your business. Over the past few years, there has been an explosion of alternative financing options. Check them out below: Related Resource: 6 Types of Investors Startup Founders Need to Know About Accelerators or Incubators Accelerators and incubators are a great way to get your business off the ground. If you find you are too early to raise a seed round, an accelerator or incubator are a great way to wrinkle out your business plan and hit the ground running to find customers and determine if VC is right for you in the future. Crowdfunding Crowdfunding has become increasingly popular as more options become available. The crowdfunding instruments have become easy to manage for founders and more widely accepted across the industry. Related Resources: How to Raise Crowdfunding with Cheryl Campos of Republic Understanding The 4 Types of Crowdfunding Loans As the team at U.S. Small Business Administration puts it, “If you want to retain complete control of your business, but don’t have enough funds to start, consider a small business loan. To increase your chances of securing a loan, you should have a business plan, expense sheet, and financial projections for the next five years. These tools will give you an idea of how much you’ll need to ask for, and will help the bank know they’re making a smart choice by giving you a loan.” Business Plan Competitions Business plan competitions are common at universities and for startups that have potentially not made any progress on developing a product or building a team. The competitions generally reward entrepreneurs with a small check or capital to get started and pursue their vision. Related Reading: How to Write a Business Plan For Your Startup Streamline Your Fundraise with Visible Being able to tie everything together and build a strategy for your fundraise will be an integral part of your fundraising success. Check out how Visible can help you every step of the way below: Visible Connect — Finding the right investors for your business can be tricky. Using Visible Connect, filter investors by different categories (like stage, check size, geography, focus, and more) to find the right investors for your business. Give it a try here. Pitch Deck Sharing — Once you’ve built out your target list of investors, you can start sharing your pitch deck with them directly from Visible. You can customize your sharing settings (like email gated, password gated, etc.) and even add your own domain. Give it a try here. Fundraising CRM — Our Fundraising CRM brings all of your data together. Set up tailored stages, custom fields, take notes, and track activity for different investors to help you build momentum in your raise. We’ll show how each individual investor is engaging with your Updates, Decks, and Dashboards. Give it a try here. Related resource: Top 18 Revolutionary EdTech Startups Redefining Education

Every startup is aiming for a high valuation for their business. In business, valuation is the process of evaluating the present value of the asset in hand, in this case the overall value that a startup is worth. For startups, there are a variety of popular methods folks use to evaluate a business and determine its overall valuation. Different valuation methods are used for different reasons. To help break it down, we’ve outlined 10 popular methods for valuing startups. Related Reading: Pre-money vs Post-money: Essential Startup Knowledge + 409a Valuation: Everything a Founder Needs to Know 1. The Berkus Method Startups are risky. Less than 10% of startups make it past the first year of existence so determining the valuation of a startup, especially a brand new one with only months of lifespan can be extremely challenging. The Berkus Method is an attempted way to assess value without the traditional revenue metrics that many methods take into account for more mature organizations. The Berkus Method quantifies value by assessing qualitative qualities instead of quantitative ones. Value is assessed in the Berkus Method with five main elements. The elements considered within the Berkus Method include value business model (base value), available prototype to assess the technology risk and viability, founding team members and their abilities or industry knowledge, strategic relationships within the space or team, existing customers or first sales that prove viability. A quantitative value can be tied to each relevant quantitative factor with the Berkus Method. Source: Angel Capital Association Pro Tip: When To Use This Method The Berkus Method should be used pre-revenue. It can be a valuable valuation method when a new startup is formed with expert founders or former successful startup leaders at the helm or when a strong, viable product is in place. In these examples, there is enough qualitative information at hand to justify a quantitative value. Related Resource: What is Pre-Revenue Funding? 2. Comparable Transactions Method This valuation method at the highest level is essentially valuing the business based on what consumers would currently pay for it. This is one of the most conventional methods of valuation. To make a comparable transaction valuation, an investor or evaluator will look at companies of a similar size, revenue range, industry, and business model and see what they were valued at or sold for. This method is looking at validation from what others were willing to pay for similar companies in an acquisition or merger and use that to make a fair, or comparable, offer on the company seeking valuation. Pro Tip: When To Use This Method The most common scenario where the Comparable Transaction Method might be used is through a big M&A (Merger and Acquisition) deal. 3. Scorecard Valuation Method When a company hasn’t produced any revenue yet, as an early-stage startup, it can be hard for investors to make a solid bet on the probability of their investments’ success. The Scorecard Valuation Method is one method that relies on the past investments of others taking similar bets and risks on pre-revenue startups. Similar to the comparable transaction method, the scorecard valuation method looks at similar startups or companies in the company at questions’ industry. This valuation method looks at these similar companies and sees what types of valuation they received by other investors. From there, the median will be calculated from the value of all the similar companies’ valuations and this median will determine the average value of the target company. In addition to the median value placed on the competitive landscape, scorecards are looking at the strengths and weaknesses of the market as assessed by other investors and scoring their investment in question weighted with the following criteria compared to the other companies in the space: Board, entrepreneur, the management team – 25% Size of opportunity – 20% Technology/Product – 18% Marketing/Sales – 15% Need for additional financing – 10% Others – 10% A company may be valued higher than the median with the scorecard method if the size of opportunity or board/management team is exceptional quality or vice versa, maybe docked if the tech is strong but the leadership is assessed as in-experienced. Pro Tip: When To Use This Method This method may be used by a startup that is in a crowded space such as marketing tech, sales tech, fintech etc.. and is pre-revenue; With a lot of similar or adjacent companies raising rounds and receiving valuations, a scorecard can be used successfully because there are is a lot of adjacent validation in the market. 4. Cost-to-Duplicate Approach Startups are a risky investment for many reasons, but one big one is that it typically takes a lot of capital to run and scale a business and many startups struggle to manage their run rate and burn rate efficiently. The Cost-to-Duplicate Approach to valuation considers all costs and expenses associated with the startup. The costs and expenses reviewed include the development of the product and the purchase of physical assets. A fair market value is then determined based upon all the expenses at hand. The negative of using this type of valuation approach is that it does not consider the future growth and potential of the company, only the current efficiency based on expense and it also doesn’t take into account intangible assets such as the talent of the leadership team, brand, patents, etc. Pro Tip: When To Use This Method The Cost-to-Duplicate Approach might be the right approach to asset valuation when the product is simple and won’t require a lot of expensive development, the team is lean and the burn rate of capital is extremely slow or even non-existent. Lean startups with one or two folks at the helm, or with a founding team that isn’t taking a salary yet could use this method to justify their first infusion of cash to start taking a salary or start making bigger financial moves. 5. Risk Factor Summation Method Every venture capital fund or any investment firm is spending time unpacking the potential risks of each and every new investment they make. The Risk Factor Summation Method is used with risk as the primary method for evaluation. This approach values a startup by taking into quantitative consideration all risks associated with the business that can affect the return on investment. An initial value is calculated (possibly even using one of the other methods discussed in this post) and then the risks are assessed, deducting or adding to the initial value calculation based on said risks to the return. Some of the different kinds of risks that are taken into account are management risk, political risk, manufacturing risk, market competition risk, investment and capital accumulation risk, technological risk, and legal environment risk. Pro Tip: When To Use This Method This method is often used by investors when looking at a new space or as a second pass on assessing the value of a potential investment. 6. Discounted Cash Flow Method This method is predicting the valuation of a company based on its assumed future cash flows. The hope is that the DCF (Discounted Cash Flow) is above the current cost of investment resulting in projected positive return and higher valuation. A discount rate is used to find the value of present future cash flows. For example, the discount rate might be the average rate of return that shareholders in the firm are expecting for the given year. That percent (maybe 5%, 10%, etc.) is then used to make a year-over-year assumption. This hypothetical informs investors that based on the current cash flow and discount rate chosen to asses, the expected cash flow can be anticipated from this investment. Pro Tip: When To Use This Method This is a great valuation method to use for a company that has relatively predictable and stable up and to the right growth up until the time of investment. Related resource: Discounted Cash Flow (DCF) Analysis: The Purpose, Formula, and How it Works 7. Venture Capital Method This method is one of the most common, if not the most common method used for evaluating startups that are pre-cash flow and seeking VC investment. The VC Method looks at 6 steps to determine valuation: Estimate the Investment Needed Forecast Startup Financials Determine the Timing of Exit (IPO, M&A, etc.) Calculate Multiple at Exit (based on comps) Discount to PV at the Desired Rate of Return Determine Valuation and Desired Ownership Stake Its ultimately a quick, rough estimate informed by as much information as is available based on the market, comps, any existing quantitative and qualitative info from the company at hand, and an assumed amount of risk from the VC Firm. Related Resource: A User-Friendly Guide on Convertible Debt Pro Tip: When To Use This Method Most startups should expect that this valuation method will be applied when seeking early rounds of funding, especially from popular venture capital funds. 8. Book Value Method The Book Value of a company is the net difference between that company’s total assets and total liabilities. The idea of this valuation method is to reflect what total value of a company’s assets that shareholders of that company would walk away with if that company was completely liquidated. Book Value is equated to the carrying value on a balance sheet. To calculate book value, look at the total common stockholder’s equity minus the preferred stock and then divide that number by the number of common shares in a company. Pro Tip: When To Use This Method This valuation is extremely helpful in determining if a company’s current stock value is under or overpriced when attempting to determine overall valuation. 9. First Chicago Method Named after the VC arm of The First Chicago Bank, this valuation method uses a combo of multiple-based valuation and discounted cash flow to make a valuation of a company. Essentially, this method allows you to take into account many different possible outcomes for the business into the valuation – to keep it simple, you can think of this method as taking into consideration the business’s best case scenario, worst-case scenario, and average scenario. Looking at all 3 scenarios, an estimate is made as to how likely each scenario is. Next, you multiply the probabilities by their respected values and add them up. This gives you a weighted average valuation from the combo of the 3 most likely scenarios – valuing the business on the average of what will probably happen. Pro Tip: When To Use This Method This valuation method is recommended for dynamic, early-stage growth companies. It’s used when companies have a future with many possible outcomes that could come about based on the next decisions made. 10. Standard Earnings Multiple Method A multiple is a fraction in which the top number (the numerator) is larger than the bottom number (the denominator). The earnings of a business are defined as income or profit. The Standard Earnings Multiple Method looks at the earnings of the business over an industry-standard multiple. Every industry and sector may have a slightly different average multiple. Pro Tip: When To Use This Method One common scenario where this method is used is to measure stock pierce earnings with price/earnings ratio, which measures stock price to earnings. P/E ratio tells what the market (stock buyers) are willing to pay for the company’s earnings with a higher ratio indicating that people are willing to pay more. Share Your Startup Valuation With Visible Use Visible to communicate with your current investors. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. Related Resources: A Complete Guide on Founders Agreements Who Funds SaaS Startups? Types of Venture Capital Funds: Understanding VC Stages, Financing Methods, Risks, and More Top Creator Economy Startups and the VCs That Fund Them

