Why Pitching and Pitch Decks Suck:
Seeking funding for your SaaS Business by creating a pitch deck and pitching it at an event where you are one of a range of founders with a 6 minute window to make an impression is a fast way to lose confidence and momentum in your capital raise.
When I say this to Founders, I get the wide-eyed response that says “what other option is there?” There are plenty of options. Start by saying “No thanks” to pitch events.
The biggest job you have in engaging an investor is for them to understand properly the category that you are competing in.
SaaS is almost synonymous with inventions that create new categories. Salesforce that created the Cloud CRM category also created the terminology of “Software-as-a-Service”. They defined an industry and created their monster category inside that industry.
Let’s say an investor is going to put money into a trucking company, they need to understand about the category of Trucking and Transportation, so they have confidence in what they are investing in.
Most SaaS Founders I have met in the last three years I’ve worked in-depth with SaaS Founders, don’t understand their category enough and are not focussed on explaining their category so that investors can then have some context for the SaaS Business. They are too focussed on explaining their “product-market fit” and the plethora of “must-haves” in a standard pitch deck.
Most investors don’t ask about the category and their mind gets bombarded by the details of your pitch and without realising it, somewhere along the way, they became lost and disoriented. A confused investor does not invest.
Most disconnects between a SaaS Founder seeking capital and the SaaS investment community are because the Founder gets to the end of their presentation and the Investor still is not clear about the Category the SaaS Founder is competing in. They have no hooks to hook the details on.
What happens in a 6 minute pitch is that any discussion about Category to set the scene and orient the investment discussion is most times non-existent and at best it is “crunched” into seconds. Barely enough time for the investors to take another sip of wine before getting bombarded with a tsunami of facts and anecdotes. 6 or 7 of these presentations in a row is enough for any investor to feel overwhelmed.
The cognitive load for investors is seriously high and this compounded by the fact that there are several Founders each “pitching for their life” and kind of seeming desperate by the end of the evening.
The entire dynamic is akin to being in the colosseum of ancient Rome.
Come question time, there are the smart investors asking dumb questions and the dumb investors asking smart questions. Each Founder is in the Spotlight, either being slayed or doing the slaying by their exemplary answers.
A lot of pitch events are organised by groups that coordinate the investment into the companies with due diligence and valuation responsibilities conducted by its members. The dynamic in the room at a pitch event has a significant impact on how those conversations are going to go.
In the colosseum setting, the group you are presenting to holds all of the cards. They are emperors and the wealthy Romans. You and the other SaaS Founders have a limited time in the spotlight that will make-or-break your future. How you answer the question from Tom, the retired lawyer, might make the difference between $3m and $4m valuation that they give you (should you be so lucky to receive a term sheet). Tom always asks the same question and he recently got a pretty sharp valuation for the group’s last investment, so your response will have them chatting quietly over wine and crostini afterwards.
What you find out afterwards is that the ones who are keen to talk, didn’t actually get the right end of the stick and understand what you do at all. The ones who are quiet who you seek out, once they ask a few insightful questions get quite excited because they hadn’t taken in your presentation (for whatever reason).
In short - you showed up - you put everything into it. The outcome was all over the place and you’re left unsure, possibly hyped up with some great feedback and possibly deflated because another Founder seemed to suck all of the capital oxygen out of the room.
You are better than this.
This process is not helpful for you.
The level of detail that you have to go into in order to create a financial instrument to sell in exchange for Capital in your SaaS Business is monumental. A pitch deck for a 6 minute pitch event is a lightweight representation of your opportunity and your value.
The in-depth investor conversations you need to have are best done in more like 60 minutes than 6 minutes. These are sessions that you drive, not ones where you are “on the spot”.
You’re not Quentin Tarantino or Peter Jackson getting commissioned from a Hollywood studio for a new movie. Forget about this notion of “pitching”.
You are potentially creating a new category of business. Very often we have invented a radically different way to solve a problem. But that problem gives rise to an entirely new field that is being pioneered and will not only be worth billions in future, it will attract competitors.
So understand that it is not the room full of investors at a pitch event who hold all the cards. You do. Learn to play your cards.
Start by just saying no to pitch events. You can raise more at your desired valuation without walking out into the middle of the colosseum.
About SaaS Elevator:
SaaS Elevator helps SaaS Founders reach $200m ARR through specialist training & events. Our training is focussed on Strategy, Capital & Revenue. Selected graduates have access to our network of venture builders (Moonshot Studio Ventures) and capital partners to help them on their journey.
