This VC invests in dozens of companies each year and helps them raise their next round of funding. Here's his top advice for creating a winning pitch deck.
- Charles Hudson, the managing partner of Precursor Ventures, has a lot of experience with pitch decks, both in evaluating them and helping founders put them together for potential investors.
- Hudson's top advice for entrepreneurs putting together their investor presentations - focus on telling a compelling story.
- That story should focus on the future and be easy to understand and recall, he said.
- The founders Hudson has backed have had a good deal of success following his advice.
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Charles Hudson has a bit of advice for startup founders preparing to pitch potential investors - focus less on the facts and figures and more on telling a good story.
A longtime venture capitalist and former founder himself, Hudson knows a thing or two about successful investor presentations or pitch decks. The ones that work build a compelling narrative, he said.
"The no. 1 piece of feedback I give almost every founder on the first version of their fundraising deck is, 'all of the facts are here, they just don't tell a coherent and exciting story," Hudson, the managing partner at Precursor Ventures, told Business Insider in a recent interview.
Precursor invests in dozens of startups each year, so Hudson has the chance to review lots of pitch decks. But he also is intimately involved with helping the companies in his portfolio prepare to raise their next round of funding.
About 65% of the companies he backed in his first fund have secured their next round of funding. So, he's gotten lots of chances to see what works.
Hudson invests in very early stage companies. Many of them either don't have a product yet or, if they do, haven't yet shown that there is market demand for it. The entrepreneurs he advises, many of which are first-tme founders, are typically trying to raise their first institutional round of funding, either in a seed or a series A round.
Pitch decks have to offer compelling stories about the future
It's understandable that when those founders are constructing their slide presentations they tend to focus more on offering data points than developing a story, Hudson said. Many are thinking like engineers. They see a problem - needing to raise more funds - and figure they can solve it by showing the right combination of numbers, he said.
But he advises them to put themselves in the shoes of the investors they're pitching. Those investors are generally only going to hear presentations from good companies. But they're only going to invest in a handful at best. And they ones they pick will likely be the ones with the most interesting stories.
"You've got to have some minimum amount of facts and data," Hudson said he tells founders, "but you also have to have a really compelling narrative and story about the future."
Part of crafting that narrative is to use the elements in the presentation - the money that's been raised, the progress to date, the time the team has spent developing the product - to demonstrate how the founders have become the experts in the problem they're trying to solve, Hudson said. Often times founders may not realize - because they've been working on the problem for so long - just how interesting and unique are the insights they've gained about it, he said.
But another big part of creating a compelling story is to make it easy to understand, Hudson said. By the time investors discuss a particular presentation with their partners, they may have heard dozens of other ones.
"The thing you do has to be really easy for them to recall and explain in simple terms a week later," Hudson said he tells the founders he works with. "And i say, 'If it's not that simple, then we haven't solved it yet.'"
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