Startups have different options when it comes to financing. One of the most popular options is venture capital. To better understand if venture capital is right for your business, check out our breakdown of different types of venture capital below. If you believe you are ready to raise venture capital, understanding how and why the function will improve your odds of raising capital. To learn more about raising venture capital, check out our “All-Encompassing Startup Fundraising Guide.” Related Resource: Types of Venture Capital Funds: Understanding VC Stages, Financing Methods, Risks, and More What are the Types of Venture Capital Funding? As venture capital continues to grow and evolve so do the types and expectations of funds. As the team at Crunchbase found, venture funding by year is growing, mainly between early-stage and late-stage funds: Related Resource: Exploring VCs by Check Size Learn more about different types of funding below: Seed Capital Seed funding, which oftentimes includes “pre-seed” funding, is generally the first round of financing for a startup. There typically tend to be funds that specialize in pre-seed/seed-stage financings. However, as the seed stage has continued to grow so have the funds — later stage funds are now moving their way down to make seed investments. As the team at Crunchbase put, “One of the reasons many venture firms are stockpiling funds to invest into seed startups is that getting in at the earliest stages with a young startup lets those investors have a say in crucial decisions early on.” Check out the average seed size (from “large” investment funds) over the last 10 years below (from the team at Crunchbase): VCs will typically get more attractive terms as they are taking on more risk at the seed stage. Because of this, seed-stage investors oftentimes make more investments in the hopes that a small percentage of their investments will turn into huge returns (learn more about the power-law curve in VC here). Related Resource: Seed Funding for Startups: A 101 Guide Early Stage Capital Post seed or pre-seed funding comes to Series A and Series B funding. While some might categorize them as a later stage, both are earlier stage financings that come post-seed round. Early-stage capital is often when a company might have some traction and promise that it can grow into a massive company that is worthy of an exit. Related Resource: How to Model Total Addressable Market (Template Included) Related Resource: The Rise of Venture Capital in Utah: A Look at Utah’s Top 10 VC Firms Related Resource: Breaking Ground: Exploring the World of Venture Capital in France Expansion Capital Once a company has proven they have product-market fit, a massive market, and a repeatable sales process — chances are they are ready to expand. With this comes larger check sizes that will help you put your growth strategies to work. Venture funds at this stage are likely huge funds that make fewer investments with larger check sizes. At the point of investment, most companies will have proven success to in turn will raise at higher valuations. Related resource: Understanding the Role of a Venture Partner in Startups Late Stage Capital Lastly comes late-stage capital. These are borderline private equity funds and can be used to bridge financings for larger companies. This might be a final injection before a company sets to go public or to fund expansion into a totally new market. Related Resource: Private Equity vs Venture Capital: Critical Differences Rolling Funds More recently, “rolling funds” have become a point of interest in the space. While they are not typically dedicated to a specific stage (like the examples above) the way they raise financing and treat the general partner to limited partners relationship differs. Learn more about rolling funds here. Related Resource: 12 Venture Capital Investors to Know Venture Capitalist Fund Structure To better improve your odds of raising venture capital, you need to understand how they function. When pitching investors you’ll want to keep a few of these things in mind so you can fit into their duties as a VC. Check out a visual of how venture capital funds are structured below: Related Resource: A Guide to How Venture Capital Works for Startups and New Investors Guide A couple of key terms to understand when it comes to a venture funds structure: 1) Venture Fund As the Bank for Candian Entrepreneurs puts it, “A venture capital (VC) fund is a sum of money investors committed for investment in early-stage companies.” A venture fund is simply capital that is ready to be deployed by the venture capital firm (or the management company). 2) Management Company The management company is the people behind the fund itself. Not be confused with a venture fund. A venture management company can raise multiple funds. As the team at AngelList writes, “A management company is a business entity created by a venture firm’s general partners (GPs). It’s responsible for managing a venture firm’s operations across its funds.” Management companies often receive a management fee from their funds to help deploy and grow their funds. A management company is responsible for prospecting investments, collecting fees and expenses, branding, and more. 3) General Partner (GP) A general partner is someone who manages a venture fund and likely the management company. As defined by the team at Angel List, “A GP is a manager of a venture fund. They may be a partner at a large VC firm like Sequoia, or an individual investor using AngelList. Like fund managers in other arenas (stocks, mutual funds, crypto, etc.), they analyze potential deals and make the final call on what to do with the money they manage.” General partners are typically paid between their carried interest and management fees. Carried interest is typically where a general partner makes a living. Typically carried interest for a GP is 20% which means that 20% of a funds profits will be paid to the GP. It is worth noting that GPs oftentimes invest their own money so they have skin in the game. You can boil down a general partner’s responsibility into 2 key things — deploying capital in high-quality companies and raising future capital. 4) Limited Partners (LPs) You might be asking yourself where does capital for a venture fund come from? The answer is limited partners. Limited partners are generally much larger funds and are looking to diversity their investing via venture capital funds. Traditionally, limited partners tend to be: University endowments Sovereign funds Family offices Pension funds Insurance companies Etc. Because VC funds are competing with traditional assets, it is vital that they provide outsized returns to improve their odds of raising venture capital in the future. Learn more about the power law curves in our post, “Understanding Power Law Curves to Better Your Chances of Raising Venture Capital.” 5) Startups Of course, there are the actual startups and investments that a venture fund are making. For a startup to be deemed venture-worthy they generally have to operate in a large market, have promising economics, and the ability to create a massive return for their investors (and their LPs). Related Reading: Building A Startup Financial Model That Works Limited Partnerships & LLCs Role in VC Fund Structure As the team at Investopedia puts it, “A limited partnership (LP)—not to be confused with a limited liability partnership (LLP)—is a partnership made up of two or more partners. The general partner oversees and runs the business while limited partners do not partake in managing the business. However, the general partner of a limited partnership has unlimited liability for the debt, and any limited partners have limited liability up to the amount of their investment.” Because LPs do not partake in managing the business (e.g. the venture firm) they are relying on the GP and venture firm to be experts at investing. At the end of the day, every venture fund and firm wants to set out and raise a new fund every 10 years or so. This means that GPs need a strong record with LPs so when they seek further capital they have someone they can lean on. This also means that LPs are expecting massive returns as they are trusting and deploying their capital with a general partner, likely in a space lesser-known to them. Related resource: What is a Capital Call? Three Examples of How Returns Are Generated Of course, the goal of any venture fund is to generate returns for its limited partners. As we put in our post on power-law curves, “A small % of VC funds take home a large % of venture returns. VCs are constantly working to make their way into the “winning” part of the curve so they can continue to attract capital from limited partners. How does a VC fund become a “winner?” The best VC funds portfolio returns also follow a power-law curve. A small % of a VC funds investments will yield the majority of their returns.” This means that VCs need to create liquidity and get returns to their investors so they can go out and raise capital again. This generally comes in 1 of 3 ways: Related resource: Carried Interest in Venture Capital: What It Is and How It Works 1) Mergers and Acquisitions (M&A) One of the most common ways that a startup exits are via a merger or acquisition. As put by the team at Investopedia, “Mergers and acquisitions (M&A) is a general term that describes the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.” The terms of the merger or acquisition will impact how a VC is paid back. For example, an investor that invested at the seed stage will likely be greatly diluted if the exit is later in a companies lifecycle. Related Resource: From IPOs to M&A: Navigating the Different Types of Liquidity Events Related resource: What is Acquihiring? A Comprehensive Guide for Founders 2) A Buyout of Shares Less common is that startups shares will be bought out. This means that a new entity is taking a larger or majority stake in a company. This could come via a specific fund exiting their position or a founder finding liquidity. No matter the case, the terms, and conditions will greatly impact any fund. 3) Startup Reaches an IPO Lastly, there is an IPO (initial public offering). Becoming rarer, an IPO has the opportunity to create huge returns for a venture capital fund — especially their seed and early-stage investors. Looking To Get Funding for Your Startup? Understanding if venture capital is right for your business is a small part of the battle. Determining how to raise capital, what investors to raise from, and pitching investors is where the real fun begins. Having a system in place to raise venture capital is a great way to increase your odds of raising capital. Related Resource: All-Encompassing Startup Fundraising Guide Related Resource: 8 Most Active Venture Capital Firms in Europe Related Resource: 7 Best Venture Capital Firms in Latin America Related Resource: Exploring the Growing Venture Capital Scene in Japan If you’ve read this post and determined that venture capital is a good fit for your company, let us help. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

When communicating with investors in your fundraising funnel, you must make sure you tell a compelling story about why they should invest in you. Pitch decks are a powerful tool that can help you tell that story. Different investors will have different opinions about pitch decks. Some investors might want to receive them before the meeting, some might only want them sent via PDF or link, and some investors might not care if you have a pitch deck at all. Through all the noise, one idea we have seen emerge is having a send-away (or email deck) that founders can share with investors before a meeting. Brett Brohl of Bread & Butter Ventures recommends a four- or five-slide deck that can be easily shared with potential investors. While there is no prescriptive pitch deck template that will work for every startup, here is a 5 slide example email deck we have seen work well for founders (or check out the example deck directly in Visible here): Slide 1 — Title Slide Pro tips: Make sure your logo is high quality and easy to read Feel free to include a one sentence description of what your company does Want to use this template? Download here. Slide 2 — Problem Slide Pro tips: Clearly articulate your problem Use data to demonstrate how big the problem is Use stories and pain points to build empathy from investors Want to use this template? Download here. Slide 3 — Solution Slide Pro tips: Clear overview of what your solution is Use data and stories from customers to help investors understand why your solution is best Want to use this template? Download here. Slide 4 — Market Slide Pro tips: Make sure to use a bottoms up approach when modeling TAM (more from Gale Wilkinson here) Show the market in dollars VCs need huge exits — demonstrate why you can win your market Want to use this template? Download here. Slide 5 — Team Slide Pro tips: High quality headshots for key teammates Include relevant experience and skills Want to use this template? Download here. Related Resources: Visible Connect, our investor database Building Your Ideal Investor Persona How to Build an Investor List with Gale Wilkinson of Vitalize All Encompassing Startup Fundraising Guide Investor NPS: How likely are you to refer your current lead investor to fellow founders? Some Advice Before You Hit the Fund Raising Trail

Pitch Decks are put together by startup founders when they are seeking a round of investment funding to back their business. A Pitch Deck tells the story of your company, the problem it solves, why it matters, and most importantly why a potential investor should care and want to donate thousands if not millions of dollars. Every investment a venture fund or private investor makes is a calculated risk and a strong pitch deck is often the key tool a founder has to showcase the risk is worth it. Investors care about how they are going to make their money back plus a profit and want to see in your pitch deck how this will be possible for them. However, According to TechCrunch, investors only spend on average only 3 minutes and 44 seconds reviewing a pitch deck. Other sources have found that time to be less than 2 minutes. Its a safe bet to assume you have less than 5 minutes of an investor’s time to articulate why your company deserves their backing so taking the time to build a pitch deck that packs a punch in 5 minutes or less is critical. Communicating all that you need to in a pitch deck, to summarize why your business is worth a big investment, is much easier to do in concept than in practice. A strong pitch deck should be simple and clear but still compelling. Building a strong pitch deck is a skill founders should take time to learn as early on as possible to ensure every 5 minutes or less spent on their deck by VCs gives the best chance for investment and future success. To assist, we’ve built out a step-by-step guide to help you build a quality pitch deck for your business. Related Resources: 23 Pitch Deck Examples for Any Startup 1. Choose the Right Tools Let’s take it from the beginning – choosing the right presentation tool to build your pitch deck. This may seem like a small decision, but in reality, there are pros and cons to building your pitch deck on different presentation solutions. Keynote This might be the best tool if you’re going to have a brand or product designers working on your deck. Keynote comes installed on all Mac computers and has tools and functionality that is a bit more detailed and flexible allowing trained designers to create custom, clean, original designs and layouts. If you’re not a designer or don’t have design resources available for your deck creation, Keynote may not be a strong choice as it can be a bit hard to navigate and collaborate on without the knowledge and eye for all of its features. Google Slides Google Slides is a strong free option for crafting simple decks. Anyone can use Google Slides and collaboration is seamless. If you’re a solo founder or an extremely lean, cash-strapped team without design resources, Google Slides will allow you to build a super clean deck that’s easily shared. Past a certain level of company maturity, however, Google Slides may not be a strong option due to its lack of customization on the design side – it’s much harder to demonstrate the product and brand design in Google Slides. PowerPoint Another good free option, PowerPoint can be used on the web for free by anyone with a Microsoft account. Similar to Google slides, this can be a good simple, clean option for early founders without design resources. The paid version of PowerPoint is a bit more robust and can allow for a more mature, established design (even without design resources). The one main con of using PowerPoint for your pitch deck is that the presentation experience can often be clunky and the shared version isn’t as friendly to access as a Google slides or Keynote for non-Microsoft users. Canva For established startups with a clear brand and product aesthetic, Canva can be a great option as it provides more customization and design options than Google Slides and PowerPoint. Even the free version of Canva allows you to access many strong Canva-specific templates for customized pitch decks. Because Canva is a web-hosted platform that can make it challenging to present in some circumstances and doesn’t allow for as smooth off-line presentations, however, Canva is a strong design-centric option that is easy to use for founders and not as technical as Keynote. Later on, we will dive into the specifics of pitch deck design, but once you select your pitch deck creation tool, you can start exploring templates and popular deck flows that successful startups have used. Here at Visible, we recommend starting with these free pitch deck templates to generate some ideas. 