Pitch Deck Reviews – Video Replays

 

This is collection of the many Pitch Deck Review sessions Newchip has held with Accelerator companies. We encourage you to spend time listening to the feedback, taking notes, and applying what you learn from these videos to improve your pitch deck. The ultimate purpose of the Newchip Pitch Deck Reviews is to help you craft a polished, cohesive, and compelling pitch deck that engages potential investors in your company/idea and gets you a Yes – not a No.

 

 

 

 

 

 

 

 

 

Investment Term Sheet Template

Term sheets will play an important your role in your fundraising, which is why you need to get comfortable with how these legal investment documents are structured and designed. In this lesson, we share with you the Gust Series Seed Term Sheet for financing early stage companies with investments from sophisticated angel investors. It was developed by Gust, the platform powering over 90% of the organized angel investment groups in the United States. The goal was to standardize on a single investment structure, eliminate confusion and significantly reduce the costs of negotiating, documenting and closing an early stage seed investment.

For those familiar with early stage angel transactions, this middle-of-the-road approach is founder-friendly and investor-rational, intended to strike a balance between the Series A Model Documents developed by the National Venture Capital Association that have traditionally been used by most American angel groups (which include a 17 page term sheet and 120 pages of supporting documentation covering many low-probability edge cases), and the one page Series Seed 2.0 Term Sheet developed in 2010 by Ted Wang of Fenwick & West as a contribution to the early stage community (which deferred most investor protections and deal specifics until future financing rounds.)

Gust Series Seed Term Sheet (Annotated)

Clearbanc (Rev Share Capital for Startups)

Clearbanc’s mission has been to help founders grow their business with non-dilutive capital. They don’t take equity in your business, which allows you to keep more for yourself and your employees while still getting the capital you need to grow. Clearbanc has invested over $150M in online brands and is focused on helping entrepreneurs to stop pitching and get back to building. Clearbanc offers startups capital with no interest, no equity, and no dilution.

To learn more, click here.

Stop Shooting Yourself in the Foot During a Raise

Early-stage investors typically invest together and, as a startup, you can expect a round of nearly unlimited follow-ons. One of the biggest mistakes that many founders make once the investment talks are underway is turn away investors simply because they aren’t investing in the whole round.

In other words, telling an investor that you won’t accept their money because the size of the check doesn’t seem substantial to your raise is a huge, unforgivable mistake that will cost you dearly. In most cases this means that the investor will pull out from the investment and also let his industry peers about the unprofessionalism they had to deal with. DO NOT MAKE THIS MISTAKE.

Photo of Person Standing On Crashed Plane

Do not turn away investors simply because they aren’t filling your whole round. You are a startup, after all, and they are the investors. Unless your company is clearly within the bounds of unicorn territory, meaning you already have millions (ideally double digit growth) and crazy traction, you have absolutely zero business telling an investor to shoo away because the size of their check is not large enough. Once again, do not make this mistake. It will affect your relationship with the investor and may even hinder the outlook of your round. Then again, word can get around very fast in the investor community.

If an investor wants to write you a check for $25,000 – or even $500,000 – and they are accredited, take it. Take the money. Why? Because you are a startup and you likely need the infusion to scale, grow, and succeed. Granted, there may at times be clear indicators that the potential investor offering the money is a bad fit for your business. In those cases, don’t take a shark deal. However, if the Ts are crossing and the Is are dotting with the potential investor, then it is in your best interest to take the check and use that momentum to drive more investors.

Women in White Turtle Neck Shirt and Red Lipstick

You have to think about raising a round of capital as a popularity show of sorts. No investor wants to invest alone at an early stage especially when the startup has little to no revenues and low traction. That kind of risk is usually enough to have them running for the door. To avoid this situation, focus on building out your round one step at a time. That may mean you take $10,000 here, $50,000 there, and $150,000 over there. It could also mean that an investor offers to cut you a check for $500,000 when you’re trying to raise a $1M round. If, and when, that happens, take the check and use it to attract more investor dollars. We’ve seen many entrepreneurs push back to investors under the argument that the check was too small. This is a big mistake, and one that you cannot make. Stop shooting yourself in the foot during a raise. Remember, just about any check is a good check, especially at the early stages of your startup.

