Have a start-up looking for funding? Know you are going to be the next big thing? You have just under four minutes to use your “pitch deck” – your deck of presentation slides laying out your proposition – to convince the venture capitalists (VCs) that your company is worth their time.

To be precise, you have three minutes and 44 seconds.

That's the conclusion from a new study by Harvard Business School professor Tom Eisenmann and DocSend, a company that provides for the secure online transfer of documents.

The study looked at 200 start-ups that successfully raised more than $360 million, from a range of top VCs.

Of course, the pitch deck isn’t everything. The study found that for companies looking to close their seed round of funding – the first significant round – the process took on average, 12 weeks and 40 meetings with potential investors. So investors aren’t going to make a complete decision on a pitch deck.

But I know, from talking to a lot of VCs and investors (and, full disclosure, I also live with one), that the pitch deck is a critical conversation opener. And that a lot of them are awful.

They suffer from the same problem you see over and over in any talk or presentation. People try to squeeze too much that is peripheral and irrelevant on to too many slides. People don’t think about the design of the slides either, which look sloppy and cluttered.

And people don’t give the information in a compelling order, setting up and answering questions.

The deck should lay everything out, and provide needed, but not overwhelming, detail, concisely: bang bang bang.

Makey-uppey numbers

And don’t fluff the financials. You absolutely will not fool a seasoned investor with makey-uppey numbers. Probably the worst mistake: don’t base your predictions on a total addressable market for a product. Because not everyone in that market is going to use your product or service.

Not even if you are Apple. Yes, billions of people need to know what time it is during the day, but not all of them are going to buy an Apple Watch.

The study has much practical detail useful to anyone with a start-up. Want to know how many slides you should aim for, and the order in which the VCs like to view them?

Done. The study found that successful start-ups had on average, 19 slides in a seed deck (the study suggests keeping decks to 20 slides or fewer). Successful companies also had 10 critical slides in the deck that pretty much followed the order recommended by Silicon Valley giant Sequoia Capital.

In order, Sequoia advises to start with a company purpose slide, then follow up with the problem, the solution, the “why now” slide, market size, competition, product, business model, team, and finally, financials slides.

Successful companies in the study on average, started with company purpose, then offered slides for the problem, solution, why now, market size, product, team, business model, competition, and financials.

The study also looked at which slides were viewed longest. At the top of the list came the financials slide, at 23.2 seconds of viewing time. But only 57 per cent of seed pitches had them – probably because many young companies do not yet have financial data, the study says.

Close behind financials is, interestingly, the team slide, which got on average 22.8 seconds of viewing time. Next is competition, at 16.6, “why now” at 16.3, on so on.

The last place slides might surprise, too. Second to last is the problem slide – the one that lays out what need the company is actually addressing. That slide gets on average, 11.3 seconds of viewing time. And in last place? The solution, at 10.6.

Thoughtful and purposeful

So, the study advises to be thoughtful and purposeful with your financial slide, if you have one, as it will be viewed longest. But it notes: “Spend time on your deck. Specifically, make sure your team slide looks awesome.”

It also advises not to list deal terms in your deck, as those are better delivered in person.

Some of the other interesting findings include the fact that talking to fewer, quality investors is better than talking to as many potential investors as possible. It actually found a slight negative correlation between funding and the number of investors pitched to.

“You’ll likely need to contact 20-30 investors. But you don’t need to contact hundreds,” it states.

The study also advises raising seed funding from seed investors, not angels, if you can: “Firms will give you more money in less time with fewer meetings.”

And, perhaps the most important advice: raising seed funding will take longer than you think, so don’t despair until you’ve been at it for a few months.

See the full study findings here: https://docsend.com/view/p8jxsqr