2. Craft Your Message Knowing your pitch deck will most likely only get 5 minutes or less of review, crafting a clear message that tells the story of your company and a clear business plan including details like financial models and product roadmap is critical. Crafting your message can feel overwhelming knowing the window of review will be so small. There are many formats and philosophies you can use to craft a strong pitch deck. A popular methodology that many founders follow is Guy Kawasaki’s 10/20/30 rule – 10 slides that are readable in 20 minutes or less (aim for less here!) and use a 30 point font. This is a good structure for framing the flow and digestibility of your content. For the actual content, the message of this 10 slide deck, we suggest thinking about the message in 3 distinct parts: The Company Purpose, Problem, and Solution. Company Purpose This is the most important part of your message to keep simple. Articulate, ideally in 1 slide and only 1-2 sentences, why your company exists. The company’s purpose is often well articulated as a mission statement. With the company purpose, you are leading into the problem but not particularly addressing the problem just yet. You are simply sharing why your company exists. A few examples from successful companies on the market: Twitter: To give everyone the power to create and share ideas and information instantly, without barriers. PayPal: To build the Web’s most convenient, secure, cost-effective payment solution. Tesla: To accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible. The Company Purpose should articulate in a simple way, why your business exists. Establish a clear, strong mission statement that articulates this and the rest of the deck will be built off of that articulated goal. Problem Now that you’ve established the company’s purpose, establish the problem that the company will be solving. This section shows not only the problem that exists, but the opportunity for the company or solution that can solve said problem. To ensure you are keeping the problem section clear yet powerful, lean on as much data as you can to validate the impact of the problem at hand. If there is a certain number of people or businesses that are impacted by this problem, paint that picture. If there is a cost associated with this problem or money currently being spent in the space the problem exists in, articulate that as well. According to TechCrunch, 73% of successful pitch decks include a breakdown of the market size and opportunity and 46% address “why now” or why this problem should be addressed at this point in time. Another way to think about articulating the Problem is to think about articulating the scope of the opportunity – ie, if the problem is this big, this is the opportunity that exists to solve it and this is why now is the right time to do so. Similar to the Company Purpose, keep the Problem explanation brief – 2-3 slides is our recommendation for tackling the Problem section. Solution The Solution section of your pitch deck should be the most comprehensive. In theory, your solution is your comprehensive offering from your product or service to your marketing and customer success. At the end of the day you want investors to be able to answer, “What is their competitive advantage or “secret” sauce?” Because of this your solution might fall into a few slides but oftentimes you can still create a specific single solution slide the example below: Why Now? Investors are oftentimes incentivized to collect as much data as possible during a raise. You need to give them the information they need to move quickly and invest today. Using market data and your own display why now is the right time for them to invest. Market Size and Opportunity Venture capital follows a power law curve. Investors are looking for startups that are poised to dominate a market or take a solid percentage of a massive market. In order to help win over investors, demonstrate that your company can become large enough to create significant returns to their investors (Uber is a great case study in how to properly model your market). Related Resource: How to Model Total Addressable Market (Template Included) Product This is the slide where you introduce your company’s product and how it solves the problem at hand. While investors will certainly have questions about the technical aspects of the product down the line, for the sake of a concise deck try to keep the product slide high level and easy to understand. Make this slide as visual as possible including product screenshots or even a light click-through animation. Competitive Landscape A big question for investors if they like the fiscal opportunity of the problem at hand is an understanding of who else is trying to solve this problem. Don’t shy away from highlighting competitors. Competitors validate that there is an appetite in the market. As you highlight other competitors in the space, be sure to highlight how your product and company are different and better for the problem at hand and also call out where there is missed opportunity in the market that your company can cover (this is especially important in a crowded space like marketing technology). Business Model Now that you’ve shown the opportunity in the market and what your solution is to address the problem, it’s important to talk through your plan to take this product to market or how you are currently taking it to market as well as how you plan to acquire customers. Check out our deep look at the Customer Acquisition pitch deck slide to ensure you capture all elements of your business model for investors. Financials and Metrics Even if investors like your idea, at the end of the day their choice to invest in your business is a financially motivated one. The Financials and Metrics Slide is a key slide to win over the support of a potential investor. Highlight how much money you have raised to date, your key growth metrics over the lifespan of the business so far, and your plan for the investment round in question. To ensure all key startup metrics are addressed in the Financials Metrics slide, take a look at our overview of key startup metrics. Related Resource: Important Startup Financials to Win Investors Team Use the Team Slide as a final push of confidence that an investment in your business is a good one. Highlight the folks on your executive team and what they bring to the table. For example, highlight the past successful companies they have been a part of and helped build, any relevant industry-specific experience, or any unique skills that they bring to the table that give your company a competitive advantage. The Team slide is also a great way to humanize the company and connect with your potential investors by putting faces to name. Additional Slides to Consider If you have room in your deck, consider adding a slide that highlights the product roadmap (especially if this furthers the financial opportunity and “why now” argument for your company). Any existing partnerships that you have in your company that add to the fiscal attractiveness of your business may be worth a slide after you highlight your business Model as well. Finally, if the round you are raising is for a later stage round and you can see an exit trajectory insight, it may be prudent to highlight your exit plan on a slide when you discuss financials and metrics to show a more accurate picture of the type of return your potential investors could see sooner rather than later. 3. Level Up Your Pitch Deck With These Tips After you’ve spent time designing a well-thought-out and clear pitch deck that articulates the company’s purpose, problem, and solution and have built a version you feel confident in, take the time to consider ways to take your pitch deck to the next level before taking it into the boardroom. Tailor The Pitch to Your Audience Personalization goes a long way. Make sure you find simple but powerful ways to tie in your pitch to fit the audience you’re talking to. Prior to making your rounds looking for an investment, do your research on the possible meetings you could have. Organize a list of VCs or investors by tiers based on who you would most like to work with. Additionally, take the time to understand each group’s investing philosophy. Prior to any pitch, make sure to tailor your opening talk track and ask “why now” to fit their specific investment philosophy and showcase why this opportunity would be a great one for their firm specifically. Our Visible Connect network is a great database of VCs that will aid in this process. Be Transparent, Accurate, and Data-Forward Don’t leave anything out. If your company has had a period of setbacks or pivots, don’t shy away from highlighting that. Additionally, take out any fluff from your presentation that could be seen as opinion or too high-level and instead back up every point you plan to make with hard data. Show, don’t tell. Numbers are the clearest way to give a transparent, credible view of your business and the opportunity at hand. Read and Revise (Now Do it Again!) Remember that you’re going into each meeting asking for thousands if not millions of dollars in support. This is a serious ask and you’d hate for a great opportunity to be jeopardized due to some simple errors. Once you think your pitch deck is in its most perfect state, read and revise it again. Now do it again. Take every possible second you can to look for spelling and grammar errors, design and presentation errors, and ensure it’s as clear as possible for any type of investor to process. Practice the pitch to peers and existing partners and employees as many times as possible to get multiple sets of eyes on it for review and revision. Related resource: Our Guide to Building a Seed Round Pitch Deck: Tips & Templates 4. Follow Pitch Deck Design Best Practices Once the content is perfect, take the time to ensure the deck design is up to par. A few best practices on Pitch Deck design to consider: Use a Consistent Visual Style: This will keep the presentation looking clean, easy to follow, and straightforward. Simple is always better so settle on a design theme and format for your slides and stick to it. Consider Bullet Points: Too many words on a slide can make an investor’s (or anyone’s) eyes glaze over. Minimize the amount of text on each slide by bulleting out the key points. These will be easier for the investors to remember and remove any unnecessary fluff from your deck. Keep Graphics simple: If you are going to include graphics or visual elements alongside your bulleted text, make sure they are valuable and not elements that are distracting from the purpose of the deck. Keep visual elements simple and make sure they serve a purpose. For example, product screenshots or data graphs are a good way to present information in a different but still valuable way. For more pitch deck design best practices, check out YCombinator’s guide on best practices from the thousands of pitches they see every year. Related Resource: Pitch Deck Designs That Will Win Your Investors Over 5. Prepare to Deliver Your Pitch Even the most perfect pitch deck won’t stand a chance without the right delivery. Practice makes perfect so ensure you have a clear plan in place and spend the time preparing to deliver your pitch. Determine who on the team is best to present. Pitches can be done by one leader with the strongest presentation skills or divided up across the team. The perks of multiple folks presenting ensure that there is coverage on different elements of the business and provide a good natural change to keep interested throughout the pitch. Regardless of who decides to pitch, make sure they are mock pitching and rehearsing as many times as possible. Get feedback from existing investors, partners, or peers and practice daily. In addition to preparing to deliver your pitch in person, make sure the way you are going to digitally deliver your pitch is glitch-free, clean, and easy to digest. Check out our template for sharing your pitch deck with potential investors here. Additionally, Visible can be a helpful platform for managing all elements of the fundraising pitch deck process. Use Visible to track and manage potential investor relationships and report out to existing and future investors as your business grows. Learn more here. 6. Share Your Pitch Deck with Visible Just as a sales team has dedicated tools for their day-to-day, founders need dedicated tools for managing the most expensive asset they have, equity. Our community can now find investors, track a fundraise, and share a pitch deck directly from Visible and completely integrated. Want to see a Deck hosted on Visible in action? Take a look here. Manage your fundraise from deck to check with Visible. Give it a try here. Related resource: Business Plan vs Pitch Deck: The Differences and When You Need Them

