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Why share a cover letter with your data room Organizing and structuring a data room is important. As Elizabeth Yin of Hustle Fund wrote, “Impressive companies have everything organized, easy to find: All documents are filed in the correct folders All important documents are included Everything is clearly labeled and easily searchable” In addition to the contents of your data room, investors will use your data room to evaluate your organizational skills. To make sure investors can navigate and understand your data room, you need a clear structure and need to give investors the context they need to understand the contents. A cover letter is a great way to introduce investors to your data room and explain its content and structure. Check out a cover letter template to get you started on your next data room below: Cover letter example for your data room Hello — Welcome to our seed stage data room! The purpose of this cover letter is to help you navigate our data room. As always, feel free to email me directly at [Email Address] or text me at [Phone Number.] The video below should be a good starting point: [Embedded 1-3 minute video explaining the layout and format of data room] You’ll notice we have our data room broken down into X major folders: Overview — This page, our most recent pitch deck, and other high level information. Financials — Historical financial documents, statements, and projections for the next 12 months. Cap Table and Financing Information — Our current cap table, founder stock purchase agreements, options plans, 409a valuation, etc. Market Data — Market sizing activities and competitive landscape. Incorporation Docs — Our bylaws, articles of incorporation, and more. Team and Stakeholders — Current employee contracts, relevant experience, and info on current board members. Milestones & Past Investor Updates — Take a look at our last 12 investor updates to see how we’ve grown and communicated the past year. Product — A recent video recording of our product and a few testimonials from customers. Thank you and let me know if you have any questions! [Name] Build and share your data room with Visible At Visible, we oftentimes compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. Beyond DocSend: Exploring Innovative Document Sharing Platforms for Modern Teams With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

New York City has firmly established itself as a premier destination for startups and venture capital, offering an unparalleled ecosystem of innovation and investment opportunities. The city's diverse and vibrant entrepreneurial landscape is bolstered by a wealth of resources, including a dense concentration of venture capital firms, accelerators, and incubators. As a global financial hub, New York provides startups with access to significant funding, strategic partnerships, and a rich talent pool, making it an ideal location for founders looking to launch and scale their businesses. This dynamic environment fosters continuous growth and innovation, positioning New York as a startup and venture capital leader. At Visible, we often compare a startup fundraising process to a traditional B2B sales and marketing funnel. At the top of your funnel, you are adding qualified investors. Nurturing them in the middle of the funnel with email, meetings, pitches, etc. And ideally closing them as a new investor at the bottom of a funnel. Related Resource: How to Find Venture Capital to Fund Your Startup: 5 Methods Just like a sales and marketing funnel, a fundraising funnel needs to start with the right investors for your business (e.g., a qualified lead or qualified investor). One aspect founders will want to research is the geography of the investors and where they invest. Check out a few popular venture capital firms located in New York below: 1. Union Square Ventures According to their website, “Union Square Ventures is a venture capital firm focused on early-stage, growth-capital, late stage, and startup financing.” Learn more about Union Square Ventures by checking out their Visible Connect Profile here → Investment Range Union Square Ventures invests in a large range of companies. Looking at their website and you’ll find that they invest in anywhere between Series A and Series D stages. Industries Union Square is self-described as a “thesis-driven” investor. They are currently investing off of their Thesis 3.0: “Enabling trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols.” Check out more about their Thesis 3.0, recent investments, and key ideas below: 2. Insight Partners According to the Insight Partners website, “Insight accelerates revenue and profit in software companies. Our obsession with software has produced a habit of success. We recognize industry patterns, emerging tech markets and software trends. We’ve accumulated the knowledge to understand the strategies needed to win.” Learn more about Insight Partners by checking out their Visible Connect Profile here → Investment Range Insight Partners will invest across every stage but their bread and butter are “scale-up” companies. Insight will invest anywhere from pre-seed to series C and beyond stages — generally with a check size between $10M and $350M. Industries Insight is focused on software companies. However, they invest in a number of different sectors that you