Investor Pitching as an Optimization Problem
For founders coming from technical backgrounds, making a deck often feels like a frustrating and even somewhat dishonest process. “How can they know what I mean if I don't explain the details of the algorithmic choices we made?”, “Why do I have to create bitesize zingers rather than having them spend some time to be carried away with the depth of our breathtaking vision?”. It comes down to attention span, or, shall we call it, bandwidth.
As the founder of your company, you are the world's foremost expert in every facet of it. When making a deck, you need to understand you are subject to the curse of expertise. Counterintuitively, research shows that your ability to explain what you do to a novice is worse than that of someone with less knowledge. To beat this obstacle, step #1 is to recognise you are responsible not for what you say (which makes sense to you) but for what is understood on the other end.
Put yourself in the shoes of an investor. One who is actually smart, has a strong track record in your market, and decent amounts of money to invest. In other words, the kind of investor you want looking at your company. But this highly sought-after investor is, almost by definition, very busy. They are overcome with proposals on where to invest, and what's more, those pitches are often nonsensical, impractical, exaggerated, not ambitious enough, or a combination thereof. They may be seeing 20 decks a day, and taking 3-4 meetings. This investor needs to focus their limited bandwidth on ideas that they are convinced are none of those things, and the default answer is “no”. So, depending on the context, you have anywhere from one sentence to 60 minutes to convince said investor to spend more time understanding your investment proposition. In a sense, before an investor invests their money, they have to be convinced to invest their time. And while they may have vast amounts of money to invest, their time is limited like everyone else's, so in a sense, even more valuable.
So you have this bandwidth envelope, within which your pitch must fit. Your goal is to use this opportunity to get more time, while at the same time everything you say must be consistent after they (hopefully) look deeper. The key here is to think about this as an optimisation problem. When you do, a number of things become apparent.
Every idea, image, sentence, word has a cost. If it's not earning it's keep, it needs to go. If if might lead to a non-productive conversation, it needs to go. Even if it leads to a good but not great conversation, it needs to go. You need your absolute, all-star, dream team of ideas, and anything that doesn't meet that definition doesn't need to be in there.
A key word here is "team". Every element must work together, reinforcing each other. The investor needs to leave the meeting thinking: "This is a strong team, taking a revolutionary but feasible approach to a massive market. They are poised to succeed, and my investment will help them get there, but if I don't invest, someone else will". This is the thought that needs to be in their mind when the meeting ends, but they won't just believe you if you simply come out and say it. You need to accomplish that with indirect means, namely, your deck and presentation.
A corollary to the previous piece of advice is to avoid anything that might spark a non-useful question. If your metaphor is to a company that recently had some bad news, consider using another company. If some of your team photos look weird, use other photos. Make sure every thought and discussion is directed towards your ultimate goal, and not some side-tracking conversation, even if that conversation is pleasant.
Budget your innovation tokens carefully
Every new company has to have a certain (small) number of innovations they've gotten right before anyone else in the world. In everything else, it's best not to appear "weird" or postulate additional innovations. Innovation is a risky thing to get right, and while one or two can make you a promising startup, needing five or six to go right can quickly make potential investors run away (and rightly so). If your team's core strength is in technology, go with the most boring business model you can. If your team's advantage is in user experience and customer development, use boring backend technology. This advice is both important in terms of pitching, as it avoids distractions, but also in terms of planning out your company itself.
Focus on impact
While you may not be able to go into the depths of your technological breakthroughs, you can focus on the value they bring. That's why you're doing the work anyway (right?). If you're lucky, you can explain your breakthrough as an improvement over the competition. Things like "10x faster", "3x cheaper", "5x less development needed" etc., are good things to be able to say (assuming, of course, you can defend them when asked). Even better, is to phrase things in terms of the qualitative threshold they're able to jump over. A masterpiece of this approach is Apple's branding of their "Retina" screens. While they did brag about making their pixels a lot denser than the competition, they focused their message on being the only ones under the perceptive limit of the human eye. Being somewhat better than the competition is one thing, being the only ones in the market with an important new kind of thing, is entirely another.
A crafting a concise message must entail compression, and at the extreme ends of the specrtum, the compression will necessarily be lossy -- not everything about your company will fit in the deck. Beyond culling material, you may even need to compromise on clarity. A great reduction in surface area is worth a small reduction in accuracy.