While a business plan might feel like a dying practice for startups there are countless benefits of building out and thinking through a plan. A startup business plan can be the backbone of pitch decks, investment memos, and strategy as you set out to build your startup. Related Reading: How to Secure Financing With a Bulletproof Startup Fundraising Strategy In our guide below, we lay out 8 concepts that will help you build a business plan as you begin your startup journey. You can skip around to specific sections below: Eight Key Concepts To Include In Your Business Plan As we mentioned above, the 8 concepts below are a great starting point to think through when forming your business. Inevitably, you’ll face questions and issues around all of the issues so having a well-thought-out plan and approach to each will pay dividends as you build your business. Related Resource: How to Create a Startup Funding Proposal: 8 Samples and Templates to Guide You 1. Build an Executive Summary As put by the team at Inc.com, “The summary should include the major details of your report, but it’s important not to bore the reader with minutiae. Save the analysis, charts, numbers, and glowing reviews for the report itself. This is the time to grab your reader’s attention and let the person know what it is you do and why he or she should read the rest of your business plan or proposal.” An executive summary is an opportunity for you to layout the contents of your business plan and set the stage for what is to come. Avoid going too deep into detail and rather lay out the backbone of your plan. You want to balance getting the reader’s attention with supplying the information they need to get a grasp of your report. A few items that we suggest you include: What is this product service/service? Who will benefit from this product/service? Who is competing with this product/service? How will you execute on selling your product/service? As you continue to build out other sections of your business plan, the executive summary might change as you tweak other components. Related Resource: A Complete Guide on Founders Agreements 2. Identify Your Business Objectives First things first, you will want to layout the objectives of your business. This should be a deeper dive into what exactly your company does and how it is set up. This will be your opportunity to highlight your market and communicate why your product/service is set up for success. This is also a chance to hit on the mechanics of your business (structure, model, etc.). A few items that we suggest including when laying out your business objectives: Gives investors a brief overview of what your company does Communicate the value of your product/service Highlights the market opportunity You will have an opportunity to go into more depth in each of the details above later in the plan so make sure you are giving just enough detail to build interest and give investors a solid understanding of your objectives. 3. Highlight Your Companies Products and Services Next, you can start digging into the fine details of your products and services. You will want to build excitement here and let investors know exactly what your product offers and why it is built to solve a big problem and win a market. This is a great opportunity to present any qualitative or quantitative data you have about the market and your ideal buyer. Layout the problem and make your investors feel the pain that you are trying to solve. For example: Let’s say you have an application that helps people find and book a camping site. You might want to lay out the problem you are solving below: Next, layout how and why your solution is solving the problem like the example below: A few other things you will want to make sure you include when highlighting your product or service: Face-to-face research on problems in the market How does this product solve the market’s problem? Data that suggests people are feeling the same pain point Stories from existing or potential customers that highlight the pain points The goal here is for you to have your investors understand the problem and start building empathy. Related Resource: How to Write a Problem Statement [Startup Edition] 4. Define Market Opportunities After you have laid out the problem and solution, you can start displaying the hard data behind the market. Venture capital follows a power law curve so chances are investors will want startups to demonstrate a large market and the potential to capture a large percentage of the market. One aspect is modeling your total addressable market. You’ll want to demonstrate a large market that piques the interest of investors. Make sure to use real numbers and a bottoms-up approach here. In addition to demonstrating your addressable market, we suggest including a few of the ideas below: Do research on the target audience Who is the target demographic for your product/service? What is the target location for your product/service? What is the typical behavior for your target audience? Related Resource: When & How to Calculate Market Share (With Formulas) 5. Complete Your Sales and Marketing Plan Now that you have demonstrated your product and the greater market it is time to start digging into the specifics of you will attract and close new customers. At the end of the day, bringing in revenue is the goal of a business to having a strong go-to-market strategy is an important aspect of your startup’s business plan. If you’ve correctly laid out your market and the demographics of your target market in the previous sections, investors should have a strong understanding of the space and will be able to have a conversation around your sales and marketing strategies. You don’t need to go into overwhelming detail here but laying out what channels you will rely on and how you will execute and hire on those channels is necessary. For example, if organic search is a strategy you can lay out what you are doing to execute on that channel but do not need to mention the specific posts and content you are creating here. To make sure you nail this section, be sure to include a few of the following: Sales channels Marketing objectives Early data points and success If you do not have any hard data points yet, no worries. Use your research and market data to build compelling cases for different acquisition strategies. Related Resource: 7 Startup Growth Strategies 6. Include a Competitive Analysis Report Of course, investors will want to know about the competitors operating in your market. They will want to understand how you are differentiated and why you are poised to beat them in the space. You’ll want to make sure you are clearly demonstrating who is operating in what aspects of the space. Compare your product or offering to them. Remember to be honest here as investors always have the ability to double-check your research and will do their own analysis of your competitors. A common way to show this information is by using a market map. Check out an example of what a market map looks like below: Related Resource: Tips for Creating an Investor Pitch Deck 7. Structure Your Operations and Management Teams In the early days of a business, most investors will be taking a chance on the founding team and management team. They will want to look at your team’s past experiences and skillset to understand why they are the ones that should execute on a problem. Highlight what managers and leaders are responsible for what aspects of the business and use their past experiences and skillsets to show why they are fit for the role. You can also use this as an opportunity to demonstrate hiring plans and how your teams will be structured as you continue to grow. Here are a few examples of what you might want to include: Define your team of experts and what tasks they are responsible for. Consider adding an organizational chart to clearly outline your companies structure 8. Financial Analysis Finally, you should include financial analysis for your business. Depending on who you are sharing your business plan with might depend on the level of financial analysis you would want to share. If you already have financials and data be sure to include the last 12 months of data. Make sure the data is incredibly easy to understand decipher. You don’t want someone to be looking at your financials and take things out of context to draw conclusions about your business that might be wrong. Another aspect you’ll want to include is your financial forecasts and goals. While chances are that your forecasts will be wrong it is a good way to demonstrate to your investors that you are thinking about your business in the right way. Check out why Gale Wilkinson of Vitalize Ventures likes to see early-stage founders model their future below: A few other items that might be worth including with your financials can be found below: Include revenue Major expenses Salaries Financial goals and milestones Related Resource: 4 Types of Financial Statements Founders Need to Understand Related Resource: A User-Friendly Guide on Convertible Debt Share Your Business Plans With Visible Once you have your business plan in place it is time to hit the ground running and collect feedback on your business plans and objectives. Use our Update and Deck sharing tools to share your plans with potential investors and stakeholders along the way. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

At the core of every business or startup is a big problem they are trying to solve. Founders are putting forth their expertise and skills to build a solution to help solve this big problem. In the early days of building a business, many investors and stakeholders will ask to see a business plan to address how you are attacking a market and solving a problem. When going out to raise capital (from angels, VCs, etc.) making sure that investors clearly understand the problem you are solving is crucial. One of the key aspects of a business plan is the problem statement. Learn more about business problem statements and how to craft one for your business below: What is the Purpose of a Problem Statement? As we mentioned above a problem statement is part of a business plan. It should be an overarching thing you are trying to solve that guides most decisions you are making as a business — product development, go-to-market strategies, customer support, etc. A business problem statement defines exactly what problem you are helping your customers solve. It should be fairly simple but can be the backbone of your decision-making and business strategy. Note: While you might not necessarily be sharing a “problem statement” with investors during a fundraise, it oftentimes can be useful when crafting your pitch deck. Learn more about crafting your first pitch in our post, “Tips for Creating an Investor Pitch Deck” Best Practices for Writing a Problem Statement A problem statement is fairly short and straightforward, there are best practices that you’ll want to keep in mind. An erratic or longwinded problem statement can lead to more confusion and questions, in turn leading to more work for you as a founder. Check out our best practices and tips for writing your problem statement below: 1. Clearly Define The Problem First and foremost, you need to make sure that the problem you are solving is incredibly clear and well-defined. If you are wishy-washy with the problem, that will show a lack of conviction in the eyes of an investor or stakeholder that might be evaluating your business plan. For example, let’s say we are a software company called Adventure App that is helping campers find lesser-known camping spots. Our problem could be, “Finding a camping spot requires existing knowledge of a location and deciphering of local rules, boundaries, and signage that can be intimidating to new campers.” 2. Assess Who The Problem Impacts Naturally, a problem statement solves the big problem you are helping your customers accomplish. However, a problem statement can have an impact on different stakeholders and aspects of your business. A few questions you might want to ask yourself when understanding who your problem statement impacts: How are your customers impacted by the problem? How are your employees impacted by this problem? How is your overall business impacted by this problem? Using our Adventure App example above, if we are helping customers find more camping spots, our employees are likely impacted because they enjoy the outdoors and camping themselves and have empathy for the customers. Related Reading: How to Build A Startup Culture That Everybody Wants 3. Provide Possible Solutions Finally, a well-written problem statement should offer a solution and detail why it will help solve the problem. There might not necessarily be a single solution but an approach as to how you and your team will execute on the solution. Continuing on with our Adventure App example, our solution might be “Creating easy-to-use software and tools that anyone can access from the outdoors to enhance their experience.” 3 Ways To Enhance Your Problem Statement Once you have your first iteration of a problem statement down on paper, it is time to start dialing in the statement and make sure it is something that is easily understood by investors and stakeholders, even if you are not in the room to explain the specifics. 1. Highlight The Pain Points Of The Problem When crafting your problem statement you want to make sure anyone reading it can really understand the pain points that your potential customers are facing. Being able to hone in the specifics will help anyone understand the problem, even if it might not be one they experience themselves. For example (continuing with our campsite finding software), you might initially write something like: “Finding a campsite is a pain.” However, you can go deeper with the problem by adding more specific pain points like: “Finding a campsite requires driving to a remote location with little internet access, deciphering different signage and boundaries, and exploring in the dark until you find a spot to set up camp which can be a barrier for many to enjoy the outdoors.” 2. Add Empathy To Your Story Going hand-in-hand with the pain points from above, add empathy to make sure that anyone reading it understands the problem. When pitching an investor, they might have a surface-level understanding of your problem but to really make sure they feel the pain your customers are feeling you need to make the true pain points are truly there. This will help investors find empathy for the end-users and paint a picture of why a solution is needed and why your solution is the one. Using our example, many investors might not know much about camping. Making sure they can understand the headache of aimlessly driving around in the dark looking for a spot is important. 3. Explain The Benefits of Your Proposed Solutions Now that you have built up the problem and given the readers an understanding of why there needs to be a solution you need to dial in the benefits of your solution and explain why you are the ones that should be solving the problem. Remembering that we want to keep the problem statement succinct, you need to be intentional with the wording of your solution. The rest of your business plan or pitch deck can be used to dive deeper into your solution and the economics/strategy/etc. behind your business. Start Your Fundraise with Visible Have your problem statement and business plan in place and ready to go out and raise capital? Let us help. You can find investors with Visible Connect (our investor database), add them to your Fundraising CRM, share your pitch deck, and track how potential investors are engaging with your fundraise. Give it a try for free for 14 days and kick off your fundraise here.