*Important* How to Create Your Data Room

In order to position the opportunity that you and your startup represent to investors, you need to maintain accurate and updated information on your company in your investment materials and commit to keeping these resources updated moving forward in your current round, and later rounds.

This article contains details on how to develop a company one-pager to use with investors as well as a data room that will keep your most important company information organized for due diligence, it also requests a pitch deck and you can find extensive materials in the curriculum on proper pitch decks.

Please understand that these files you create (and keep up to date) will help both you and our team make effective and efficient intros with investors and much of what we are sharing is required for investments. If you have any questions regarding creating a data room or making your one-page summary, please ask it here so that others can see your questions in case they have the same ones.

IMPORTANT TO START: 

You need to make sure that you provide us with consistent, uninterrupted access to the folders with your deck and summary and data room so that we can access these materials for investors.

To this end, you are responsible for keeping these files up to date on a regular basis. The simplest way to do this is to utilize “public link access” but not indexed/searchable Google Drive folders which includes the aforementioned files, and then provide us the link to this folder. 

For fundraising and potential partner intro purposes, we encourage you to also send in updates, including newsletters, milestones, or major announcements that impact the trajectory and outlook of your company so that we can keep a pulse on your progress to [email protected].

The best format for this is to send with your company name and date of update (i.e. FY2018, 3Q19, etc.) as the subject. Remember that we don’t raise your round for you, your job is to raise capital, we connect investors in our network to you when you graduate and present at our quarterly expo.

We are an Accelerator, so our goal is to take momentum level traction and 25%-50% committed rounds to the next level with our networks. If we don’t invest in you during the program, your job is to keep engaging us and your advisor post graduation with your traction and milestones.

When traction and momentum are high, or when you just closed such and such investor is the BEST time to let us know because that’s the opportunity to accelerate momentum with additional investors and bring them all in at once- in investing nobody wants to lead but everyone follows.

To summarize, please submit to us the next two links using the Google Form below:
1. Google folder link with your pitch deck and executive one-pager, and;
2. Google folder link with access to your due diligence / data room 

Google Form Link:

https://forms.gle/ycvr7STmGjpAtKkA8 

  1. Pitch Deck + Company One-Pager for Investors – Guidelines & Suggested Format

Suggested Intro Pitch Deck Format:
https://guykawasaki.com/the-only-10-slides-you-need-in-your-pitch/
This is a simple format to remind you to keep it simple. Remember that an intro pitch deck is to generate interest for a meeting and same goes for executive summary – don’t give too much in an intro pitch.

Just make sure to keep your most up to date PDF copy of your pitch deck in the Google Folder. At the close of a major round you very likely will have an intro deck and a longer in depth deck. Lastly please ensure your pitch deck is in a PDF format as PowerPoint doesn’t render in mobile devices well and exports from powerpoint often break as well, leading to bad graphics and font trailing off the pages.

Suggested Intro One-Pager Format:

Think of your one-pager as an executive summary of your company and deck. We offer both to investors and we recommend you do to. The goal is to showcase the most essential and important information in your business- what investors want to see- traction + team ability and experience to drive results.

In fact, some investors will only take a look at your one-pager before they even decide to learn more about your company through your slide deck and data room. This is why you need to spend some time creating a one-pager that positions your company as a high potential investment that makes sense.

As you create your one-pager, keep in mind that it provides your investors with:

  • A quick reference guide to your business formatted in the investor language of traction
  • Clarity on how you think and communicate your business model and company vision

  • A visually engaging and succinct way for investors to understand what your company does

You’ll notice that your one-pager will include items that your slide deck already contains, except that this information will be condensed into bullets and bits that fit into a single piece of paper – hence the term one-pager.

