From Jan Andriessen – henQ (@JanAndrssn)

I am quite sure that one of the greatest pains of all VCs is that they are spending so much time on reading ‘poor’ investor decks, essentially wasting a bunch of time that is the cost of ineffective information sharing.

The quality of an investor deck is not correlated to the sexiness of the pictures and graphs in it, or to the awesomeness of the lay-out, and it is inversely correlated to the number of slides or pages. In fact, in my view, a great investor deck has two distinct traits: 1.) It is very short and 2.) It tells the investor exactly what she wants and needs to know in as little words, graphs and numbers as possible. Nothing more. If you could explain your business to me in one handwritten A4-sized sheet of paper, then that would be fine. Being an overworked VC, I just want to know what I need to know and nothing more.

The question may arise as to why it is important for you to be able to tell me, or other VCs, what I would like to hear. Below are some of the reasons I find compelling. Some are quite obvious, other perhaps not:

  • The first reason why I think it is great to be able to efficiently tell a VC what she wants to know is because it enhances your chances of receiving funding. If you give a VC heaps of (to her) irrelevant information, the chances are big that she misses the essentials – by overlooking them or because they are simply not there. This means you might incorrectly be deemed insufficiently interesting to be invited for a first meeting to further explain your business. It is a shame for both sides of the table in case your business is in fact what VCs are looking for and you simply fail to communicate it!
  • Secondly, communicating effectively will eventually save you heaps of time. It might initially cost you a bit of effort to figure out what VCs want to know, because it is quite specific and sometimes rather technical, but once you know you hugely reduce the amount of time spent on creating investor decks. Just skip all the super cool graphs, irrelevant slides and amazing figures, and save hours of time by telling us exactly what we would like to hear and nothing more. That will make a VC’s job easier and enables you as an entrepreneur to focus more of your time on what really matters: running your company.
  • A third and perhaps underestimated benefit of communicating what a VC wants to hear, rather than what you would like to tell as an entrepreneur, is that it might enrich your view on your own business. You might discover a new angle on market size or you might develop a different view on what is the optimal sales model for your company, because VCs require you to think about this in a very rational and diligent way. In my previous blog titled “The Importance of a Good Business Case” I wrote more about this particular benefit of talking with VCs, so I won’t bother you here with more than what I just wrote.
  • The last reason I find the most compelling. The ability to write an effective deck shows part of your ability as an entrepreneur. When you start a business, one of the most important qualities you can have is to be able to convince other people to help you achieve what you want. There has never been built a one-man unicorn; you will never be able to do it all alone. You will have to convince employees to work twice as hard for half the money they will get elsewhere, and you will have to convince prospective clients to place their bets with a firm that might be the next big thing but also might be dead in two years time. To convince these people you will have to show them how helping you will help them become a better person. In other words: what’s in it for them? The same applies to a VC. Showing a VC exactly the information she wants to see to convince her that an investment in your company will improve her track record as a venture capitalist, demonstrates your ability to understand what makes the other person tick. Hence, having a deck that gives a VC exactly the information she needs indicates that you have an important trait of a great entrepreneur: the ability to effectively convince others!

To summarize: telling a VC what she wants to hear and nothing more is not just an efficient and financing enhancing activity, it also demonstrates the fact that you’re a great entrepreneur! Please start sending me and my colleagues very short and simple investment decks that tell us exactly what we need to know J If you don’t know what that is then show us that you’re a good entrepreneur and find out, one way or another (for example by contacting me)!