Startups are in constant competition for 2 resources — capital and talent. Without capital, a startup will fail to grow and execute plans. For startups just getting off the ground or ones that have yet to find product-market fit, securing capital via customers can be difficult. However, there are countless places (angel investors, venture capitalists, private equity, friends and family, etc.) to look for capital to help you and your startup secure the money you need to develop a product, scale revenue, hire top talent, and more. Related Resource: How to Find Venture Capital to Fund Your Startup: 5 Methods Learn more about how you can find and attract different types of private investors in our guide below: What is a Private Investor? A private investor is an individual or firm that provides financial backing for startups or businesses. There are varying levels of private investors. There are established venture capital and private equity firms that make a living privately investing in companies. On the flip side, there are wealthy individuals and angel investors, who are investing in small startups as a way to diversify their investments. Related Resource: How to Find Investors The Ins and Outs of Private Investing A private investor is a generally broad term. Private investors can come in all shapes and sizes and might be already in your network but you may not know it. Different private investors function in different ways. Related Resource: A User-Friendly Guide on Convertible Debt Types of Private Investors Learn more about the different types of private investors and what the benefits of them investing in your startup are below: Angel Investors As Investopedia puts it, “An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.” Angel investors are generally wealthy individuals looking to diversify their investment portfolios. Because of this, financial returns are not their sole motivator. Angel investors might invest at a more personal level — e.g. a company might be in a space they are interested in, the founder could be a friend, etc. There are a number of benefits of finding angel investors to invest in your startup. To start, there are likely angel investors in your immediate network that you might not be aware of. As they are generally a friend, family member, or someone in your network, the fundraising process tends to be less stringent and can move along quickly (however, because of this check sizes tend to be smaller). Related Reading: How to Effectively Find + Secure Angel Investors for Your Startup Related Reading: Types of Venture Capital Funds: Understanding VC Stages, Financing Methods, Risks, and More Venture Capitalists Venture capital is the private investor most founders tend to be most familiar with. As defined by Investopedia, “A venture capitalist (VC) is a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.” Venture capitalists are professional investors. Venture capital firms have their own investors, Limited Partners, to who they need to return outsized returns to. Because of this, what they are looking for in an investment might vary from what an angel investor is looking for in an investment. Their thesis and investing principles likely come down to their ability to flip a huge return for their LPs. Related Reading: Understanding Power Law Curves to Better Your Chances of Raising Venture Capital However, the benefits of raising from venture capitalists can be huge (if venture capital is right for your business). Because of the growth in the venture capital space, there are more investors than ever before. This has created increased competition and the need for VC firms to offer more than capital. VC firms now offer to help with hiring, strategy, product development, leadership, fundraising, and more. When leveraged correctly, venture capital can be a great tool for a startup that believes it can grow to a massive valuation. Related Reading: All Encompassing Startup Fundraising Guide Private Equity Firms According to Nasdaq private equity firms are, “Firms that use their own capital or capital raised from investors to take companies private with the aim of running them better and later taking them public or selling them at a profit.” While venture capital is a form of private equity — VC firms generally spend their time and money investing in earlier-stage companies. Private equity firms are generally geared towards later-stage companies. Because of their focus on later-stage companies and straddling the line between public and private companies, private equity firms can offer some major benefits. The largest benefit is liquidity for founders and early employees. PE firms will generally acquire companies that free up capital for any previous investors, founders, and team members. Related Reading: The Understandable Guide to Startup Funding Stages Where to Find Private Investors? Naturally, the next question is “how do I find these private investors?” Luckily over the last few years different resources and communities have surfaced to help founders find the right investors for their business. Visible Connect — Connect is our free and open-sourced database of venture capitalists. We verify the data with investors directly so it is the most up-to-date, accurate, and important data for founders. AngelList — AngelList is a great tool for finding angel investors and syndicates for your startup. Online Communities/Twitter — Different online communities (on Discord, Twitter, etc.) exist and are full of eager angel investors and early-stage VCs that can be a fit for your business. Related Resource: How Startups Can Use an Investor Matching Tool to Secure Funding How to Network With Private Investors? Raising capital from private investors is a numbers game. You’ll need to talk to countless investors to find the right investor for your business. At Visible, we like to compare fundraising to a traditional B2B sales process. You are filling the top of your funnel with qualified investors, nurturing them throughout the middle of the funnel with communication, and hopefully closing them and cashing a check at the bottom of the funnel. Just like a sales process, there are different methods for networking and filling the top of your funnel: Warm Introductions — Oftentimes the best place to start is with your immediate network. By combing through LinkedIn and your personal network look for anyone that can make an introduction to one of your dream private investors. Cold Outreach/Email — When you can’t find a warm introduction, don’t be afraid to send off a cold email. Related Resource: 3 Tips for Cold Emailing Potential Investors + Outreach Email Template Events — The startup world is a typically tight-knit community. VCs, angels, and PE firms spend time at events to find deal flow. Attend events and speak with as many qualified investors as possible. Twitter/Social Media — Private investors, especially VCs, spend time building their personal brand on Twitter. Interact with their Tweets and build a relationship using the tools already available to you. By approaching your fundraise like a sales process you’ll be able to uncover the best methods for networking and building relationship with investors. Check out our Fundraising CRM and tools to track and manage your next raise. Related Resource: 7 of the Best Online Communities for Investors Related Resource: 6 Helpful Networking Tips for Connecting With Investors Related Resource: A Complete Guide on Founders Agreements Key Concepts Private Investors Look For in Startups Finding and networking with the right investors is only a small piece of the puzzle. At the end of the day, you need an investable business that excites private investors. A few of the key concepts they look for. Related resource: Dry Powder: What is it, Types of Dry Powder, Impact it has in Trading Increasing Revenue No matter how you cut it, a business needs to have increased revenue to be investable in the eyes of a private investor. If you’re revenue (and profit) and are not increasing, they likely won’t make money on their equity investment in the future. Liquidity Typically speaking, investing in startups is illiquid and can be risky for private investors. Clearly communicate this but also make sure to have a clear plan for successfully exiting at a later date. A Clear and Concise Business Plan If you can’t clearly articulate your business plan, strategy, and go to market efforts, investors will be left confused and likely not have conviction in your business. Be sure to clearly lay out your model and use any historical data to demonstrate how and why your plan is working. Controlled Spending Behavior In the eyes of an investor, they are cutting you a check and you are at liberty to spend it however you’d like. Investors need to trust that you’ll responsibly spend and budget your new capital. Demonstrate that you have a clear plan, historically have controlled your spending, and have unit economics that will scale. A Big Market As we previously mentioned, private investing generally follows a power law curve. Private investors are looking for some massive exits in their portfolio as most startups fail. Show potential investors that you are operating in a potentially big market that can create huge returns in the future. Related resource: 13 Generative AI Startups to Look out for Successful Team Startups, especially in the early days, are largely driven by their team. For companies that are pre-revenue, investors will spend time closely evaluating the founders and team members to build conviction on their ability to solve the problem and build a business. Strong Unit Economics Scalability and strong unit economics will be a huge plus in the eyes of investors. Show investors, you have strong unit economics and a model that will scale nicely as you grow. Learn more in our post, Unit Economics for Startups: Why It Matters and How To Calculate It. Your Funding Journey Starts With Visible Finding the right funding for your business is a journey. As you begin to scale your company, remember that different funding options exist and can be leveraged to best help your business. If private investors are not the right option for your business, great! If you want to kick off a fundraise and find the right angels and VCs for your business, awesome! We can help founders find the right investors, manage their conversations, share their pitch deck, and update potential investors. Find the right investors for your business with Visible Connect — Give it a try here. Related resources: Accredited Investor vs Qualified Purchaser The Top 9 Social Media Startups

Private Equity refers to an alternative investment class. This alternative class of investment is made up of capital not listed on a public exchange, meaning private equity is made up of funds directly from private investors or investment groups. In some cases, it is even the conglomerate of buyouts of public companies converting their public equity back to private capital. There are 9 main types of private equity funds out there, all with their own core purposes, structures, and strategies in place. Let’s dive in and understand the 9 types of private equity funds. Private Equity Funds: Illiquid, Predictive, and Powerful An alternative investment class is essentially an investment that isn’t a stock, bond, or cash. Also known as an investment that isn’t easily sold or converted to cash. Private equity falls into this category because although private equity represents a cash value, it is not easily converted and is not a traditional stock or a traditional representation of cash. Private equity has no public exchange value and is known to be illiquid. Private Equity is illiquid, meaning it’s not easily converted into cash. Private equity is different from traditional investments for a few reasons. Because they are not public investments or easily convertible to cash, private equity is not influenced by public markets. This means there is far less pressure on performance by investments from private equity funds as the swings of capital aren’t as dramatic, performance in the market isn’t a critical indicator of success. The overall goal of private equity investments is to provide the investors with profit, usually within 4-7 years – typically a much quicker return time than traditional investing. Today, there is $2.5 Trillion involved in private equity funds across the globe. The definitions provided so far have been high-level – overall, just an understanding that private equity is an alternative form of funding that is not public and not influenced by market conditions. More specifically, there are nine core types of private equity funds: Venture Capital, Growth Equity, Buyouts, Infrastructure, Real Estate Private Equity, Mezzanine Capital, Fund of Funds, Distressed Private Equity, and Secondaries. Let’s dive into each. 1. Venture Capital (VC) Venture Capital or VC is a type of private equity where investors specifically focus on investments that have long-term growth potential. VC funds typically operate with a managing partner and a handful of other operating partners or passive partners and are made up of pooled investments in high-growth opportunities in startups and other early-stage firms. VCs are typically only open to accredited investors. The ideal and typical businesses that are a good match for Venture Capital investments are startups. VC funding can be provided to both startups or entrepreneurs directly and is seen at all stages of a startup, scaleup, or growth company's evolution. A couple of well-known companies that have successfully leveraged VC funding are AirBnB and Slack. Both took on VC funds as part of various investment rounds over the course of their company life cycles and now are both public companies. Slack was also acquired by Salesforce after going public. Airbnb has raised 6B in funding over 33 investment rounds while Slack took on $200M in VC investments. There are a handful of reasons why you might want to consider a VC investment or not. The Pros of Venture Capital: Access to Large Amounts to Money: Venture Capital Firms typically are made up of very wealthy, well-connected ex-startup folks who know the business and have the access and influence to raise a lot of money. A major pro of taking on a VC investment is the access to capital you will have. Leadership and Networking Experiences: In addition to access of great amounts of capital, VCs typically offer great networking and opportunities to work with great leaders and advisors. From the VC firm’s partner experience, any operating assistance they may provide, or the network of other industry experts the partners have access to, there are typically plenty of opportunities for learning and networking with your investing VC that will lend a hand to your business. No Recurring Risk or Schedules: VCs are expecting a long-term return, not a monthly return. There is not a monthly or recurring fee that’s needed to pay back your VC, the expected gains they see are repaid by the success of your business. This open-ended return plan is helpful for a founding team to not have to consider any cost to taking on VC funds. Future Opportunities: Taking on a Venture Capital fund as an investor opens up the door for future large round investments from that same VC or other influential VCs. Additionally, VCs often provide assistance with public relations, hiring, risk management and more. The Cons of Venture Capital: Lower Ownership Stake: In return for the large sums of money without a recurring repayment schedule, VCs ask for long term opportunities to double or triple their returns. This means they are going to be wanting to take on a significant ownership stake in your startup when investing their money. This can be a con because it can easily turn into a dilution of your company and loss to the founding team as more and more VC money is taken on, becoming the price of scaling quickly – less ownership stake overall. Extensive Upfront Process: Often, the process of pitching to and securing VC capital is an arduous one. Founders may need to spend all of their time fundraising and prepping for investor presentations and conversations, losing the ability to engage with other areas of the businss. A distracted