The standard format for a one-pager has a box on the right with the company name, logo, URL, number of employees, key players and advisors and important investors. Along the bottom of the page a short, wide box shows at-a-glance financials: gross revenues, expenditures and net for the current year and the next 3-4 years.

The middle of the page includes short 200-400 character paragraphs on these topics:

  • One-line company pitch
  • Business summary

  • Management team

  • Customer problem

  • Product/Service

  • Target market

  • Customers

  • Sales/Marketing strategy

  • Business/Revenue model

  • Competitors

  • Competitive advantage

Here are a few 1-pager templates and web resources to give you an idea of what to model off of, as well as an example 1-pager that would get an investor excited and some software to help you build one:

Resources:
https://kopywritingkourse.com/one-pager-examples/

https://www.pinterest.com/T1mShutler/investor-one-pager/
https://xtensio.com/one-pager/

https://xtensio.com/templates/

https://www.vcforu.com/

Once you complete your one-pager, make sure you save it as a PDF. This is the best format to use for sharing with investors as they simply open the PDF (online or offline) as opposed to having to open a word processor or presentation software to view its contents. Make it easy for them to say yes to you.

Overall, your goal in the 1 pager is to convey: you have experience in the industry (Ex. Founder Name 20+ years in industry), that you have not only traction but MOMENTUM (hitting an inflection point in growth), your market size and opportunity, and most of all that you can make it happen over anyone else.

Lastly, while we don’t recommend asking for money anywhere or terms, if you do mention money or capital needed, do it in this format- “we’re looking for X to allow us to gain this % of market in X months” or “X will give us X, which will allow us to hit profitability, and double down investing in gaining X more momentum in X period of time so we can hit X revenue by year X.”

 

  1. Data Rooms Standards & Expectations for Newchip Startups 

If you’re serious about closing a round of investment from serious investors, then your company needs a due diligence data room. You don’t have to give it up front, and we recommend not to. It’s just there so you have an organized process to speed up diligence from months to a few days.

Top tier investors will always ask for access to the data room because that is where credible startups with viable investment opportunities will store access to corporate documents and materials for investors to easily “validate” your startup and check the boxes to make an investment.

Not only will a data room demonstrate to investors that you’re serious about raising capital, but it will show that you are organized, responsible, and ultimately running a real company. Moreover, once you build an investment round, you will likely have a group of investors and the last thing you want is to deal with a growing variety of individual requests for this document or that document.

You can save yourself a great deal of time, effort, and headaches by taking the time to build a data room that includes the bulk of what most investors need to know before they write you a check. Keep in mind, each fund will typically have its own due diligence list which can include more (or less) items for revision.

It’s our recommendation to give a fund “more” than they ask for in regards to a data room as it will set you apart from entrepreneurs with no diligence documents and help you close a deal faster. Build a robust data room that keeps investors interested and engaged in your startup opportunity so they trust you.

You will also need to have all of this information and documents ready, and potentially more, when your company reaches Series A territory. So it would behoove you build a solid data room now and prepare for your future investment rounds with bigger investors. Always be prepared for the unexpected.

So how do you build a data room? The simplest and most effective way to do this is by compiling and organizing this information in a centralized document sharing solution, such as Google Drive or Dropbox. There are professional systems out there, however most companies opt to keep it “affordable” and keep their non-secret items (ie, your code, patents, etc) out of these rooms.

Your data room should be organized per the categories listed below and your documents ought to be prepared in their appropriate file type in respect to their purpose (ie, financial models exist in Excel or Sheet files, Product roadmaps exist in PDF or Word Doc/Document files, company pitch decks exist in either PDF or PowerPoint/Presentation files, etc.