If you think this sounds dishonest, consider the billiard ball model of physics. While not strictly correct, it is still to this day used to explain particle physics to students and laypeople, and does the work remarkably well. If someone wants to dig in they will discover the limitations of the original explanation, but they will also understand why that explanation was a necessary way in. Speaking of compression, you can think of your pitch as a progressive encoding: Your one-line pitch can be a very blurry (but exciting!) picture of what you want to say, your one-paragraph pitch may be a much clearer but still considerably blurry, etc. Your deck and presentation are the next steps of that process, with due diligence perhaps exposing the next level of detail.
Milk context for all it's worth
If we're thinking in terms of optimisation, the way to avoid sending something big over the wire is to send a delta from a pre-existing artifact instead. Use things that are pre-installed in your listener's mind. This is why "We're the X of Y" type elevator pitches actually make sense. The listener can transpose the known pattern (X) to the known context (Y) and make a snap decision on whether they want to hear more. Metaphors and recent events that are somehow related to your product are also great artifacts you can use to your advantage.
Don't waste time giving your opinion
Starting a conversation with an investor, you have very little credibility. Remember, they see and hear people like you multiple times a day, and most of what they hear is bullshit. They know full well that you are motivated to say anything that will get you to the next round. Building your own credibility is also a goal of the pitch process, but going in, it's best to think you have none. When you choose how to describe things, always default to descriptions that can be verified independently. For instance, instead of saying a customer is "a big company with a massive revenue stream" say "a 500 person company with $3b in annual revenue". This bypasses the issue of what you mean by "big" or "massive" and allows the listener to make up their own mind, focusing on numbers that they could, in principle, verify for themselves. This is also why concrete endorsements by relevant experts or companies, revenue by customers, letters of intent, and other such artifacts are immensely valuable. They can help support parts of the argument that would not come across strongly enough if you didn't have any external support to show for them.
Leave some meat on the bone
You don’t have to cover every topic in the main body of your pitch. In fact, it may be a good (but risky) idea to leave some topics for the investor to inquire about. These are topics you have strong answers to, so you can convert a “is this the weak spot?” thought to “shit these guys have done their homework, this may be worth paying attention to” thought.
Many birds, one stone
Since the environment is so constrained, there is simply no time to work on one side of the problem at a time. Every slide needs to reinforce other parts of the pitch as well as its main payload. Your customer stories can also reinforce your pricing model, or your team’s quality. Your presentation as a whole also needs to reinforce how good you are at communicating. Take every opportunity to strengthen multiple parts of your story simultaneously.
Optimise the input
Given a specific state of the company, there is only so much you can do to pitch it well before you start becoming dishonest. The good news is, besides Deck-maker-in-chief, you are also in a position to influence the company itself. On every previous piece of advice on this list, consider whether the things you are having difficulty expressing really need to be as they are. As a simple example, you can formalise things so you can make stronger statements about them. Instead of saying a customer has "a strong interest" in using your product, ask them to sign an LOI or give you some money instead, and say that. Sometimes, making a deck is good impetus to actually do some things you should do anyway, like cleaning up the structure of your company, your pricing, your roadmap, your product lineup, your team composition or anything else that you would have to explain.
In general, VCs, especially Silicon Valley VCs, expect a company to be in a specific form to be "investable" and that shape correlates with previous successes they've seen. Any deviation from that model has to be explained, and that is time wasted, unless that explanation serves to reinforce other parts of your pitch therefore making you come out stronger. For every odd-looking thing you have to explain, by default you lose points. In general, a company that makes sense is easier to make a deck for than vice versa (but the causal arrow is not reversible). So make your company make sense from the get-go rather than wasting time putting lipstick on a pig.
Use your unfair time advantage
While the investor only has a few minutes of attention to spare, you have much more time on your hands. Compression algorithms are known to produce better results if they are given more time to compress things, and this applies even more to your pitch. Mart twain famously said: "I didn't have time to write a short letter, so I wrote a long one instead". You have a lot of time, make a short deck.
The good news is that a condensed value proposition is good for you and your company too. Selling your company is what you do to prospective employees, partners, and customers too. Each of them is coming from a different place, but the same principles of compression apply.
This is not (just) about investors. In fact, one of the best things about an investment round is being forced to boil down your value proposition and plan for getting there, and getting rapid rounds of feedback from motivated smart people. It's not often cited as such, but this forced clarity of thought may be one of the big success factors for companies in Silicon Valley.