founder raising money, may lose sight of the real growth and details of their business. VC funding is rare relative to other types of funding and the time spent to secure it can be costly, especially since at the end of the process there is typically almost no negotiation leverage for the startup at all. High Pressure Stakes: At the end of the day, if your company is not growing to the aggressive expectations set out by the VC’s valuation, the company may come crashing down quickly. Funds are typically released on a performance schedule and low performers can lose their business (because they don’t have majority ownership anymore or don’t meet the board of investors expectations). If your company fails to grow, or doesn’t meet expectations, things can go south extremely quickly with VC funds accelerating to the end – if that pressure isn’t something your business or founding team is ready for, VC funding may not be the appropriate route. Related Resources: Venture Capitalist vs. Angel Investor Checking Out Venture Capital Funding Alternatives 24 Top VC Investors Actively Funding SaaS Startups What Is a Limited Partnership and How Does It Work? 2. Growth Equity Growth Equity is a form of Private Equity fund that is typically seen with late stage companies showing high growth potential. Growth Equity firms are looking to invest in companies with established Go-to-market business models and repeatable customer acquisition strategies already in place. Because of the already proven growth and success of late stage companies, growth equity is a lower risk investment to take on and to put forward, and a great choice if a business is looking to subsidize expansion of operations, make acquisitions, expand verticals of their TAM or enter new markets across the globe. Typically, a growth equity deal is a minority investment for the equity firm and is purely to capitalize on quicker capital gains vs. any long term benefit or ownership opportunity. Spotify and Uber are two major companies that have taken on growth equity later in the business and used it to scale new features and expand into new markets. As Uber became global and needed more money to front new markets, growth equity from companies like TPG growth was critical to their success. The Pros of Growth Equity: Maintain Control: Typically, growth equity funds make non-majority stake investments. Meaning they infuse cash to already established companies, taking on little ownership relative to the early stage investors. This type of investment fund takes on less risk and has a shorter runway on return, so for a founder, growth equity can be super helpful to grow the company without having to give up any remaining shares of ownership. Quick Growth Opportunity: Cash is king, so in a scenario where your business is doing well, you just want to move faster to achieve growth goals, an infusion of growth equity can be just what is needed. Growth equity capital allows for big moves and can be the game changer needed to hit aggressive valuations and pipeline KPIs. The Cons of Growth Equity: Value Added: The main Con of growth equity is that there really is no value added besides cash to the business. Growth equity funds aren’t invested in the same way a VC would be – the path to success is much clearer for their investment companies and they aren’t majority owners so the value to the investor to provide leadership, networking, or advisory value is not as evident or needed. This can be a con to take on money for growth and not have the accompanying support or guidance. 3. Buyouts A buyout, often synonymous with an acquisition, is when a controlling interest in a company is purchased. Buyouts consist of the majority stakeholder being acquired or bought, and then the now new majority owner buying out or purchasing back the remaining, minority stocks in the company. Buyouts can be completed by private equity firms or by other companies themselves. Typically, the ideal candidate for a buyout is a company that has some type of operational value or product value but is not hitting growth goals as quickly as expected or is not on a path to a profitable exit. A company may choose to buyout or acquire another company if they see the value of that company’s product, team, intellectual property, or customer base as a value-add to their existing company – making the combined power of both companies more valuable in the long run. One company that benefited from a buyout was Engagio, the software company. They were bought out by Demandbase, a leader in account-based-marketing software. This benefited Demandbase by unlocking new use cases for their customers with sales intelligence and insights, and benefited Engagio by pairing their customer base and trajectory with an even faster growing SaaS company. The combined product made the Demandbase platform that much more attractive to buyers. The Pros of a Buyout: Accelerated Growth Opportunities: A buyout could take your existing investment or company to the next level by bringing in missing product, leadership, or market opportunities. Stronger Outcomes: For the company being bought out, it could bring about continued growth and value opportunities for the employees and stakeholders, depending on the terms of the buyout. In a best case scenario, a company where stocks were losing value, is given a new life with stock converting to the new company value and continuing to accelerate. The Cons of a Buyout: Growing Pains: Acquiring a company doesn’t happen overnight. There are pains and challenges associated with acquisitions or buyouts and not all companies can overcome them. Overcoming growing pains around integrating product, teams, and customer bases is critical to see any positive outcome to a buyout, and is not always possible. No Guarantees: A Buyout doesn’t come with any guarantees. It requires the acquiring company to do well which is not promised. A buyout is also potentially at a loss for certain investors depending on how desperate a buyout was, making it a very un-guaranteed way to exit a business. There are two types of Buyouts, Managed and Leveraged. Managed Buyouts Managed Buyouts are most commonly seen with large corporations looking to sell off parts of their business, maybe sub-businesses, departments/divisions to another buyer in order to save the core business or make a profit off a poorly or average performing division. Another example of a managed buyout would be if a small, private business owner wishes to retire they may choose to sell their business to a conglomerate for a buyout. A managed buyout typically occurs with financing made up of debt and equity and is typically pretty substantial. Leverage Buyouts Leveraged Buyouts are buyouts that only require 10% capital and can take out debt to finance the rest of the buyout. This strategy of a buyout is extremely risky but if it pays off, it results in major returns with little cash down. A leveraged buyout is operating under the assumption that the buyout will be extremely profitable and a good business decision vs. needed to save the business. 4. Infrastructure Infrastructure Private Equity is the practice of privately investing in the equity of physical infrastructure needed to support society. A few of the types of infrastructure that infracture PE is used to invest in include: Utilities such as gas, electricity, water Transportation such as airports, roads, bridges, railways Social infrastructure including schools and hospitals Energy sources like power plants and pipelines Renewable energy like solar power plants and wind farms The Pros of Infrastructure Private Equity: There is always a need: Infrastructure investments are consistent and everlasting. There won’t be a change so suddenly in the market where all of a sudden a road or hospital isn’t needed. Consistent returns: Due to their consistent need, and typically low fluctuation in value, infrastructure investments produce steady, reliable, high cash returns. The Cons of Infrastructure Private Equity: The Impact of Social Factors: Macro factors like recessions, inflation, population changes etc.. have a direct impact on infrastructure investments. Planning for these changes and flexes is different from investing in a more high risk high reward type of investment. Expensive to Fix: Even though there is a consistent, unwavering need for infrastructure investments, in the case that there ever is an issue (a bridge collapses, the sewage system gets contaminated etc..) fixes can often be costly and slow down returns for a long period of time. 5. Real Estate Private Equity (REPE) A pretty straightforward type of private equity, real estate private equity invests in real estate projects and properties. A pretty risky investment, real estate private equity typically requires a significant amount of capital up front but 8-10% returns are often a common result. The types of businesses that are a good match for REPE are high-net-worth individuals with pensions, endowment funds, or LPs to invest because they come with a significant amount of capital up front. The Pros of REPE: High Reward: With returns up to 10% being typical (and in rare cases, even higher ones), the reward of REPE is tremendous. The Cons of REPE: High Risk: Despite the high returns, the amount of cash typically needed upfront is incredibly risky. 6. Mezzanine Capital Mezzanine Capital is a mix of debt and private equity financing. If a company is seeking Mezzanine Capital, they are essentially taking a loan from the investor alongside giving away some equity for part of the received capital. The investor can then decide to concert the debt owed by the seeker of the investment to equity interest in the company. The conversion typically occurs in the case of a default. Typically, later stage companies are a good fit for Mezzanine Capital. They will seek this type of PE investment if they have a short term growth project that they need cash for such as an acquisition. The risk level is moderate for the investor as the worst case scenario ends with them owning more of the company vs. just not getting their investment back at all. The Pros of Mezzanine Capital: Scheduled Payback Period: Because a portion of the investment is a loan, investors are set to make back their money on a timely payback schedule – providing a clear path to return assuming no default. Mostly Positive ROI: With the result of default equating to equity, the ROI is typically positive in either scenario for the investor with more equity resulting in more long term capital gains (potentially). The Cons of Mezzanine Capital: Moderate Risk: This type of investment is not 100% a loan so there is still a portion of your investment at risk as this is not the most low risk investment option out there. Dips in Valuation: For the portion of your investment that is for equity and any unpaid loan portion that turns to equity, you’re then banking on the valuation of that company keeping your money out of the red – any dips in valuation or future failures could make your equity worthless. 7. Fund of Funds (FOF) A FOF is exactly what it sounds like, is a private equity fund that invests in other funds, like hedge funds or mutual funds. FOF’s are also often called multi-manager investment funds. Individuals like you or I could invest in an FOF as it’s a great way for us to diversify our portfolios and start investing in a lot of assets with less capital needed. Emergence Capital is another example of an FOF, they invested in our investor, High Alpha. The Pros of FOFs: Minimal Risk: Due to the broad diversification that an FOF sets out to achieve, the risk on FOF funds is typically minimal with lots of different types of investments to balance out during various market conditions and outcomes. Broad Opportunities: Investors with minal capital to invest may lean into investing in a FOF so that they can diversify their assets without needing more capital. The Cons of FOFs: Higher expense ratios: Compared to other mutual funds and traditional funds out there, FOFs typically have a higher expense ratio – something to consider. Overlap fees and additional investor fees across the different investment funds are a potential concern. 8. Distressed Private Equity This type of PE comes into play when a company is in trouble. A Distressed Private Equity investment is one where an investment firm will invest in failing or in-troubled companies debt or equity to have a controlling state, make changes,sell assets, do what needs to be done to turn that company around, turn a profit and even in some cases take that company public. Bain Capital is well known for its distressed strategy, raising funds specifically aimed at this purpose. They’ve bought companies but also investments like properties that were failing – Just this spring, Bain purchased a 160+ room hotel in Ibiza that was failing and aims to turn it around. The Pros of Distressed PE: ROI Potential: The biggest pro of a Distressed strategy for investors is the idea that they could turn a major profit with very little if almost nothing down to take control (depending on how poorly off the investment is). The ROI can be huge with a distressed strategy but the right operators need to be in place. The Cons of Distressed PE: ROI Potential: If the right strategy isn’t implemented or the problems run too deep, even a super low cost distressed investment can yield little to no ROI and even lead to a loss. Operator knowledge and a strategic plan is critical to the success of a distressed investment. Time to value: A distressed investment return could be only a few years, however, the time invested by an operating team could cut into the ROI as well as make the time feel much more intense to get the desired value vs. the more passive nature of a lot of PE investments. 9. Secondaries Secondaries are the buying and selling of investments already owned. A Secondary PE fund or even individual traders are buying stocks or assets they see as valuable, holding them, and selling them when they know they can turn a profit. Many individual investors seek out Secondary PE experts to help manage their trades and advise on best practices. A financial institution writing a mortgage for a customer is a great example of a secondary. That financial institution can then go and sell that mortgage security to a company like Fannie Mae on the secondary market to hedge their bets and turn a profit. The Pros of Secondaries: Maximize your investments: Spending a minimal amount up front, or even spending a lot up front with the right knowledge guarantees you will maximize your investments if you buy and sell your secondaries with the right strategy. The Cons of Secondaries: Selling at the wrong time: Buy low, sell high is the goal but timing is everything and a misstep on selling too soon or holding too long can have major consequences for a secondary PE firm. How Crowdfunding Differs from Other Types of Private Equity One type of funding that does not make the traditional list of Private Equity is crowdfunding. This type of funding for a business is different in a few ways. For the most part, the key difference is that the folks or “investors” putting money into a project dont’ typically have any stake in the success of the ubisness and the ROI on their investment is very different. Instead of gaining ownership or guaranteed money back from said “investment”, crowdfunding is typically more so done to prove interest from a market – fund my product if you think this would be useful, support my business, donate to a cause – and the return comes in the form of something like early access, a discount on said final product, or a tax write-off for a crowdfunded charitable initiative. Because there is no ownership or partnership or lender / borrower agreement established with crowdfunding, it’s not considered traditional PE. There are many popular websites that exist for crowdfunding such as GoFundMe.com Tap Into Private Equity Funds and Keep Investors Updated with Visible Get involved with the network of PE investors and funds in the Visible Community and update existing investors on your progress today by creating your free Visible account. Find investors that are right for your business with our free database, Visible Connect.