Just remember to label each folder clearly and organize the right documents into the appropriate folder, also remember to include the date on the filename so investors know what is most current and how recent it is.. In doing so, you will likely delight your potential investors and often it will be so complete that they will not “dig” as much compared to if they had to ask for every single document individually.

Filename format: DocumentName_M-D-Y.pdf 

Standard Data Room Checklist for Startups

Here is a Google Excel that we’ve already created that you can simply duplicate into your own Google Drive, just make sure that you create a separate folder to put it in and that every item in the folder (and the folder itself are set to public access, or you can also make an entire folder access by specific email so you can then give that folder access to an investor and every file in it will have access for them).

Will you need all of this for a Seed round? Very likely no. However in our experience during diligence for an entire round you will end up with such and such asking for this and another investor asking for a different document which will culminate eventually in all of the following.

So even just having a bare template of a 25% of the following (what you have already and what may take 1-2 days busting ass to create), will lead to better investor engagement and trust in you as an entrepreneur.

Excel Sheet Resource: https://docs.google.com/spreadsheets/d/1g75nTCc9IwiA2X_t7579dbmevtiAFZhwqdwVamnejT8/edit?usp=sharing

“Average” Data Room Contents:

1. Expanded Company Pitch Deck

Presentation diving into detail on the company’s business model, expansion, etc. We often call this the “expanded” deck in that a regular intro deck is 10 slides and the expanded deck is often 30-40.

However, these are not “designed to impress”, but focused on more bullet points and a deeper dive into the model, yearly objectives, team member bios, channel strategies, ad / brand creative, strengths/etc.

The expanded deck is also typical if you are raising $1M or more, or going after investors investing $500k or more in individual checks as these firms will expect this deep level dive.

Largely much of the expanded deck is “strategic” and business plan focused that coincides with largely being a “really long use of funds” slideshow that shows how you will use the money to grow in each department and area.

2. Company Documents

  • Amended & Restated Articles of Incorporation (all versions)
  • Voting Agreement(s)
  • Investor Rights Agreement(s)
  • First Refusal and Co-Sale Agreement(s)
  • Stock Purchase Agreement(s)
  • Capitalization Table

3. Board Materials

  • All board meeting minutes
  • Board consents and actions

4. Financial Models

  • Monthly P&L
  • A pro forma for the next year
  • Use of funds

5. Term Sheets & Previous Raise Docs

6. Market Research

  • Market studies
  • Competitive landscape
  • Regulatory environment
  • Go-to-Market strategy

7. Sales

  • Sales process
  • Sales pipeline
  • Sample sales materials (one-page slicks, etc.)
  • Important customer contracts
  • Important LOIs or other indicators of interest from potential clients
  • Customer ARR & MRR

8. Marketing

  • Branding guidelines and vision
  • Marketing strategy
  • NPS (Net Promoter Score)

9. Team/Staff

  • A list of all employees with date joined, title, and salary
  • Future critical roles and hires
  • List of contract workers and firms

10. Technology

  • Hardware (ie, pricing, vendors, factories, technology, etc.)
  • Software (ie, System Architecture Diagram, API Documentation, etc.)

11. Product

  • Product road map
  • Product Backlog export or release map
  • Screenshots of existing products
  • Wireframes of future products

12. Historical Information on Past Raises

  • Legal documents
  • Past term sheets

13. Intellectual Property

  • Granted and filed patents
  • Trademarks
  • IP strategy

LAST NOTE:

Pre-Seed companies WILL 100% very likely not have the above so don’t have a heart attack when you see what is on the diligence checklist. Focus on creating a data-room in which you can put what you HAVE, and add materials as investors ask for them or you have time to build them out.

Seed companies WILL 50% have some of the above if they’ve raised institutional capital or from professional investors. What I’ve always recommended was bring in team on weekend for deep strategy session to really outline business plan in a business plan tool for the strategic parts.