can find here (or below): 3. Scout Ventures According to the Scout Ventures website, “Scout Ventures is an early-stage venture capital firm that invests in frontier and dual-use technologies built by veterans, intelligence leaders, and premier research labs. By leveraging our network of professional investors, operators, and experienced entrepreneurs, Scout can effectively execute every aspect of our investment thesis. We’re also paving the way for military veterans and intelligence professionals to access hundreds of millions in government grants and non-dilutive capital. The firm has three locations: Austin, New York City, Washington, DC.” Learn more about Scout Ventures by checking out their Visible Connect Profile here → Investment Range Scout Ventures writes checks anywhere between $100,000 and $3M. According to their website, “We lead Seed rounds with $1-2M initial checks and reserve capital for follow-on investments up to Series B.” Industries According to the Scout website, “We focus on sectors aligned to our experience serving in defense and building multi-billion dollar companies: AI/ML, quantum computing, robotics, advanced materials science, security, space & aerospace, and advanced energy.” 4. Greycroft According to their website, “Greycroft is a venture capital firm that focuses on technology start-ups and investments in the Internet and mobile markets.” Learn more about Greycroft by checking out their Visible Connect Profile here → Investment Range According to the team at Greycroft, “Greycroft typically makes initial investments from $500,000 at the seed stage to up to $30 million from the growth stage. We are an active Series A investor and typically invest between $1 million and $10 million. The growth fund targets investing $10 to $30 million on an initial basis and may reserve up to double that amount over time. The growth fund focuses on later-stage companies with proven unit economics, annual revenue growth in excess of 50%, and a management team that is prepared to scale.” Industries On the Greycroft website, you’ll find that they invest in a number of different industries — ”We invest across a broad range of Internet sectors. We currently group our portfolio into four verticals: Consumer Internet, Fintech, Healthcare, and Enterprise Software.” 5. RRE Ventures RRE Ventures has been funding software startups since the 90s. According to their website, “RRE Ventures is a New York-based venture capital firm that offers early-stage funding to software, internet, and communications companies.” Learn more about RRE Ventures by checking out their Visible Connect Profile here → Investment Range The team at RRE invests in a variety of early-stage tech and software companies. According to their Visible Connect profile, they invest in Series A and B companies with an average check size between $4M and $15M. Industries According to their website, “RRE invests in early-stage, technology-enabled companies across all sectors and across the country. We back credible teams executing against incredible ideas to build category-defining businesses.” Check it out here or learn more below: 6. Lerer Hippeau According to their website, “Lerer Hippeau is an early-stage venture capital fund founded and operated in New York City. We invest in good people with great ideas who redefine categories — and create new ones entirely.” Learn more about Lerer Hippeau by checking out their Visible Connect Profile here → Investment Range The team at Lerer Hippeau has 3 funds that invest in pre-seed to Series C and beyond companies. Industries The team at Lerer Hippeau is industry-agnostic and will invest in any company — including enterprise and consumer landscapes. 7. Starta According to their website, “​​Starta is a venture ecosystem to find, foster, and fund early-stage talent in tech. Our mission is to provide opportunities to: International startups who want to scale globally and raise capital Aspiring industry leaders, seeking professional training Investors who believe in long-term growth potential and a strong connection with the community Starta values inclusivity and diversity. Having worked with over 200 startups from all over the world, we intensively focus on bringing equal opportunities and support to the ecosystem.” Learn more about Starta by checking out their Visible Connect Profile here → Investment Range Like many of the other firms on this list, Starta has multiple funds that invest in many stages. Starta operates both an accelerator and early-stage fund intended for seed and series A companies: Industries The Starta team has a focus on international startups that are looking to expand and scale their US presence. 8. FirstMark FirstMark is an early-stage venture capital firm headquartered in New York City. As put by their team, “We are proud to back the ambitious founders of the most iconic companies in the world.” Learn more about FirstMark by checking out their Visible Connect Profile here → Investment Range According to their Visible Connect profile, the team at FirstMark writes checks anywhere between $500k and $15M. Industries The team at FirstMark invests in companies of a variety of industries and sectors. They have major focus areas of Enterprise, Consumer, and Frontier companies. 