FILE – How Elon Musk Would Get VC. (AP Photograph/Refugio Ruiz, File)
Enterprise capital (VC) funding is extremely wanted by entrepreneurs, however solely about 100/ 100,000 ventures really achieve securing it, about 80/100 fail with it, and solely about 20/100,000 ventures really succeed after they safe it. Regardless of the shortage of VC and the excessive failure fee, many entrepreneurs search VC with VC pitches, or search assist from the business-school-and-incubator community to create “profitable” pitch decks.
Whereas most pitch decks embrace commonplace parts like product/service description, market evaluation, administration observe report, and monetary particulars, the fact is that pitch decks are a really poor predictor of enterprise potential – and complex entrepreneurs and VCs know that. Nobody can forecast your potential from a pitch deck. For example, about 10 of the world’s main VCs rejected Steve Jobs, and about 12 rejected Google.
That’s why VCs watch for Aha, i.e., actual proof (proof) of potential, not simply phrases on a web page. There are 4 kinds of Aha primarily based on the actual outcomes of billion-dollar entrepreneurs. On this article, we’ll discover 4 kinds of pitch decks primarily based on these 4 kinds of Aha that improves your possibilities of getting VC in case you nonetheless need it once you get to the actual kind of Aha – 94% of billion-dollar entrepreneurs took off with out VC.
The Earlier-Unicorn Pitch Deck: In case you are an entrepreneur who has already achieved unicorn standing with a earlier enterprise, you will discover it comparatively straightforward to draw VC to your new enterprise. Any such pitch deck showcases your observe report as a profitable entrepreneur. For example, Elon Musk’s pitch deck would possibly merely state, “Hello, I am Elon Musk, and I am contemplating beginning a brand new enterprise. I will present extra particulars later. Within the meantime, ship your checks to the next deal with.”
The Unicorn-Expertise Pitch Deck: Entrepreneurs who’ve developed a billion-dollar know-how that addresses a big market want have a robust probability of securing VC. Any such pitch deck emphasizes the confirmed efficacy of the know-how and its potential to disrupt the market. For instance, a technologist like Herb Boyer would possibly introduce his pitch deck by saying, “Hello, I am Herb Boyer, and my colleagues and I’ve efficiently pioneered the sector of genetic engineering.”
The Unicorn-Technique Pitch Deck: Entrepreneurs who’ve already launched their ventures and demonstrated their unicorn-level technique have a bonus when in search of enterprise capital. Any such pitch deck highlights the enterprise’s profitable execution and market traction. An instance might be Pierre Omidyar, the founding father of eBay, saying, “Hello, I am Pierre Omidyar. I began an internet public sale firm and had a whole bunch of hundreds of auctions final month and have the potential to develop into tens of millions.”
The Unicorn-Entrepreneur Pitch Deck: Pitch decks from unicorn-entrepreneurs who’ve efficiently launched a unicorn enterprise and are beginning to dominate their rising trade can generate important curiosity from VCs who need to spend money on a possible Unicorn-Entrepreneur on account of management expertise. These entrepreneurs have already demonstrated their potential to create a profitable enterprise, making it extra doubtless that VCs will need to make investments. For example, Mark Zuckerberg’s pitch deck would possibly embrace a assured assertion like, “Hello, I am Mark Zuckerberg. I just lately launched Fb and have already captured a considerable consumer base, beginning with Harvard and Stanford college students. Now I plan to increase to the remainder of America and the world.”
The Greatest Pitch Deck
The final word pitch deck is one which you do not want as a result of your enterprise is already rising quickly with out VC funding. Jan Koum’s expertise with WhatsApp exemplifies this strategy. Having constructed the corporate with angel capital and reaching profitability, Koum solely accepted VC funding after eight months of persistence from a VC agency. A pitch deck from him would possibly merely state, “Hello, I am Jan Koum. I constructed WhatsApp with $250,000 in angel capital and we’re already worthwhile. So, really, I do not want your funding. Please, buzz off.”
MY TAKE: Whereas pitch decks are all the fashion, it is important to offer actual proof of potential. Empty guarantees and inflated claims can solely go up to now. By studying from unicorn-entrepreneurs who’ve achieved outstanding development with out VC funding, you may acquire worthwhile insights into constructing a robust enterprise basis. Keep in mind, VCs are searching for tangible proof of success. Intention to supply actual proof that demonstrates your enterprise’s potential and your expertise, and you will improve your possibilities of securing enterprise capital funding
