Pitch Deck 101: How to Build an Effective Pitch Deck

A conversation with Fannie Ko, Design Strategist at NFX

In this Q+A, we’re joined by Fannie Ko, the Design Strategist at NFX. After receiving her Masters Degree in Graphic Design from the Academy of Art University, Fannie worked as a Design Partner at 4th & King and Pitch Assist at First Round Capital. Now, she’s helping NFX’s portfolio founders build their brand imagery and design strategy from the ground up. In our conversation, we dig into what Fannie has learned about building a compelling pitch deck and how founders can use the medium to make an impressive first impression with VCs.Tell us about your background before getting to NFX. How did you find yourself in this career? I’d like to say it was all planned, but really it was a series of opportunistic decisions that led me to NFX. I’ve always been interested in how the world works. Internally–how do we as humans/people perceive the world and make decisions, and externally–how does the world function and react to human decisions. I got a sense of human psychology and social behavior in my undergrad. Then in design school, I learned about user-centric design and the practice of influencing human psychology and behavior. I started designing pitch decks in my first design job outside of school which is how I was introduced to venture capital – where everything I had learned is played out at scale. I became interested in how a founder turns an idea into reality and how the world reacts to that idea.What content is a must-have for a pitch deck? What content do founders include, but ultimately it doesn't matter to investors?The most challenging part of building a pitch is developing the content and narrative. While most investors are very smart, a founder should be the most knowledgeable about the market and business they're building. They have to tow the fine line of educating an investor about the space while ensuring their messaging isn't too high-level that the pitch is boring and not too detailed, so it's difficult to understand. The key is to understand the mindset of an investor and meet them where they are. It can be different for everyone!Like the 4th & King team, I like to think of a pitch as a story in three parts:1. Set the stage for the business: founders need to ask themselves – what is the most exciting thing about the company? Like a play, the opening scene needs to excite the audience/investor and give them a reason to lean in and stay focused. During a meeting, investors are evaluating the founder. They want to invest in a founder that is excited about what they're building. They need to believe you can maintain that level of enthusiasm for 8-10 years.2. De-risk the business as an investment: Now that the founder has the investors' attention, they need to prove why this will be a billion-dollar business. At NFX, we came up with the Ladder of Proof to help us evaluate a business before investing - what are all the things the founder has done? What events and trends have occurred in the market? What people and partnerships are involved that prove this will be a really big business? This part sometimes has financials and milestones. 3. The big vision: This is where the founder helps the investor picture a new world that the business has helped create. Leave this idea open so you can talk with investors about the vision and strategize how to get there.In general, I like to remind founders to build an extensive and robust deck and make it flexible enough so that they can adjust what they need for each investor meeting. Putting more content in the deck (or in the appendix) is always better than less - it makes you look more prepared. As much as possible, try to talk in numbers and charts. Investors can refute grandeur statements, but it's much harder to deny numbers. And charts tell an honest story. Founders should find the best chart representing the business in the brightest light and use those metrics as the KPIs they want investors to evaluate their business on. Also, remember to show how you plan to monetize your business. Funnily enough, many founders forget to show how they make money. If you're not making money yet, you'll need to be prepared to speak about how you will eventually. Finally, avoid projections that go too far out. Have historical numbers and projections extending 1-2 quarters out, 1-year max, and show clear reasons why you believe the numbers will trend that way.How long does the process take?Prior to the ongoing market downturn, the formal fundraising process took around a month, give or take a few weeks, for diligence and term sheet negotiations. Now, however, founders can expect this process to take much longer as investors become more careful with deployment.Regardless of the economic situation, the founder should already know the highlights of their business and the current state of the market before starting the fundraising process. Building the narrative from there should take 1-2 weeks. It's important to remember that there is no right way to tell a story, and people will have different opinions and advice. With that in mind, founders should have a structured way to get feedback and alignment from high-level team members and key advisors. Once the story is sound, the founder should start rehearsing the first part of the pitch. Remember, the first part of the pitch creates the lens for how the investor will look at the business, so nailing down this part is crucial.The next step is narrative refinement, rehearsal, and design in parallel and should take 1-2 weeks. On average, a founder should spend about 1-2 hours rehearsing each slide. And while rehearsing, the founder can determine whether the flow and design need to be adjusted to fit their style.Along the way, what other best practices around visual design work best?Every deck is going to look different. My top five high-level design tips for founders include: 1. Use simple messages and simple charts.2. Don't use too many colors. If a designer is not involved, keep to 1-2 complementary colors with shades of one color.3. Understand hierarchy – don't have everything the same size/weight. Visually, have one big thing, 1-2 medium things, and the rest should be small-ish.4. Don't be afraid of white/empty space. White space and hierarchy help guide the viewer's eyes throughout the slide. 5. Get fresh eyes every so often to see the first and second thing that gets noticed on the slide. If those things don't support the key messages, the slide should be redesigned.Are there decks that work better for sharing via email vs. a live pitch or zoom pitch? Do you make multiple per founder?How you present your deck will vary drastically depending on if it's being shared via email, on Zoom or IRL. Before meeting with investors, I recommend sending a teaser deck. If you're sending your deck via email, remember to use a PDF or link via BriefLink. This way, the deck can be downloaded and passed around easily. Remember not to include any information that you do not want to be shared. A recording via Loom is also an option for email but is not as easily scannable. If you're sending a recording, also include a separate pdf of the deck.If you're very early on in the process of talking to a prospective VC, a memo or 1-pager can be helpful to give them an idea of who you are and what you're building (see examples here, here).The format should be more theatrical if you're pitching on Zoom. Founder presence is more important here, so rehearsals matter. In addition to reviewing your deck, investors will evaluate the founder, so more thought needs to be put into your Zoom background and personal appearance. Write a checklist before hopping on to ensure your wifi is stable, your background and/or demo works for different screen sizes (phone, laptop, TV), your desktop is clean, and notifications are off. Similarly, in a live pitch, the speaker is the main focus. Consider what technology will be available to present your deck. Who's computer will be used? Are the files and fonts supported? Will a clicker or dongle be needed? Is the battery charged? In this case, the pitch deck plays a supportive role and can have far fewer words. In-person meetings are much more conducive for conversations, so an extensive appendix is helpful here as pitches may be more likely to go off track.In the process of storytelling, what questions bring out the best responses from founders?In my opinion, these would have to be: - What are you most excited about in your business?- What do investors need to believe in order to believe in your business?- What are the hardest parts of your business for you to convey to investors?How many total slides is the perfect number?Optimize for time instead of slides. For a 1 hour meeting, plan a pitch that’s "15-20 min and leave room for questions and conversations". For teaser decks, around 8-12 slides with more text can do the trick. For email decks - sent to investors after the pitch - you should aim for around 15-25 slides.Are pitch decks different in this market correction in terms of messaging and relevant info?Right now, VCs have more time to do more diligence, so the narrative has to be more grounded. Founders need to be more realistic about their business, and one way to do that is with data. The more data behind the messaging, the more real it feels.What else should I be asking and what else should founders know?The investor meeting is a time for you to vet the investor and find out if they’ll be the right fit for your company. Will you work well together? Do you share the same vision? How can they help you scale? Be yourself and be confident! You’ve poured so much time and energy into your startup, so be proud of the work you’ve done and excited for the future. This sentiment really comes across in investor meetings.##A big thanks to Fannie for sharing her wisdom and insights.To learn more about VSC, visit us at https://vsc.co.