9. Hypothesis According to the Hypothesis website, “We build and fund companies. We’re a startup studio and seed fund that launches, funds, and scales exceptional companies.” Learn more about Hypothesis by checking out their Visible Connect Profile here → Investment Range As a startup studio, Hypothesis focuses on finding successful founders and co-founders and helps them launch and scale businesses. In addition to capital, Hypothesis portfolio companies receive resources and help with sales and marketing, hiring, product development, follow-up funding, etc. Industries The team at Hypothesis will invest in companies across many industries and are focused on “mission-driven” companies and founders. 10. Interlace Ventures According to the team at Interlace Ventures, “Investing in early-stage commerce- and retail-technology companies gives us unparalleled access to the latest technological innovations and trends across commerce and retail. We leverage this access by partnering with global brands and retailers to support their innovation efforts. We do this through a variety of methods, all of with are tailored after each partner’s individual needs and priorities.” Learn more about Interlace Ventures by checking out their Visible Connect Profile here → Investment Range The team at Interlace invests in pre-seed to series A-stage companies. According to their Visible Connect Profile, they will write checks anywhere between $150k and $600k. Industries Interlace has a focus on commerce and retail companies. 11. FJ Labs FJ Labs is a prominent venture capital firm based in New York City, renowned for its extensive network and hands-on approach to investing. Founded by experienced entrepreneurs Fabrice Grinda and Jose Marin, FJ Labs focuses on creating value for founders and investors. The firm leverages its deep industry expertise and global connections to support startups in achieving their growth potential. FJ Labs is particularly noted for its collaborative ethos, working closely with portfolio companies to navigate the complexities of scaling and market expansion. Learn more about FJ Labs by checking out their Visible Connect Profile here → Investment Range FJ Labs typically invests in pre-seed to Series A rounds, with investment amounts ranging from $50,000 to $500,000. Focusing on early-stage investments, FJ Labs provides critical funding enabling startups to develop their products, gain market traction, and prepare for subsequent funding rounds. Their flexible investment strategy allows them to tailor their support to the unique needs of each startup, ensuring that founders receive the resources necessary to succeed. Industries FJ Labs has a diverse investment portfolio, strongly emphasizing marketplaces and network effects businesses. They are particularly interested in industries such as e-commerce, real estate tech, fintech, and mobility. FJ Labs seeks out startups that leverage technology to disrupt traditional markets and create new growth opportunities. Their broad industry focus enables them to identify innovative business models and support visionary entrepreneurs across various sectors. 12. VentureOut VentureOut is a unique venture capital firm and accelerator based dedicated to bridging the gap between international startups and the US market. With a focus on helping startups expand globally, VentureOut offers a comprehensive suite of services designed to support international entrepreneurs in scaling their businesses in the US. The firm combines investment with an accelerator program that provides mentorship, networking opportunities, and strategic guidance, making it an ideal partner for startups looking to make a significant impact in the American market. Investment Range VentureOut typically invests in early-stage companies, with investment amounts ranging from $50,000 to $250,000. Their funding is often coupled with participation in their accelerator programs, which offer startups additional resources to refine their business models, develop go-to-market strategies, and establish a presence in the US. This dual approach of investment and acceleration helps startups gain the momentum they need to succeed in a competitive market. Learn more about VentureOut by checking out their Visible Connect Profile here → Industries VentureOut focuses on various industries, with a particular emphasis on technology-driven sectors. They are especially interested in software, fintech, health tech, and enterprise tech startups. By concentrating on these high-growth areas, VentureOut aims to support innovative companies that have the potential to transform industries and drive technological advancements. Their industry focus and international expertise position VentureOut as a valuable partner for startups seeking to expand their reach and impact in the US market. 