How to effectively present the amount of money you want to raise in your pitch. Watch the full video — free, no account needed.
How to effectively present the amount of money you want to raise in your pitch deck. It emphasizes the importance of packaging and positioning your funding request to investors to make a significant difference inmpact.
Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about how to present the amount to raise in a pitch deck. Before we get started, make sure that you hit that subscribe button, and this way, you will never miss out on any of the videos that we roll out every week. Understanding how you’re positioning, packaging the money that you’re going out to market, that money that you’re going to be asking investors for during your fundraising efforts is absolutely critical. That packaging, that positioning is going to make all the difference. So in today’s video, we’re going to be breaking it down for you and give you all the step-by-step, all the insights, so that you know how to nail it. With that being said, let’s get into it. Figuring out the amount to raise is absolutely necessary because that is, in a sense, the amount that is going to give an understanding to the
investor on how you’re thinking about things, where you’re planning on deploying the capital, and so forth. Really, the different areas that you need to keep in consideration when you’re thinking about runway are the following. Reaching the next milestone The runway Hiring Comps Cushion Ultimately, when it comes to the runway, you need to know that the runway is the amount of time that you have left before your startup crashes, meaning that there’s no more money. Here, typically, is 18 to 24 months, and this is money that you need to count in without the actual revenues. So just pure cash burn that goes into some of the costs of being up and running. What you want to do is, even though people say to raise for 18 to 24 months, you don’t know how the market is going to react over the course of time. You don’t know some of the unexpected expenses that you’re going to have to face, so I
would recommend that you go for 36 months to give you a little bit more time in the event that you need to maneuver. Now, the other thing to keep in mind is the milestones. Over the next course of the 18 to 24 months or even 36 months of what we’re discussing, what are the things that you need to achieve? What is going to allow you to move from one lifecycle of your business to the next lifecycle of the business? Is that going to be a certain amount of team members? Is that going to be a certain amount of revenue or engagement on the customers that you have coming to you? You need to be in very good clearance of what that looks like, what is your vision for that, then what eventually needs to happen from having a money perspective in order to cover those costs to get you there. Once you know that, then that’s going to help you in that regard. The other area is the hiring. Obviously, you
need to take a look as to who are the essential people that are going to help you get to the next lifecycle of your business? If you are at a, let’s say, seed round, you’re probably going to have the founding team in place. When you go from a seed to a Series A, you are actually going from just having the founding team to having more of an executive leadership team that is helping you with the execution, and you’re going to have to get clear as to perhaps what will be their salaries, how you’re going to be compensating that with stock that you’re giving them in the business. But, ultimately, those are costs and costs that you need to keep in mind when you’re going out, and you’re looking to raise money. Then you need to think about the ask slide. When thinking about the ask slide, I always see entrepreneurs making the mistake of putting a very specific amount. If you’re, for example,
looking to raise $5 million, just to throw in a number, don’t go specifically with $5 million. Go with a range. You can say $3 to $5 million. That way, you can get all the people that are investing under $5 million and all the people that are investing $5 million. You can even broaden that up and say $3 to $6 million. That way, you can even get the people that are investing a little bit above $5 million. That gives you a broader range of the people that you can tap into, and this is going to be a strategy that you want to pull out when you already have a lead investor. That means someone that is coming in, pricing your round, putting the price tag, so that everyone else comes and invests. This could be an open discussion that you have with some of the investors. Again, keep it as a range, and that way, you’re not boxing yourself into one single amount. Because, remember that investors
have certain mandates with their own LPs, Limited Partners, meaning people that have invested in their funds as investors. Those are promises and perhaps mandates that they’ve said that they’re going to comply with. So if they’re only investing up to certain amounts or in certain rounds of financing, you want to make sure that you are also going in parallel with those mandates that they have with their own LPs. When it comes down to positioning the ask, the way that you want to go about this is don’t just think about the ask slide itself because you need to think about the pitch deck as a whole. Remember, it’s a flow, it’s a structure, it’s a certain story that you’re walking the investor through as they’re reviewing. It’s not just the ask slide itself. You need to think about the financials, how you’re breaking that down, what are the financial drivers, and how you’re positioning those
on the pitch deck itself. You want to think as well about, as well, the market slide, where you are talking about who has raised, other valuations, and that’s going to give an idea to the investor as to where you’re positioned. One thing the investor likes to do is ask you questions. They like to, for example, ask around valuation, the amount to raise. One thing that you could do so that you’re not negotiating against yourself, and maybe you can raise even more money at a better valuation, is to do some market comps. What that means is, take a look at your competitors, directly and indirectly, see how much they have raised, and at what valuations. When the investor comes to you, and they try to get some of that critical info from you, you can say, “Look. Basically, in the market, we have Company A, Company C, Company D, whatever that is, you show that range and you show the amounts and
the valuations that they have raised. You can say, “We could be in-between, and I think that we could do this much with this amount, this other much with this other amount, and this other much with this other amount. That way, you’re giving all the relevant information so that they see where you actually fit. Then also, what you can accomplish. Now, if they try to push you into the valuation, because, obviously, the amount that you’re asking for is going to impact that, one thing that you can do is just to say, “At the end of the day, I believe that in a valuation negotiation, there’s one party that wins and another one that loses. So with that being said, I’m more interested in a partnership where everyone wins. Given what you are seeing here, and all the different companies with all the amounts that they have raised and at different valuations, where do you think we fit, and what do
you think is fair so that we make this a super successful partnership where we both win?” Just to wrap it up, there’s a lot that goes into creating a super-powerful pitch deck. It’s not just about putting 15 to 20 slides together because every single thing that you say and that you do is going to make it or break it. Again, investors only allocate 2 minutes and 41 seconds per presentation. That’s it. So you need to make it count, and you need to make it be in a way which they can skim through it very quickly. You can actually take a look at the template that I have below that you can use for free. Founders are using it all over the world to raise millions. That way, you don’t need to start from scratch. So hit a Like on this video, and subscribe to the channel so that you don’t miss out on all the videos that we’re rolling out every week. Also, let me know on the comments how you’re
thinking about valuation, amount to raise, and so forth. And if you are raising money, shoot me a note at alejandro@pantheraadvisors.com. I would love to help out. Thank you so much for watching.