Raising a round of financing is one of the toughest things an early stage company will need to face at some point. Fundraising is actually getting harder as investors are getting pickier. Before, having access to startups was hard as it was more of a word of mouth kind of game.
Nowadays, as I describe in my book The Art of Startup Fundraising, raising capital is way more transparent and online platforms have made the entire process more open and available for investors.
I was very fortunate to come across the pitch deck that Mixpanel used in 2014 to raise one of the largest Series B rounds with $65M in funding and a whooping $865M valuation. Definitely near the unicorn status, which means reaching the $1B valuation club of startups that are gaining massive traction.
Overall the pitch deck is great but a little short. If you want to check a more robust pitch deck I would recommend that you take a look at my free pitch deck template below.
ACCESS FREE PITCH DECK TEMPLATE
ACCESS FREE PITCH DECK TEMPLATE
To provide some background, Mixpanel is an advanced analytics platform for mobile & web. It helps businesses grow by helping them understand how their users behave and use their products by tracking actions people take rather than page views.
The company was founded by Suhail Doshi and Tim Trefren in June 2009 and has its headquarters in San Francisco. The following year to founding the business, the company would go on to graduate from the prestigious accelerator program in Silicon Valley called Y Combinator where other successful startups such as Dropbox or Airbnb have also graduated.
Before this round of financing, the company had raised in Seed and Series A rounds less than $12M. It had accomplished to onboard institutional investors such as Andreessen Horowitz or Sequoia Capital. Moreover, it also had great angel investors like David Sacks, Keith Rabois, Marc Benioff, Max Levchin, or Michael Birch.
With that being said, lets go ahead and take a look at the pitch deck.
SLIDE 1 – THE COVER
In my opinion, this cover is a little bit weak. It does not include the most important part in the event people are interested in further details. That is the contact details of the CEO which should be at a minimum the email and the telephone number where people can get in touch. Such information can be placed on the bottom right hand corner of the slide which doesn’t take much real estate.
Some other things that could have been added to enhance the looks of the cover and get people excited could have been quotes from domain experts or perhaps logos of media outlets with quotes from media articles where the company has been featured.
SLIDE 2 – THE PROBLEM 1
I like the way it positions the problem. It gives the investor something to relate to as we are always making decisions without really having much data or precedents which determines what could be the best route to follow.
SLIDE 3 – THE PROBLEM 2
This slide might be a bit repetitive from the one before. I would have combined them both into one single slide. Also, I would highly recommend that you avoid using language like “bullshit“ as it might turn off some of the investors that come across your slides.
As I have covered in a previous post, Peter Thiel, cofounder of Paypal and one of the most respected investors in the Valley, created a pitch deck template that you might be able to find in the piece Silicon Valley Legend Creates Pitch Deck Template For Entrepreneurs. As you will be able to appreciate, Thiel does a phenomenal job at combining key information there.
Perhaps in this case, I would have combined slide 2 and slide 3 so that it keeps the slides clean and structured.
SLIDE 4 – THE SOLUTION
I like how the solution goes right to the point by stating how their business will provide analytics software to customers in order to make decisions that are supported by data.
However, I do not like the fact that this slide is talking about what the company intends to do in the future by adding software for sales and finance as a next step. This could lead to believe there is lack of focus and the investor might get worried as it might think the founder is all over the place.
One of the biggest risks for startups is lack of focus. The biggest resource that a founder has is time and for that reason he or she needs to allocate it wisely. This needs to be an internal exercise that if not taken seriously could send the wrong message to outsiders. When raising capital you want to show investors that you have everything buttoned up.
SLIDE 5 – THE MISSION
I was surprised to see this deck includes the mission statement so far along in the presentation. I really like to see this slide at the beginning of every pitch deck. This is a topic that I have spoken about in the past. Some examples that you could review for inspiration include:
- Uber: transportation as reliable as running water, everywhere for everyone
- AirBnB: belong anywhere
- Pinterest: help people discover things they love and inspire them to go do those things in real life
- WeWork: to create a world where people work to make a life, not just a living
- Square: making commerce easy
- Slack: we are on a mission to make your working life simpler, more pleasant, and more productive
In any case, I do find this mission statement profound, clear, and to the point. A good example that entrepreneurs that are looking to raise capital can learn from.
SLIDE 6 – THE COMPETITIVE ADVANTAGE
I think this competitive advantage is a little bit weak as well. The reason for this is because there is nothing that supports this statement. Normally the best competitive advantages are not from the product itself, but more from the distribution channels that the company has been able to put together (e.g. business development deals, partnerships, etc). Google for example was the 88th search engine to market and being one of the firsts does not mean anything.