DUE DILIGENCE IS ABOUT INVESTORS TRUSTING IN YOUR TEAM’S ABILITY TO EXECUTE:

  1. Is the team capable of making it happen?

    1. Is the team experienced in this market?

    2. Do you have momentum (not just traction but is it growing at a rate of X)?

  2. Is it legally put together/no founder/cofounder/investor or legal issues?

    1. Incorporated in delaware, clean cap table, no issues, etc.

  3. Is there a market opportunity here or is it 1 of a 1000 doing same thing?

    1. Do you know the competitor landscape?

    2. KPI’s, cost of acquisition, customer lifetime value?

    3. Do you understand the market size?

  4. Does strategic roadmap exist or make sense

    1. Do you have an actual plan or are you winging it?

    2. Does your roadmap make sense / is it possible?

    3. Do you have a hiring plan/deeper use of funds plan

      • Other than 20% engineering, 30% marketing, 30% salaries, etc

Your goal is to not send “tons of stuff” but to convey in your pitch, materials, and data-room that you can execute on the plan you present, and that you will provide a future EXIT and return on the investors investment in an X multiple of what they give you – that is the whole point of investing.

ScaleFactor (Accounting Automation)

As an entrepreneur you should be focused on growing your business, not categorizing transactions or reconciling bank accounts!   

ScaleFactor automates complex bookkeeping tasks and translates financial information into usable business insights, enabling entrepreneurs to focus on what they love: running and growing their business. 

Save today with this exclusive offer to Newchip Accelerator Companies 

Exclusive Offer for Newchip Companies
Regular Price Getting Started Growing
$4,800/year $4,000/year $7,000/year
$800 Savings $1,400 Savings
Bookkeeping (Up to 2 connected financial accounts) Check Box Check Box Check Box
Investment includes your Xero or QucikBooks Online License Check Box Check Box Check Box
Cash or Accrual Modified Cash Modified Cash Modified Cash & Accrual
Bill Pay (up to 10 bills) Check Box Check Box Check Box
Quarterly Reporting Quarterly Reporting Quarterly Reporting Monthly Reporting
Cash Vision X Check Box Check Box
Payroll Management (For up to 10 ee’s) X X Check Box
State Sales Tax Filing (1 state) X X Check Box

 

**Includes additional product (Cash Vision) and ~17% discount from regular pricing. 

 

ScaleFactor will take all the back office work off of your plate

Daily Bookkeeping

Automatic daily transaction classification and expense tracking keeps your books clean, accurate, and reliable so you that you’re always in control of your business.

Bill Pay and Invoicing

Manage your money with one bank-grade secure login. Get paid faster, make outgoing payments on time, and seamlessly manage your cash flow.

Business Tax Prep and Filings

Expert CPAs prepare, review, and file your tax returns to keep you compliant and help you get the best refund. Plus, you’ll get automatic deadline reminders.

Cash Forecasting

Keep a clear view of your cash position, predict your cash flow up to 6 months out, and forecast for potential business decisions, such as hiring a new employee.

Microsoft for Startups (Business Tech Enablement)

Newchip is in partnership with Microsoft for Startups that qualify. Below are further details on the type of benefits and resources Microsoft can offer participating Newchip companies. 

Technical enablement

Microsoft technology to help your bottom line:

  • Up to $120k of free Azure cloud for two years
  • Visual Studio Enterprise cloud subscription
  • Office 365 Business Premium
  • Dynamics 365 for Customer Engagement and Talent
  • Enterprise grade Azure support

Access to engineers:

  • NDA roadmap briefings
  • 1:1 consultations
  • Architectural Design Sessions
  • 1:few coding events

Business enablement

Tools and resources to accelerate your Go-To-Market:

  • Customized 6-month Go-To-Market plan
  • Dedicated marketplace onboarding support desk
  • Marketplace listing optimization
  • Blog, evidence, event promotion
  • Joint marketing and demand generation campaign
  • Industry-focused campaigns and joint engagement
  • Access to additional premium Go-To-Market services

