July C2V Notes From The Trenches
Welcome friends! Happy summer to all, and a special thanks to those tuning in from vacation. We have a new Tributary Fund investment to feature and some great portfolio company and C2V news (including a podcast appearance), but first… the founder advice segment that absolutely no one was asking for!
How to Build a Pitch Deck
No, middle age hasn’t atrophied our googling skills to the point where we missed the thousands of startup deck tutorials and templates littering the internet, nor do we wish to betray your trust in our commitment to keeping these Trenches free of tired, cliched, and unintentionally self-parodying venture content, but this had to be done for one simple reason:
The number of startup decks we see every week that are just, well, poorly done is still way too high; maybe as many as a third of what we see in some weeks.
Not only is this a critically important part of your pitch process, but it’s also one of the few aspects of fundraising that is entirely within your control, so avoiding unforced errors here is critical.
But fear not founders, we’re here to help.
Rather than do another full tutorial or template, we will focus on where it seems founders are still getting tripped up.
Common Missteps
1) Trying to Reinvent the Wheel
It sounds weird to tell founders not to get creative, but when it comes to what’s included in your deck and how it’s laid out, don’t get creative. Start with a widely accepted template, and don’t deviate.
We’re partial to these two, from Sequoia and DocSend (both supported by years of startup outcome data). The fact that both templates contain the same set of slides, mostly in the same order, should not be lost on you. At this stage, this is the information we all want to see and how we all want it organized. No need to overthink it.
2) Misunderstanding What the Deck is For
Your deck should not be built to convince VCs to write you a check right then and there; your goal is simply to get a follow-up conversation. Not one of us will ever invest based solely on a deck, we’re just looking to pare down our monthly pipeline from (in C2V’s case) 120 or so decks to the 10-15 with whom we’ll have follow-up calls.
This means giving us just enough to gain an understanding of each of the relevant topics (per the deck templates linked above) without getting sidetracked and trying to oversell any of it. You can dazzle us with the details once we’re on a call; for now, just focus on getting there.
3) Taking Too Long to Get to The Point
The floor of our deal room is littered with decks where, 8 or 9 slides in, we were still trying to figure out what the company does. Look again at the two templates linked above. By the 8th slide, we should have all the information we need to make the “pass or proceed” decision. The harder you make this, the easier it is for us to pass and move on to the next deal.
Here are a few specific tips to help with this part:
Company Purpose Slide
This should be a one- or two-sentence description of your product, and nothing else.
Do not waste your valuable deck space or our valuable time on meaningless startup-isms. They add nothing and risk making you sound like a self-parody.
For example (from an actual deck we recently reviewed): “We are a team with a deep passion for making a transformative impact.”
Best case, you just wasted 13 words telling us nothing that will help evaluate you or your product; worst case, we now subconsciously associate you with Adam Neumann.
Don’t say “first” or “only.” Most of the time, you’re not even the first we’ve seen that month, and who cares anyway (Google was, what, the 30th?)
Do not, under any circumstances, tell us your purpose is to “change the world.” We know, and you know, that your purpose is to build a huge business with a massive exit, making you a boatload of money. Not only is it completely fine to embrace this, we’ll let you in on a little secret here: (whispering) That’s our purpose too.
Problem Slide
This section should describe your customers’ problem, not the world’s problem (e.g., climate-tech decks don’t need to explain global warming, just skip to the particular inefficiency you’re addressing).
If you feel you must mention the macro problem, keep it to one bullet (e.g., a key stat on how much of a mess the U.S. power grid is and then get right into why your target customers are struggling to address it)
Team Slide
Don’t just drop resume highlights; explain the relevance of each person’s expertise and experience to the company you’re building.
For example, if your product uses computer vision, instead of a list of “Tech Titles” at “Startups We’ve Probably Never Heard Of,” say “[__] years of computer vision and ML development at A, B, and C companies.”
Fundraising Round Slide
Express runway in terms of traction as well as time. Unless you plan to raise your subsequent round with an “It’s been 18 months, let’s do this!” pitch, we need some additional color on where you expect this raise to get you.
Two Bonus Missteps (of the Strategic Variety)
1) Thinking You Can Defy the Odds
The average VC invests in something like 2.5% of deals. While you can maybe triple that by curating your list to avoid obvious passes for stage, geography, and strategy, if you need three VCs (in addition to angels and others) to fill out your round, that still means you need to get your deck in front of something like 40 VCs.
No matter how great your product, resume, or sales chops, it’s not worth fighting the math. Just trust us and cast a wide net.
1a) Failing to Be as Ruthless as the VCs You’re Pitching
If there’s a fundamental reason for us to say “no” to your deal, we promise we’ll find it eventually, and it’s to your benefit as much as ours for this to happen early so we can both spend our time on better potential fits. Don’t spin your wheels trying to turn an early “no” into a “yes”; spend that time reaching out to others who may give you that “yes.”