Distribution channels are at the end of the day what is going to get you to the end user and to generate revenue. The wider they are the easier it is to crush your competitors.
Perhaps on this slide I would have included a source that bases such claim so that investors can rest assure that there is some truth behind it. Blanket statements are very dangerous. Normally there are at least 100 other people that have thought about your same idea. You are never the first to come up with something for the most part. Most of the time you are going to have direct or indirect competitors that are already serving the market way before you thought about launching your product or service.
SLIDE 7 – THE MONTHLY RECURRING REVENUE OVER TIME
This is without a doubt the most important slide on all the pitch deck. It shows the impressive growth that the company is experiencing month over month. This is the perfect example of the famous hockey stick that investors want to see on every pitch deck they review. Getting to this type of “promise land“ for startups is not easy. A growth rate from 2011 to 2012 of 405% is something that you don‘t come across often.
To give you an idea, accelerator programs like Y Combiner expect at least 15% month over month growth so this goes to show how well over this threshold Mixpanel is. Only a masterful execution gets you to show this type of graph so kudos to the team.
In any case, I would have invested a little bit more time and money on design as it looks like the CEO just took a screen shot from their backend platform and pasted such screen shot on this slide. It poorly represents the company and it is a missed out opportunity to deliver the message in a more impactful way. Great design makes a difference on pitch decks.
SLIDE 8 – THE SALES KPIs
The first thing that comes to mind when looking at this slide is the huge amount of text that I would need to review. Normally investors see on a yearly basis well over 3,000 pitch decks. As I discuss on my post Study Reveals The Pitch Deck That Will Land You Millions, investors will typically allocate no more than 3 minutes to review each pitch deck.
With this in mind, I always encourage entrepreneurs to have two sets of pitch decks. The one they will present in person with more visuals and the pitch deck with more text that they would distribute via email. The one with the visuals is important as when you are presenting in person you want attendees to focus on what you are saying and connecting with you instead of reading text.
What I find is this pitch deck could have used overall a good amount of visuals as the text makes the flow a little bit harder to follow. In any case, I do find that the information shared is important and relevant. One thing to note here is the aggressive hiring. Nowadays we are in the hyper growth vs. profitability trend where it wins every time with investors when you are focused on reaching and scaling revenue much faster than acquiring customers faster as it used to be the trend before.
SLIDE 9 – THE MARKETING
I thought this slide was a bit confusing. I could not allocate where things belonged to. For example, if you see the section related to August it is hard to determine where each amount is coming from and how that quantity is allocated.
I do like however, how the slide points the most effective marketing programs. This will give confidence to the investor and it will provide some guidance as to where it makes sense to double down in marketing once the financing round is raised so that acquiring customers can be scaled much quicker.
SLIDE 10 – THE EXPANSION PLAN
Perhaps I would have labeled this slide as “Use of Proceeds“ so that it clearly shows how the capital raised will be allocated. This slide is critical as it will help investors in determining how grounded you are with execution. This slide could be taken out from your 18 to 24 month plan that can be used internally to have team alignment when it comes down to execution.
As I described on my previous comments, the approach on this deck and show on this slide is very aggressive. It might resonate well with some investors while it might turn off others. I would encourage you to find a blend between the conservative and the aggressive side and see what works best for you and your business.
Overall I have to say that Mixpanel comes across grounded with the facts of their business. They know where they are coming from and where they want to take things with the additional capital. No surprise they were able to close so much capital.
SLIDE 11 – THE COMPETITION
Diagrams are a fantastic way to showcase your competitors. It is a good way to explain to investors where you fall within the market that you are operating in. However, in this case there is something that is clearly lacking for me. That is where Mixpanel falls. I can not see where the company is in the market or diagram and what differentiators are with the other companies that are already in the same space.
SLIDE 12 – THE FINANCING HISTORY
I love this slide. It serves not only to clearly understand how much the company has raised to date but also the investors it has raised the capital from. This gives a wonderful validation to the business as investors that are reviewing this will be attracted just because of the existing investors.
One of the most important things to understand when raising capital is social proof. Anyone reading this slide will probably call some of the investors that are mentioned to ask them about their experience with your venture. That one call alone could be the difference between receiving the capital or being rejected.
Overall I thought this pitch deck contained very important metrics of the business that could help investors in making the right decision. However, there are some important slides that I thought it should have been part of the presentation. These slides could be the market, the team, or the product. Especially the team as investors are an early stage are investing for the most part in you. If you don’t have your founding team together or you are looking for advisors I would recommend using CoFoundersLab which is one of the largest networks where entrepreneurs find their founding team as well as key advisors.