Sales enablement

A guided joint sales experience that includes:

  • A dedicated success manager
  • Bi-directional lead sharing with our sales teams
  • Targeted account planning
  • Facilitated introductions to reseller and services partners
  • International market expansion assistance
  • A worldwide network of Microsoft sellers paid to sell your solution into their enterprise accounts

To learn more about Microsoft for Startups, click here

To apply directly for the Program, click here

Amazon Web Services (AWS) – Pre-Seed Accelerator

Amazon Web Services provides startups with low cost, easy to use infrastructure needed to scale and grow any size business. AWS Activate is a program with resources designed to help startups get started on AWS. Join some of the fastest-growing startups in the world and build your business using AWS.

Instructions:

Visit the AWS Activate webpage https://aws.amazon.com/activate/portfolio-signup to apply.

  1. Use this Organization ID (case-sensitive) on your application form: 0aLSz (Note: This is not a promotional code that can be used in your Billing Console)
  2. Provide your AWS Account ID on the application. Promotional Credits will be added directly to this account, so please double check it – we cannot transfer credits in the future.
  3. Please provide your startup company name and email address associated with your AWS Account ID.

*Please note that this link and Org ID should not be shared.

To see your credit balance, applicable services, and expiration date, please go to your Billing and Cost Management Console
 
As a Newchip Pre-Seed Accelerator company, you will be eligible for:
  • $5,000 in AWS Promotional Credit valid for 2 years
  • 1 year of AWS Business Support (up to $5,000).
  • 80 credits for self-paced labs

 

AWS Promotional Credits expiration dates are based on your program start date or the date you received investment, regardless of when you actually submit the application, so please apply promptly. Companies may not be eligible for AWS Promotional Credits if they previously received a similar or greater amount of credit. Companies may be eligible to be “topped up” to a higher credit amount if they previously received a lower credit. For more information, please review the AWS Activate Terms & Conditions.

If you have additional questions please contact us.

Essential Reading for Entrepreneurs & Startups

Essential Reading for Startups

The following collection includes some of the most prized and timeless readings on the topic of startups and business. Although none of these books are required for your participation in the Newchip program, we encourage you to get in the habit of working through this list of books over the coming months and years. The knowledge, tools, and insight imparted by each of these books will add a wealth of value to your personal development and growth as an entrepreneur rising leader. 

To order any of the books in this collection, simply click on the front-cover. A new page will open with a direct link to a purchase site. 

General Startup Knowledge  

Marketing

Product

Sales/Business Development

Biography/Business History

Investor Expectations AFTER the Raise

Investor Expectations AFTER the Raise

After you have raised the funds and closed out the round, you need to understand what are the expectations of investors going forward. You cannot go into a silent mode. You cannot keep investors off in the distance, unaware of what is going on with the company. As we have stated over and over, this is a relationship between you and your investors. Communication is important every step of the way.

The following are five basic things that we recommend you do after the raise. They may seem simple, but it will take discipline for you to execute on them consistently. You should even schedule these actions on your calendar.

  1. Talk to your investors regularly.
  2. Proactively provide standardized, monthly updates and quarterly updates to your investors. (Ask your investors if they even want a weekly update, if it will make a difference)
  3. Update your investors about large milestones, as they happen.
  4. Keep your investors up to speed on all your metrics and KPIs.
  5. Limit your information-sharing to what makes sense (except when it comes to board members who are investors, as the board should have full transparency). You should work with your leadership team to determine what will be shared with investors on a regular basis.

Remember that after you close your fundraising round the real work begins. Now you have to deliver on your vision and keep your investors update on your progress. Proactivity is key here as it demonstrates a clear interest in the investor’s stake in your business. Never lose sight of the people who helped pave the way for your idea and vision to become a reality. Investors will likely play a major role in your long term success, so don’t leave them in the dark. By getting the fundamentals right, it makes everything else easier for you and them.

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