13. FirstMark FirstMark is a distinguished venture capital firm known for its commitment to backing visionary entrepreneurs. With a track record of successful investments, FirstMark partners with startups that have the potential to revolutionize their industries. The firm is dedicated to providing not only capital but also strategic support and access to an extensive network of industry leaders. By fostering close relationships with their portfolio companies, FirstMark helps founders navigate the challenges of scaling their businesses and achieving long-term success. Learn more about FirstMark by checking out their Visible Connect Profile here → Investment Range FirstMark typically invests in seed and early-stage companies, with investment amounts ranging from $500,000 to $10 million. This substantial range allows FirstMark to support startups at various stages of their development, from initial product launches to significant growth phases. Their flexible investment approach ensures that each startup receives the appropriate level of funding to meet its unique needs and objectives. Industries FirstMark has a broad investment focus with a strong emphasis on technology and innovation. They are particularly interested in sectors such as enterprise software, consumer technology, fintech, healthcare, and emerging technologies like AI and blockchain. FirstMark seeks out startups that are poised to disrupt traditional markets and create new growth opportunities. By investing in a diverse array of industries, FirstMark aims to support the next generation of transformative companies and help shape the future of technology and innovation. 14. New York Angels New York Angels is a prominent angel investment group based in New York City, dedicated to providing early-stage funding and mentorship to innovative startups. Comprising a diverse network of seasoned entrepreneurs and business leaders, New York Angels offers a wealth of experience and strategic insight to help young companies grow and succeed. The organization is known for its collaborative approach, working closely with founders to refine their business models, develop market strategies, and connect with additional resources and expertise. Learn more about New York Angels by checking out their Visible Connect Profile here → Investment Range New York Angels typically invests in seed and early-stage companies, with investment amounts ranging from $250,000 to $1 million. By focusing on the crucial early stages of a startup's development, New York Angels provides the necessary capital to help companies validate their business ideas, build their initial products, and gain market traction. Their investment approach is designed to offer startups the financial support they need to reach critical milestones and prepare for subsequent funding rounds. Industries New York Angels has a broad investment focus, with a particular interest in technology-driven sectors. They frequently invest in industries such as software, fintech, health tech, consumer products, and media. This diverse industry focus allows New York Angels to support a wide array of innovative startups, fostering growth and innovation across multiple sectors. By backing companies that leverage technology to create new solutions and disrupt existing markets, New York Angels aims to contribute to the advancement of the entrepreneurial ecosystem in New York City and beyond. 15. New York Venture Partners New York Venture Partners (NYVP) is a leading venture capital firm based in New York City, focused on supporting early-stage startups with a combination of capital, mentorship, and strategic resources. Known for its hands-on approach, NYVP aims to help founders build scalable businesses by providing more than just funding. The firm's extensive network and industry expertise enable it to offer valuable insights and connections, making NYVP a vital partner for startups looking to navigate the complexities of growth and market entry. Learn more about New York Venture Partners by checking out their Visible Connect Profile here → Investment Range New York Venture Partners typically invests in seed and early-stage companies, with investment amounts ranging from $100,000 to $1 million. This investment range is designed to provide startups with the essential funding required to develop their products, refine their business models, and achieve early market traction. NYVP's focus on early-stage investments ensures that startups receive the support they need during the critical phases of their development. Industries NYVP has a diverse investment focus, particularly on technology and innovation-driven sectors. They are especially interested in industries such as artificial intelligence, machine learning, digital media, consumer internet, and enterprise software. By targeting these high-growth areas, New York Venture Partners aims to back startups that have the potential to disrupt traditional markets and introduce groundbreaking technologies. Their broad industry focus allows them to identify and support promising startups across a wide range of fields, fostering innovation and entrepreneurial success in the New York City area and beyond. 16. Primary Primary is a prominent venture capital firm based in New York. It is dedicated to investing in early-stage startups and helping them grow into market leaders. Known for its data-driven approach and hands-on involvement, Primary provides comprehensive support to its portfolio companies. The firm leverages its deep industry knowledge and extensive network to offer strategic guidance, operational expertise, and valuable resources. Primary's commitment to building long-term partnerships with founders makes it a trusted ally for startups navigating the challenges of scaling and achieving sustainable growth. Learn more about Primary by checking out their Visible Connect Profile here → Investment Range Primary typically invests in seed and Series A rounds, with investment amounts ranging from $1 million to $5 million. This substantial investment