The lack of predictability is one thing that makes fundraising hard.

Specifically, if you’re a founder, “What are you going to get when you get into that room?”

Founders try to game theory this as much as they can and end up making endless tweaks to their decks before investor meetings to try to match their deck with the investor’s knowledge.

But this “Two Decks for Two Types of Investors” approach makes the founders’ process predictable in the variable world of venture capital.

The Cost of the Wrong Deck

On a warm Summer day in New York City in 2018, I was CEO of my FinTech startup and was going to have a meeting with two Managing Directors of a VC fund that was the perfect investor profile.

In my FinTech startup, we built a product that helped bond traders give decision support.

The meeting was four weeks in the making.

One of my FinTech advisors had activated an amazing introduction to an VC in the capital markets space. Coincidentally, my co-founder and I were going to be in New York City those same few days that these MDs were.

I shared this investor opportunity with our champion within the Fortune 500 company that we were working with. Kindly, he suggested, “Why don’t you have the investor presentation here at our New York City offices? We’ve got a beautiful conference room that shows well and when we meet, I could share the value that I see in your company.”

“That sounded amazing!” I said. So the stage was set.

When I was working on my pitch deck ahead of time, I was researching the experience of the Managing Directors that I was going to meet. One of the MDs had been in bond trading previously. As I was thinking about my deck, I realized that this person had worked in the exact space that our startup was in, bond trading. And yet, I thought that our solution had a novel way of looking at the market and so I opt’ed to go for pitch and presentation that was more high level at the front, and then going into how our approach was different.

The day of the pitch came. I was super scripted and rehearsed. I arrived at the company headquarters, greeted our corporate champion, and he excitedly led me upstairs to the conference room. The room held a gorgeous long table extending 20 seats on both side. The room was beautiful. A perfect setting for a perfect meeting.

When the two MDs arrive, we greet each other and they sit on either side of the table at the seats closest to where I was pitching.

I gave a high level overview on myself and my co-founder and then jump into the pitch. Just as I had prepared, I started with the high level overview of the market.

When I’m still giving high level on the market, before I got into our novel approach, something happened.

The Managing Director interrupted me.

Managing Director: “You know, you can go ahead and skip this part. I used to be a bond trader so I understand all this.”

Me: “Oh, uh, yes. Well I was just giving this explanation to show how we re-design the typical workflow…”

Managing Director: “OK, …uh… sure,” and with his hand, he gestures me to continue yet the hand language is also quick and snappy, as if to communicate, “I’m writing you off.”

The wind had been knocked out of me. He asking me to skip this part was like a dagger in my balloon of confidence. I wanted to crawl away.

Right now, I can picture myself giving that pitch again, standing where I was standing, and looking out on the long conference room table. I can recall all of the details the way he looked when he sat back in his chair, his face when he said the deadly line, and the exact slide of my presentation that caused him to interrupt me.

And I wouldn’t be lying to say that the mental picture causes emotional pain.

But, I learned an unexpected lesson that day. There is one thing that, if changed, would have made the experience completely different.

The pitch deck that I led with.

But it really wasn’t even the pitch deck. It was the mismatch of the audience that my pitch deck was intended for.

A Pitch Deck Assumes an Investor Audience

✅ This is the key to understand - a pitch deck assumes an investor audience. ✅

Knowing that I was pitching to a former bond trader/investor, I should have led with a different deck that is much more technical out of the gate, rather than a more high level, generalist deck.

I did not have investor deck/investor audience parity.

But my miscalculation that day also gets a fundamental question that plagues founders. Founders ask themselves before every new investor meeting,

“In my pitch, what level of knowledge should I communicate to this investor? Should I use one deck? Should I use multiple decks? When should I be technical? When should I be more high level? How do I know the difference?”

As a founder, I solved this problem by spending time trying to assume the investor’s knowledge and then spending even more time tweaking my pitch deck to meet it. In aggregate, I spend countless hours doing this very thing over and over again. Maybe you can relate.