Fundraising is difficult. On top of building a strong business, founders need to build their investor funnel from start to finish. They need to find the right investors, build relationships, and successfully pitch their company with hopes of a check. In order to better help founders tackle finding investors for their business, we’ve built a totally free, community-sourced investor database, Visible Connect. While the world has certainly become virtual over the last few years, there are still benefits in keeping tabs on the local tech and startup scene. For founders located in the Dallas area and Texas, we’ve put together a list of the 20 venture capital funds you need to know: Blossom Street Ventures About: From the team at Blossom Street, “We’re don’t believe in high burn, go big or go broke models. We don’t push founders to take more money than they need. We look for founders who are cash efficient, scrappy, and pragmatic. We focus on companies with $2mm to $30mm of run-rate revenue, with year over year growth of 20% to 50%+ depending on revenue. We’ll invest anywhere in the US, Canada, UK, Australia, and broader Europe. We prefer to lead, but also follow. Our check is $1mm to $3mm.” Location: Dallas, TX Check Size: $1M – $3M Stage: Early, Series A Thesis: “No thesis. We want to see it all! Especially SaaS, eCommerce, marketplaces” To learn more, view their Visible Connect Profile > Interlock Partners About: From the team at Interlock, “We invest in companies positioned to take advantage of emerging technologies to transform a market. We look for high confidence teams that meet strategic and financial goals with the best practices in scaling tech and organization, planning, execution, and controls. We will leverage our extensive network to increase opportunities for partnership, resources, talent, product/market expansion, and successful outcomes..” Location: Dallas, TX Stage: Early Recent Fund Size: $50M To learn more, view their Visible Connect Profile > Hexa Global Ventures About: From the team at Hexa, “HEXA Global Ventures brings capital, resources, experience and talent – partnering with visionary entrepreneurs to help shape the best ideas into great companies.” Location: Dallas, TX Check Size: $50K – $2M Thesis: “We invest in early-stage companies solving big problems with exceptional teams. We believe that where you come from is just as important as where you’re headed and that nothing is more authentic than growth that comes from overcoming long odds. We focus on BtoB SaaS companies.” To learn more, view their Visible Connect Profile > 7-Ventures About: From the team at 7-Ventures, “7-Ventures, LLC, is the 7-Eleven® corporate venturing arm focused on discovering, partnering and investing in startups that complement 7‑Eleven’s mission of convenience. We are looking for equity and business relationships that help reinvent retail, and we are willing to use our stores to test and learn.” Location: Dallas, TX Stage: Seed to Series B Focus: Food & Beverage Startups To learn more, view their Visible Connect Profile > RevTech Ventures About: From the team at RevTech, “RevTech Ventures is a venture capital fund with a focus of early-stage investments at the intersection of retail and technology. We make dozens of small, initial investments, with larger follow-on investments in those companies that demonstrate rapid growth and sustainable advantage. We provide year-round content and support led by our management team and our large pool of world-class mentors.” Location: Dallas, TX Stage: Pre-Seed and Seed Check Size: $100k – $4M To learn more, view their Visible Connect Profile > Goldcrest Capital About: From the team at Goldcrest, “Goldcrest is a venture capital fund that invests in private technology companies.” Location: Dallas, TX Stage: Seed to Series B Check Size: $1M to $10M To learn more, view their Visible Connect Profile > Tech Wildcatters About: From the team at Tech Wildcatters, “Founded in 2009, Tech Wildcatters is a Seed to Series A venture capital fund focusing on technology and tech-enabled companies. We are backed by an international group of investors and deal-flow collaborations. As one of the world’s first accelerator funds, we’ve backed over 150 companies and were nationally recognized by MIT and Forbes.” Location: Dallas, TX Stage: Seed to Series A To learn more, view their Visible Connect Profile > Dallas Angel Network About: From the team at Dallas Angel Network, “The Dallas Angel Network links angel investors in Dallas with great entrepreneurs in Dallas, Houston, and Austin.” If you’re in need of early-stage private equity or venture capital, check out Dallas Angel Network Location: Dallas, TX Stage: All To learn more, view their Visible Connect Profile > Mobility Ventures About: From the team at Mobility Ventures, “We are a selective hands-on firm focusing on emerging companies across the Wireless Ecosystem: Mobile Internet, AI Data Sciences, Digital Media, Mobile Health, e-Commerce, Software, Location-based Services, Applications and Services. We invest in category-defining companies. We are value-added investors helping to build enduring, significant institutions, working with entrepreneurs to transform ideas into successful companies.” Location: Addison, TX Thesis: “We invest in what we know. We invest where we can add value. We seek to work with teams who are best-in-class and enjoyable to work with.” To learn more, view their Visible Connect Profile > Perot Jain About: From the team at Perot Jain, “Perot Jain is an early-stage venture capital firm committed to partnering with bold and innovative entrepreneurs to build highly disruptive, industry-transforming companies.” Location: Dallas, TX Stage: Seed to Series B Thesis: “Our mission is to provide timely capital and resources while delivering the highest quality strategic advice to assist our portfolio companies in achieving their maximum potential.” To learn more, view their Visible Connect Profile > Kick-Off Your Round with Our Fundraising Tools Finding the right investors is only half the battle. Once you have your ideal list of investors, you need a system to manage your conversations, share your pitch deck, and keep your investors in the loop along the way. Use Visible to find investors, share your pitch deck, and track the progress of your raise. Give Visible a free try for 14 days here.

Storytelling is an integral aspect of a successful VC fundraise. A pitch deck is a visual tool that founders can leverage to tell their stories. However, as a founder, it can feel like you’re getting pulled in a hundred different directions, and finding the time to build the pitch deck might feel impossible (or design just might not be your strong suit). Thankfully, there are countless resources, tools, and options to help you get your pitch deck designed and shared with potential investors. Pitch Deck Design Options There are countless options when it comes to finding the right person or resource to help with your pitch deck design. Depending on what your needs and budget are there are plenty of options — ranging from free to tailored services that will help build your dream pitch deck. As we mentioned in our post, Pitch Deck Designs That Will Win Your Investors Over, some investors are not looking for an overly designed pitch deck so be sure you understand what your needs are before determining your pitch deck design option. A few popular options that we’ll touch on: Use a template Hire a freelancer Use specialized deck design service We’ll touch on pricing, popular services, and more below: How Much Does a Pitch Deck Design Cost? Having someone else help you create your pitch deck might sound great but you are probably thinking, “how much is this going to cost?” Of all of the expenses associated with running a startup, pitch deck design might find its priority towards the bottom of your list. However, there are countless free and inexpensive options but more expensive and involved options if you are in a financial position to spend more on your pitch deck. Depending on how much you weigh the importance of a well-designed pitch deck might also help determine how much you’d like to spend. Use a Template A natural place to start when determining how to design your pitch deck is with a template. This is generally the cheapest option but will put more of the work on your shoulders as a founder. If you’re comfortable with design tools and have a good idea of what content you’d like to include, this could be a great option. As more companies go through successful fundraises, the options and tips here continue to evolve and improve. Free Templates The best place to start is with a free template. There are countless different libraries and options to browse through. Even if you don’t find the perfect template that is free, you will be able to find inspiration for a design that you can take to a freelancer or use to build your own template. Related Resource: Tips for Creating an Investor Pitch Deck (with Free Template) Paid Templates If you’re not finding the perfect template for your startup, you might want to take a look through different paid templates. There are options that are more involved and can help you take a free template to the next level. Beautiful.ai is a tool that uses its design expertise to help anyone look like a design pro. With their paid services you’ll have the ability to pull on hundreds of individually designed slides. Their pricing starts at $12 a month and goes up to $46 a month depending on your design needs. Related Resource: 18 Pitch Deck Examples for Any Startup Have a Pro Review Your Deck If you think you have your deck ready to go, it might be helpful to have someone review it to make sure it is up-to-par. Depending on your immediate network, there might be free or somewhat inexpensive options here. On one hand, if you have existing investors or a founder friend who has raised capital before, have them check things out to make sure it looks good to go. On the other hand, there are paid options that will review a deck for you. Base Templates has a service for $149 where they offer expert design feedback to make sure you can confidently kick off your raise. Hire a Freelancer If you’ve browsed through different templates and have decided you want to create a more custom pitch deck, it might make sense to find a freelancer to help. There are varying options when it comes to freelancers. Mid Tier Pricing Thanks to tools like Fiverr and Upwork you can browse through a marketplace of different freelancers and find the perfect person for your budget and needs. There are hundreds of options less than $300 on Fiverr. You can find a well-reviewed freelancer for anywhere between $50 and $200 on Fiverr. For example, this freelancer (with all 5 star reviews) starts at $60 but is upwards of $260 for a 15 slide pitch deck. Between Fiverr and Upwork there are hundreds of other options that fall in that price range as well. Premium Pricing Of course, if you’re willing to spend more and would like to find a more tailored fit for your business there are options as well. Using Upwork, we were able to find some more premium options that take a more tailored approach and work on an hourly rate so you know exactly what you’re getting. The hourly rate for top-ranked designers ranges anywhere from $100-$200 an hour. For this freelancer, they charge $175 an hour and look to take about 3 or 4 hours for a project. These options can still keep you below/around $1,000 but will give you a more custom approach and hands-on experience. Use a Specialized Design Service Taking things one step further and you can find a specialized design service. Across the board, these will be a more “premium” service and a higher price point. The price here can vary quite a bit but is more difficult to find information on until you start a conversation with a specific service or firm. For example, we found an agency on Upwork that charges $3,500. They complete the project from start to finish and help with any specific content you’ll need throughout the process. Another example is the 4th & King agency. While we don’t have information on their pricing they come highly recommended and have helped some of the most successful startups and venture capitalists build their pitch decks. Another option is finding an individual designer in your network that might be taking on more work. This will really allow you to take a more custom approach and have a more hands-on approach during the entire process. We have seen companies use individuals that will help build branded deck templates that they can use for investor pitches but also other use cases (sales & marketing pitches, product pitches, webinars, etc.) Easily Share Your Pitch Deck with Visible Decks All in all, there are countless design options available for you and your startup. Depending on your design skills, budget, and need for a polished pitch deck should determine what option is best for you. A good starting place is any free template to get the inspiration flowing. To learn more about building your template check out our post, Tips for Creating an Investor Pitch Deck (with Free Template). Building and designing your pitch deck is only half the battle. Once you have your deck ready to go it is time to hit the ground running and start pitching/sharing your deck with potential investors. We offer a dead-simple way to share your pitch deck. Decks are completely integrated with our fundraising CRM and leading investor updates platform. You’ll be able to set customized sharing permissions, notifications when investors view your deck, upload new versions without clicking a button, and understand how potential investors have engaged with your content. Learn more here or give Visible a free try for 14 days here.

At its core, a successful fundraise comes down to storytelling. Founders need to tell a narrative to investors that piques their interest and ultimately leads to a check down the road. As Kristian Andersen of High Alpha puts it, “I always encourage founders to start with a story and think about it very fundamentally. Think about it very fundamentally. What is the plot? You have a protagonist, you have an antagonist, you have a climax. That storytelling structure can and should be applied to a pitch.” Outside of a verbal pitch, there are countless tools you can use to help tell your story. One of the most popular (and important) tools is a pitch deck. A pitch deck can be a powerful visual tool to help fuel your storytelling and increase your odds of a successful raise. In this guide, we’ll dive into what makes for a well-designed pitch deck. We cover everything from visualizing data to choosing fonts and layouts. What Makes a Good Pitch Deck Design A pitch deck is a tool that is used to visualize and assist with your story as you “pitch” a group. For this instance, we’ll be talking about pitch decks and how they apply to a venture fundraise. A pitch deck is a small but important part of a successful pitch and fundraise. Some investors won’t necessarily require a pitch deck, they are widely accepted (and expected). Some investors, like Gale Wilkinson of Vitalize, are fine with an investment memo, Notion document, or a pitch deck. If you do decide that building a pitch deck is right for your business, there are a few points to consider: Do you need a pitch deck? Why should someone care about your pitch? How long do you want it to be? How much context should you give investors before sharing it with them? How should you balance design vs. content? To learn more about building a pitch deck, check out this post from the team at High Alpha. At the end of the day, pitching your company (and building a pitch deck) is an opportunity to talk about your company and your vision — fundraising is incredibly difficult and time-consuming but it can and should be exciting! Lindsay Tjepkema, CEO of Casted, summed it perfectly when she said: “There’s nothing better than being able to talk to person after person about your company. That’s a great feeling and it’s exhilarating and it’s exciting to be able to share your passion with someone else. That’s also the hardest part because it’s your baby. And when you share something with so many people and you get so many nos, that’s hard.” Bottling up that passion for your company and vision can be a great backbone when going into creating your pitch deck. You are putting your company on display and want to make sure it is something you are personally confident and proud of. Related Reading: 18 Pitch Deck Examples for Any Startup Pitch Deck Designing Best Practices Different investors will tell you different things when it comes to pitch deck design. Some will say it needs to be polished and perfect. Others will say too well-designed is a signal a founder is spending too much time on it (and not enough on the business). What you present and share with investors is ultimately up to you but there are a few key focus areas if you’re not sure where to get started with your design: Keep it Simple Keeping your pitch deck simple is incredibly important. Investors are likely looking through hundreds or thousands of decks in a given year so keeping it simple and digestible is important. A few tips to keep things simple: Has a natural flow Legible fonts Simple branding Easy-to-understand data visualizations and images Media files are digestible Be Awesome at Storytelling As we mentioned at the beginning of this post, a pitch deck is ultimately a tool to help you tell your story. You can quite literally think through your pitch deck as you would a story. What is the plot? Who is your audience? Who is the antagonist? Who is the protagonist? Use Data in Form of Charts and Graphs As we mentioned earlier, oftentimes simple is better. Charts, graphs, and data visualizations are your friend. They can be leveraged to easily and creatively display key data about your business. However, data without context can be dangerous. Investors are potentially looking through your data without you so make sure it is incredibly clear and can be understood if you’re not in the room with them. Whenever Possible Use Icons or images Different icons and images can be useful when trying to convey different messages and points throughout your pitch deck as well. Instead of writing a story of how a customer is leveraging your product, consider using images of them and telling the story yourself. If you do decide to include images make sure they are high quality. This is true for company headshots and any supporting images throughout your pitch. Make Your Objective Crystal Clear If you’re keeping your pitch deck simple you should only be including things that are necessary to your story and pitch. Each slide should be well thought out and have an obvious point or call to action that you are trying to get across. No matter what the content is on a given slide (image, written, video, etc.) the point and intent should be obvious. Consider Using Different Types of Layouts You can keep your pitch deck simple but engaging at the same time. Different layouts are a great way to put emphasis on different points and sections of your story and pitch. For example, if you want to highlight a big problem or metric that is exciting, you can use a big splash like the example below: Or if you want to demonstrate how you’ll be putting capital to use, you can use a timeline like the example below: Use a Chart to Display Milestones While a story is a driving force behind a pitch, investors will want to dig into different data points and metrics from your success thus far. Be sure to include charts that show traction or growth. These can be great areas to excite and motivate your investors to move through the fundraise quickly. Consider a Professional Pitch Deck Designer Of course, being a founder is incredibly busy. You are building your business, hiring, closing customers, and more so designing your pitch deck might sit on the backburner. In order to help you build a great pitch deck, there are countless agencies and tools out there to help you. Freelancers are a great option or the team at 4th & King has helped founders raise $5B+ with their help. Related Resource: Our Startup Pitch Deck Template Pitch Deck Designs Brought to you by Visible Fundraising and pitching your company is incredibly difficult. No matter where you land on the importance of a well-designed pitch deck, just remember it is an opportunity for you to talk about your company and passion to hundreds of investors. If you’d like to learn more about building your pitch deck, check out our in-depth guide, “Tips for Creating an Investor Pitch Deck.” Visible is here to help with your next fundraise. Find investors, share your pitch deck, and track your raise all from one place. Try it for free for 14 days here.