range allows Primary to provide the necessary capital for startups to develop their products, expand their teams, and accelerate their go-to-market strategies. By focusing on early-stage investments, Primary ensures that founders receive the financial support they need during the critical phases of their company's development. Industries Primary has a strong focus on technology-driven sectors, particularly those with the potential for significant market disruption. They are especially interested in industries such as SaaS, e-commerce, fintech, health tech, and proptech. Primary seeks out startups that leverage innovative technologies to solve complex problems and create new market opportunities. Their industry focus allows them to identify and support high-potential startups across various fields, fostering innovation and driving growth in the New York City startup ecosystem. Get Connected With Investors Today At Visible, we oftentimes compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. Related Resource: The 12 Best VC Funds You Should Know About With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here. Related Read: Private Equity vs Venture Capital: Critical Differences Related Resource: 11 Top Venture Capital Firms in Boston

Internal rate of return (IRR) for VCs is the expected annualized return a fund will generate based on a series of cash flows over the duration of the fund, which is typically ten years. Unlike fund metrics such as RVPI, TVPI, and DPI, which are based on multiples, IRR takes into account the time value of money. IRR can be used to measure both fund performance and the performance of an individual investment. Related Resource → VC Fund Metrics 101 What makes IRR hard to predict in a fund context is cash flows happen at irregular periods because capital calls are made by funds on an as-needed How Is IRR Used by LPs IRR is a critical metric for Limited Partners (LPs) in venture capital, helping them make informed investment decisions by benchmarking a fund’s performance against its peers. By considering the time since the initial cash outflow and comparing it against similar funds in the same asset class, LPs can assess the efficiency and profitability of their investments. IRR's significance lies in its ability to account for the time value of money, providing a more nuanced view of an investment's potential returns over time. This makes it an invaluable tool for evaluating both short-term and long-term fund performance. For example, an LP might use IRR data to compare the performance of different funds launched in the same year, helping to identify which fund managers consistently deliver higher returns. Cambridge Associates is a well-known resource that publishes quarterly benchmarks and statistics, compiling data from thousands of fund managers and their funds. These benchmarks allow LPs to compare their fund’s IRR against a broad spectrum of data, ensuring they have a comprehensive understanding of their fund's performance relative to the market. You can check out their reports here on the Cambridge Associates website. In practical terms, an LP might look at the IRR of a prospective fund to decide whether to commit capital, comparing it against the IRRs of existing funds in their portfolio and the broader market. For instance, if a new fund has an IRR significantly above the median benchmark provided by Cambridge Associates, it might be seen as a more attractive investment opportunity. How Is IRR Calculated for Venture Capital Funds? Wrapping your head around the IRR formula can quickly put your brain in a pretzel so it’s recommended to use Excel, Google Sheets, or a platform like Visible to calculate IRR. In the IRR equation below, we’re solving for the discount rate (or the expected compound annual rate of return) that makes the net present value of an investment zero. IRR is calculated by solving for the rate of return (“r”) of a series of cashflows (“C”) over a period of time (“n” to the total number of periods “N”): Accurate cash flow data is crucial in calculating IRR because even small errors can significantly affect the result. For venture capital funds, it’s essential to meticulously track all cash inflows and outflows. This includes capital calls, management fees, expenses, and distributions to LPs. Using platforms like Visible can streamline this process by providing tools to automate and track these cash flows accurately. Check out this article for an example calculation of IRR within the fund context. IRR vs. CAGR While IRR and CAGR (Compound Annual Growth Rate) are both metrics used to evaluate the performance of investments, they serve different purposes and are calculated differently. Understanding these differences is crucial for investors when analyzing investment returns. What is CAGR? CAGR stands for Compound Annual Growth Rate and measures the mean annual growth rate of an investment over a specified period longer than one year. It provides a smoothed annual rate of return, assuming that the investment grows at a consistent rate each year. CAGR is particularly useful for comparing the historical performance of investments over time, as it neutralizes the effects of volatility and provides a straightforward percentage growth rate. Key Differences Between IRR and CAGR: 1. Consideration of Cash Flows: CAGR assumes a single investment and does not account for intermediate cash flows. It provides a geometric mean return over the period. IRR, on the other hand, takes into account the timing and magnitude of all cash flows, including intermediate inflows and outflows, providing a more detailed picture of the investment's performance. 