But, I have an insight around this.

As an investor, Tundra Angels has seen many hundreds of startups and pitches. Over the years, I’ve gauged my own response but also observed other investor responses to different pitches, the questions they ask relative to their experience.

I have a simple approach that solves all of this. It’s this:

✅ Two types of decks for two types of investors. ✅

Two Types of Decks for Two Types of Investors

Since pitching is about knowing your audience, then there are two types of investor audiences and each one needs a different deck.

There are two types of investor audiences:

A generalist investor is an individual that has not lived the problem that you are solving. 

A SME (subject matter expert) investor is an individual that has literally lived, in a previous professional role, the problem that your startup is trying to solve.

Thus, a founder should have one deck for a generalist investor, and one deck for a SME investor.

I want to be very nuanced here in my definition of “generalist.” In startups and venture capital today, the word “generalist investor” is used to describe an investor that invests in any industry.

I am using that word with a different context and definition. I am introducing something different, something novel that is probably a new way of looking at this.

In this context, when I say SME or generalist “Investor,” I am not referring to the investment firm. I am getting specific to the individual from the investment firm who will be in the room.

Because in an investor pitch, the only investor audience that matters is the specific individual(s) that will be in that room for that pitch.

Here is why.

✅ The fundamental insight is this - a person who has lived the problem that you solve asks vastly different questions than a person who has not. ✅ 

The market problems are three dimensional. There are hosts of details about the market problem that would be unknown to a person who has not lived the problem before.

✅ So an investor pitch should be all about optimizing for the depth of investor questions that will be asked. ✅ 

That’s where the two types of decks come in.

The generalist deck is for investors who have not lived the problem in a previous professional role. It is high level. It often includes a good relevant story that helps the generalist investor connect to the problem that you are solving and the significance of your solution. It does a lot more showing that it does telling in order to captivate this type of investor audience. The idea here is how communicate to someone in laymen’s terms what you are doing. No technical jargon. Skimming the surface of the company.

The SME deck is technical, for those who have lived the problem in a previous professional role. Often times, a story isn’t necessary because this is someone who has already lived the story of the problem. It walks through the technicalities of the problem and the solution, and addresses the rest of the pitch a level of 301 or 401 level depth that is only relevant to someone who has lived the problem.

The key is ✅ Having the right deck for the right individual(s) in the room, based on whether or not they have lived the problem that you solve. ✅

Often Adjacent Experience is Still Generalist

I’ve seen that even people who even have adjacent experience to the problem you solve are still generalists.

A year prior to my dejecting pitch in New York City, on two separate occasions, I had pitched derivatives traders. In those pitches, I used a very similar high level pitch deck to the one that I used in that conference room in New York City.

I compared what happened in my pitch to the former bond trader in New York City with the pitches to those two derivatives traders.

For these two former derivatives traders, the generalist deck was totally effective. Why? Because there is a host of contextual details about the workflow, software they use, etc. that are different from trading derivatives versus trading bonds. The SME deck would have confused them.

In fact, if you would have taken that exact same scene from the conference room in New York City and substituted in the chair an investor who wasn’t a bond trader, then that New York City pitch would have been totally appropriate and effective.

The SME investor, who has lived the problem, has a deep relevance to the long tail of details and will follow that line of questioning.

But the generalist investor, who has not lived the problem, will ask about the problem but will not have enough relevance and context ask about things on the long tail of use case specific details.

95% of Investors are Generalist Investors

I’ll make this even more simple.

✅ In the way that I am defining it, the vast majority of investors are generalist investors.

To get super tactical, this means that over 90% of the time, you will lead a generalist deck. ✅

Now, I know founders are asking something like, “Well, I’m in FinTech, and we are pitching a bunch of FinTech investors - corporate venture capital arms, FinTech VC funds. They surely will know what I am doing. Don’t I use my SME deck for those?”