With an average round size of $58M, a company’s Series B Round is a serious endeavor. Early funding rounds such as pre-seed, seed, or even Series A, are all about showcasing the potential for your business and generating monetary buy-in to make that potential a reality. With a Series B, the stakes are much higher. A Series B Round is about building on proven momentum and securing further confidence that your business continues to be a strong, fast-growing, and profitable investment for the VCs and private investors participating. Instead of proving to investors why they should help launch or fuel the early potential of your business, a perfect series B round pitch deck is all about demonstrating to investors that your company is a rocketship and this is their ticket to the moon. Examples of Series B Funding Rounds Making it to a point in your business where it makes sense to raise a Series B round. With less than 5% of SaaS startups making it past the first year, raising any money at all is a risk and an opportunity most companies don’t even get. With the high growth that is possible with significant Series B funding, it’s important to understand what a Series B round even looks like. We’ve outlined 5 different Series B rounds to explore: Iterable – $23M In December 2016, Iterable announced their 23M Series B round. Iterable is a cross-channel platform that powers unified customer experiences and empowers marketers to create, optimize and measure every interaction throughout the customer journey. The company has gone on to continue it’s massive growth raising over $300M to date. . Their 2016 Series B was led by Index Ventures, with participation from CRV and previous angel investors. Per a note from their CEO, the round’s purpose was presented for product-specific innovations alongside marketing, sales, and engineering team growth. Lattice – $15M After launching in 2015 and participating in Y-Combinator in 2016, the performance management platform scaled quickly, raising a $15M Series B in 2019. Although on the smaller side of Series B, the investment was led by Shasta Ventures with participation from Thrive and Khosla Ventures as well. At the time of their series B, Lattice had surpassed the 1,000 customer mark – providing incredible credibility and excitement for the investors participating in this round. Beekeeper – $45M  Beekeeper, the mobile platform for frontline communication, raised a significant Series B to kick off 2021. The Swiss-based company with offices in Poland, Germany, and the US raised this round with a large number of investors participating. The round was co-led by Thayer Ventures and Swisscanto Invest, with participation from other investors including Atomico, Alpana Ventures, Edenred Capital Partners, Fyrfly, Hammer Team, High Sage Ventures, investiere, Keen Venture Partners, Samsung NEXT, Swiss Post, and Swisscom. Beekeeper’s largest target market is the hospitality industry and after the large hit that industry took in 2020, the demand for technology to improve employee retention and effectiveness is more in-demand than ever making the value of Beekeeper higher than ever and a strong catalyst for this funding round. Evernote – $10M Throwing it back to 2009 when the financial market was uneasy, Evernote was able to prove enough value in a risky market to raise a $10M Series B. The suite of software for organizing notes and information across multiple platforms has universal appeal with a product-led growth strategy in place. This round was led by Morgenthaler Ventures, with participation from prior investors including DOCOMO Capital and Troika Dialog. Despite their ability to raise funding even in a questionable financial period, Evernote is a cautionary tale of more money, more problems. Despite the resources, they struggled with product decisions, leadership, and execution and have since been surpassed and fallen behind in their space. Calendly – $350M To close out the examples, we have to highlight one of the largest Series B rounds in recent memory. Calendly, the modern scheduling platform, raised a staggering $350M at the start of 2021 from OpenView Ventures and Iconiq. Prior to this incredibly large round, Calendly had only raised $550,000 but had 10M monthly users and 70M in subscription revenue last year. Poised as an especially valuable piece of software for the new wave of remote work as the norm, Calendly had the right validation and timing to close out this impressive round. Related Resource: Best Practices for Creating a Top-Notch Investment Presentation How to Get Investors Excited About Your Series B Pitch As a founder, its critical to bring a specific set of qualities and elements to the boardroom for your Series B pitch. The stakes are higher and confidence and preparedness are more critical than ever before. We suggest implementing a few tactics and pre-work steps to ensure the investors you’re pitching get excited by your series b pitch. Analyze and Prepare The quickest way you’ll lose credibility with an investing team is by coming unprepared to speak to the numbers. The SaaS metrics of your business should be your guiding light. Know them front to back, run through all the possible questions that each metric could spur. From average deal size to burn rate to ARR, make sure you have it down pat and expect the toughest questions about the data to come your way. If you thoroughly analyze and prepare to present the data completely with clear, data-driven rationale for every business decision and outcome fueling your Series B ask, you will prove major credibility to your potential investors and give them the confidence that their money is going to a team with the business savvy to handle and spend every dollar efficiently. Lead with Confidence You’ve got the SaaS metrics of your business down and could recite them in your sleep. However, if your delivery and presence during the pitch fall flat, it might not matter. Confidence is key when executing your Series B pitch. Show that not only do you know your numbers but that you know your business is in fact an extremely valuable business opportunity for these investors to participate in. Nobody wants to invest millions of dollars into a founding team that doesn’t seem to believe they can become a billion-dollar business. SaaS founders don’t become founders because it’s a quick way to make money. Rather, they validate a great idea and take big risks to realize that idea. This takes confidence to do well and that same confidence is critical to bring to the Series B pitch, a big step on the way to this big goal. Tailor to Your Audience Typically with a pre-seed, seed, or Series A round the firms you may be pitching are smaller and there might even be more of a focus on individual angel investors or friends and family. With Series B, the opportunity may be present to pitch to much larger, more established firms with prominent and successful investing experience. It’s crucial to keep this in mind and tailor your pitch to this new type of audience. Research your potential investors’ portfolios, understand their previous investments and position in your pitch, how an investment in your company is complementary to their current portfolio and investment style as well as how you add a new value and new opportunity not currently present in their portfolio today. Understand Your Competition While competitors can be tough for your sales team to navigate FUD and a pain in the side for your product team to ensure innovation and differentiation, strong competition can actually be a key sign of validation for your business to investors. However, it’s absolutely critical that you understand your competition inside and out for your Series B pitch. Competition shows that there is demand in the market (as there should be if you’re at the point of asking for Series B level money), but if you can’t properly differentiate why you win and why your take on the market is the superior one then an investor may choose to pass and seek out other investment opportunities in your space. Dig into the metrics of your competition as much as you do your own business. Spend time in your pitch highlighting the competitive landscape and outlining clearly (with confidence) the key differentiators for your biz and how you plan to lead the market. This will show investors that you are keenly aware of challenges and how to analytically approach those threats – showing good business sense. The Perfect Series B Pitch Deck (Step-by-Step Template) As with Series A, you might not have a lot of time to communicate your investor pitch or you may be one of the dozens of pitches that a particular investment team is hearing that day. This makes your pitch deck critical to nail. As a starting point, get an idea of strong pitch decks from Seed and beyond to understand the general styles and methodologies that have historically worked well for other SaaS companies. Bonus points if you study successful decks from the portfolios of investors you’re pitching to. Related Reading: 18 Pitch Deck Examples for Any Startup We recommend the following flow to ensure you capture the right information and nail your Series B Pitch. Fewer slides is better but each slide can be extended into a second slide as needed: Problem Slide Make it crystal clear what large problem exists, with specific emphasis on how big said problem is. Emphasize the metrics of the problem, how expensive is it? What is the potential financial opportunity in this problem space? If you’re asking for a big sum of money to solve said problem, it’s critical to really prove outright from the start of your pitch how critical that problem really is. Solution Slide Introduce your company as the solution to that massive problem. Keep it simple with a clear statement of what your company is and how you solve the problem. The solution equals your company and your company’s mission statement is how you aim to solve this massive problem. Metrics Slide Why are you worth a fair chance to solve the problem you’ve outlined? With seed or Series A it’s proving that the idea is strong and you have early signs of validation. With Series B, let existing success metrics validate this for you. Showcase significant growth metrics such as customer count, month over month or year over year growth, ARR, etc… Use these numbers to clearly capture and hold attention. Competitive Landscape and Advantage Further, call out that the problem your company solves is one worth solving. Highlight the market including any significant competitors, both indirect and direct, and concisely share how your approach to this problem is different and stronger. Further, validate with growth data vs. competitor growth data if possible. Related Reading: How to Model Total Addressable Market (Template Included) Product Highlights Naturally, your potential investors want to see the product but don’t think that means they have time for a full-fledged demo. Share 1-2 slides highlighting how the product works with some screenshots or a quick peek at the live platform. Make it clear how your end-user would interact with the product but don’t feature dump. Product Roadmap Talk about the possibility and future of your product. What will you do in the next 6 months, years, 5 years? Highlight how your product evolves with the problem and continue to expand its footprint in your defined space. Funding Use Plan Outline how you plan to use Series B funding. For most companies, this is a natural expansion of the product roadmap. However, if you have other growth plans such as hiring etc.. highlight that need to and what that expansion will let you do to scale and make money for your investors even faster. Team Slide Prior to closing, make sure to highlight the amazing team you work with. Highlight your executives, the existing board members, and investors. This is a good way to close with credibility and highlight the connections and team supporting what you do. Closing Slide Keep your close simple. Re-highlight your company mission and the big problem you plan to solve, thank the investors for your time, and open up for any questions if appropriate. Prepare Your Investors In Advance Just as you did with a seed round or Series A, the more you can prepare your investors (or potential investors) ahead of the time set for the actual Series B pitch meeting, the better. Plan to circulate the deck, a summary of your current terms sheet, high-level company info for new investors, and key metrics no later than 48-hours prior to your pitch. This will ensure that all investors and potential investors have a clear understanding of what your ask is and who your company is today. This pre-understanding will make your time more valuable and even allow investors to come prepared with or share questions before – making the time more valuable and pointed for all. Alongside your series B pitch deck, a simple company introduction deck can prove to be extremely valuable. How Visible Helps Startups Raise More in Series B The Series B Pitch is a major milestone for startup founders to achieve. You’ve shown your business is on the right path, have credible early success in the market, and are ready to take on more serious amounts of capital to scale. Mastering the Series B Pitch is possible by following a clear, data-driven, and confident approach, tailoring to your audience, and deeply understanding your competition as the landscape for your space takes off. The Visible pitch deck for a Series B Pitch offers a straightforward template for success with this next-level investment task. Visible is helpful for companies at all stages of growth but especially helpful for founders looking to improve and expand their investor communications. Check out a free trial of Visible – create your account and get started today.