2) Reaching On Valuation
Dilution stinks. No argument here. But what stinks more is your commercial and/or product traction stalling out for six or nine months while you’re consumed with a fundraising grind that could have wrapped in two months if you’d just shaved 25-30% off your valuation ask.
As an early-stage founder, the value of your time is pretty close to infinite, so that extra four to seven months has much a better chance of killing your dream than the extra 25-30% of dilution.
We know this was a lot to take in, but if you stick to the script, aim to be succinct and transparent, and embrace the odds (instead of trying to defy them), we’re confident you’ll get there in the end.
New Investment
It’s not often we hit all three of the D’s (dirty, dull, and dangerous) in one shot, but we may have done it with our latest pre-seed Tributary Fund investment, WATS (“Waste Administration + Tracking Software”), a digital platform helping businesses efficiently manage and reduce waste.
WATS’s waste management platform provides a full, end-to-end solution for multistate commercial companies, including digitized waste management plans with cross-organizational visibility and input, vendor marketplace intelligence and management tools, automated site- and stream-level analysis of volumes, costs, and carbon impact metrics, regulatory compliance support, and intuitive action plans for waste reduction and associated cost and carbon savings.
WATS is initially targeting commercial real estate management (e.g., early customer Vornado Realty Trust) and industrial/manufacturing companies, though their ultimate TAM includes any business with 15 or more sites that manage waste at the corporate level (e.g., early adopter, In-N-Out Burger).
Led by the A+ founding team of Meredith Danberg-Ficarelli and Laura Rosenshine and their multiple decades of waste reduction expertise, we see huge commercial (as well as carbon impact) potential for WATS in the coming years.
C2V Watercooler
OMD Podcast Talks released Chris’s episode this month, full of valuable insights. Chris talks about how C2V scales a small startup team by leveraging advice from our investors. “We involve them in their investments, and this model works well.”
He also talks about the difference between being invested in 20 companies rather than one and why this is critical for investor success. “There is a venture firm for almost every interest.”
Chris shares why the C2V thesis is streamlined to only focus on dirty, dull, and dangerous. He also spills some secrets on why he didn’t target ad tech.
Check out the full episode below.
Portfolio Highlights
Epallet Secures $4.5 Million in Seed Funding to Revolutionize B2B Wholesale Marketplace
Epallet, the digital wholesale marketplace, announced today the successful closure of its $4.5 million seed funding round. This investment sets the stage for Epallet to reshape the wholesale industry and unlock new opportunities for B2B companies.
Bowery Capital led the funding round with follow-on investments from C2 Ventures, SilverCircle, I2BF Global Ventures, and Junction Venture Partners. Epallet will use this capital to expand its reach, enhance its platform, and deliver even greater value to its growing user base.
How AI may help agents build better relationships with clients
Automation has found its way into other business areas, such as CRMs, logistics, and predictive modeling, providing new automation and optimization levels.
What are the effects of this transformation? We're seeing dual outcomes that are both positive and negative: decreasing customer support costs but also decreasing customer engagement. In other words, a boost to the bottom line but with a growing number of unsatisfied customers.
Waste Expert Answers Garbage Questions From Twitter | Tech Support | WIRED
Everyone's favorite garbage nerd, Meredith Danberg-Ficarelli, is here to answer the internet's burning (well, maybe we'll ease up on the burning) questions about waste. Why don't we just throw all our garbage into a volcano? What does zero waste actually mean? Does recycling actually do anything? Meredith answers all these questions and much, much more!
Tampa Bay Wave Founder Stories: Max Echeverria | Eskuad
In this episode of the Wave Podcast, Tampa Bay Wave CEO Linda Olson talks with Max Echeverria, the CEO and founder of startup company Eskuad. He shares his entrepreneurial journey and the lessons he has learned along the way. Max started coding at the age of 10 and later pursued a master's degree in industrial engineering. He developed the idea for Eskuad while working at a tourism agency, where he struggled with collecting and reporting data from field workers.
Phalanx Named Finalist for Distinguished Service Award in Emerging Business Category 2023
Phalanx has been named a finalist in the Emerging Business category of the prestigious Distinguished Service Awards, presented by the NOVA Chamber of Commerce. This esteemed recognition honors individuals, companies, and non-profit organizations for their outstanding service to veterans in the Greater Washington business community, highlighting their dedication to community stewardship and business leadership.
YouTube Measurement Lift with Magellan AI
Magellan AI, the podcast media planning and measurement platform, today announced support for measuring the impact of traffic coming from YouTube alongside podcast and streaming audio.
“Host-read ads embedded within video, especially on YouTube, have become a much bigger part of podcast advertisers’ playbook, and publishers rightfully want to show the power of their podcasts across all media,” said Cameron Hendrix, CEO and co-founder of Magellan AI. “Analyzing audience response coming from YouTube alongside the response driven by podcasts is essential to get a complete picture.”