The question is simple - who is the individual that you will speaking to? 

If the individual on the investment firm you are speaking to has lived the problem you are solving, then use your SME deck.

If they have not lived the problem, then use your generalist deck.

Then you might say, “Yes, but these FinTech investors see and invest in FinTech plays all the time. Of course they will know what I’m doing.”

This is fundamental to understand:

✅ Investing in the problem and previously living the problem are two completely different things. ✅ 

This approach takes a stand that market problems are use case specific. If a person hasn’t lived in the use case, then they ask totally different questions than someone who has.

Broad categories such as FinTech, Supply Chain, Healthcare, have countless sub-industries underneath those umbrella industries. Then, underneath those sub-industries there are problems and use cases.

So on a given VC team of say of six people, spanning a thesis of say five industries, the likelihood of one of the team members living the problem that your startup solves is microscopic. Hence, the need for the generalist deck.

Furthermore, if you look at how VC investment teams are stacked, typically there are individuals having a certain industry expertise assigned to those same industries. And yet, if that person has not literally lived the problem that you solve in a previous professional role, they are still a generalist investor and a generalist deck should be used.

What If I Assume Incorrectly?

The other reason why I like this simplified approach is that if you discover you misplayed the audience, then you can toggle over to the other deck.

✅ Have the second deck pulled up and ready in a different browser tab, ready to pull out if needed. ✅

In that situation, you can say, “Oh, got it. I have a more subject matter expert-focused deck too. Let me toggle over right now….” and go into that deck.

In that instance, the investor won’t write you off. They will actually think to themself, “Well played.” They will impressed with the preparation and it actually creates a favorable impression on that founder and his or her ability to fundraise.

The challenge that I had in my pitch in New York City was that I didn’t have a back up deck that was more relevant to the audience. I didn’t have an SME deck that I could pivot to in that moment. So, instead the investor was on a train that he clearly wanted to get off, but couldn’t.

Importantly, I would lead with the generalist deck almost every time, unless you are absolutely sure that the person is a SME investor.

The beauty of only having two decks is that it simplifies the backup plan.

You don’t have to scroll through your list of tweaked decks over the months, looking for that one that shows that one thing. You just click on the other browser tab and dive in.

How This Works In the Wild

Founders will typically find that the type of deck you use in fundraising happens in stages. You might first speak with a VC associate and employ the generalist deck. Then, on the next meeting, you might then speak with the Partner of the firm and still use the generalist deck. Then, in due diligence, the VC fund might bring in someone who has lived the problem you solve to vet it out. That would be the appropriate time to employ the SME deck.

I will say, as an investor, I do not remember a single time when a pitch and deck came off as too “basic.” This means that a generalist deck is a way more generalist than you think.

Closing Thoughts

After the investor meeting, on that warm Summer day in New York City, I left completely dejected. I just blew it with some of the top VCs strategic to the capital markets space.

Yes, the reality is that fundraising is often discouraging. But, I was a living example of the lack of predictability of investors. Specifically, I didn’t have a plan for what I was going to get when I got in that room.

That’s why I like this “Two Decks for Two Types of Investors” approach. It’s intended to do two main things:

1. Simplify the investor audience into two categories, generalist and SME, by focusing on the individual(s) that will be in the room and asking this key question - have they lived the problem that my startup solves?

2. Simplify the deck you use into two types of decks, generalist and SME.

   1. A high level and emotionally relevant deck for the generalist investor who have not lived the problem you solve.

   2. A technical and robust details deck for the SME investor that has lived the problem that you solve.

In doing this, it’s intended to put founders in predictable control of an otherwise highly variable investor meeting cadence. It aims to simplify the fundraising motion of the founder by stop doing constant deck tweaking that doesn’t get any gas mileage.

Ultimately, it increases a founder’s confidence. With a strong deck to lead with and trusted backup deck ready to go in another browser tab, it should ease the fears of not knowing what you are going to get when you get in that room.

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