2. Calculation Complexity: CAGR is simpler to calculate as it only requires the beginning value, ending value, and the number of periods. IRR is more complex, involving iterative calculations to find the rate that sets the NPV of all cash flows to zero. 3. Reinvestment Assumption: CAGR does not make any assumptions about reinvestment rates. It purely reflects the compounded annual growth rate. IRR assumes that interim cash flows are reinvested at the same rate as the IRR, which can sometimes be unrealistic. 4. Application Context: CAGR is often used to compare the performance of investments, funds, or portfolios over time, providing a clear picture of historical growth. IRR is widely used in capital budgeting and private equity/venture capital to evaluate the profitability of individual projects or investments, considering the specific timing of cash flows. IRR vs. ROI While IRR and ROI (Return on Investment) are both crucial metrics for evaluating the performance of investments, they serve distinct purposes and are calculated differently. Understanding these differences is key for investors when analyzing their investments. What is ROI? ROI stands for Return on Investment and measures the gain or loss generated on an investment relative to its initial cost. It is a straightforward metric that indicates the efficiency and profitability of an investment. Key Differences Between IRR and ROI: 1. Consideration of Time: ROI does not account for the time value of money. It provides a snapshot of profitability without considering how long the investment was held. IRR incorporates the time value of money, giving a more accurate reflection of an investment's performance over time by considering the timing of cash flows. 2. Calculation Complexity: ROI is easy to calculate and understand, making it a popular choice for quick assessments of investment performance. IRR is more complex, requiring iterative calculations to find the rate that sets the net present value of all cash flows to zero. 3. Reinvestment Assumptions: ROI does not make any assumptions about reinvestment of returns. IRR assumes that interim cash flows are reinvested at the same rate as the IRR, which can sometimes be unrealistic. 4. Application Context: ROI is often used for short-term investments and simple comparisons. It is particularly useful for evaluating the overall profitability of different investments without delving into the timing of returns. IRR is widely used in capital budgeting and private equity/venture capital to evaluate the profitability of projects or investments with multiple cash flows over time. Defining VC Fund Cash Flows Understanding the cash flows of a VC fund is crucial for accurately calculating metrics like IRR. The timing and magnitude of these cash flows significantly impact the fund's overall performance. Let’s delve into the types of cash flows in VC funds, their timing, and their implications for IRR. Cash Outflow Examples Capital Calls: These are requests by the VC fund to its LPs to provide a portion of the committed capital for specific investments. For example, if a fund decides to invest $1 million in a startup, it might issue a capital call for $1 million from its LPs. The timing of these calls is crucial; delaying capital calls can enhance IRR by reducing the time period over which the capital is invested. Management Fees: Typically, VC funds charge annual management fees, often around 2% of the committed capital. For instance, a $100 million fund might charge $2 million annually to cover salaries, operational costs, and other expenses. These fees reduce the net returns to LPs, impacting the net IRR​​​​. Fund Expenses: These include legal fees, administrative costs, and technology expenses. For example, a fund might incur $100,000 annually in legal and administrative fees, which also affect net returns. These expenses are necessary for the day-to-day operations of the fund but reduce the overall returns available to LPs. Cash Inflows Examples Distributions: These are returns to LPs from the fund's investments, usually following a liquidity event such as an acquisition, merger, or IPO. For example, if a portfolio company is acquired for $10 million, the proceeds distributed to LPs constitute a cash inflow. Early and large distributions can significantly boost IRR. Dividends and Interest: Occasionally, portfolio companies might pay dividends or interest on convertible notes. For example, a company might distribute $50,000 in dividends annually to the VC fund, contributing to cash inflows. These payments can provide a steady stream of returns, enhancing the IRR by providing earlier cash flows. Impact of Timing on Cash Flows: The timing of cash flows is critical in calculating IRR. Here’s why: Early Distributions: Receiving returns early in the fund's life can significantly enhance IRR because it reduces the period over which the capital is at risk and increases the annualized return. For instance, an early exit that returns capital within the first three years can result in a much higher IRR compared to a similar exit occurring in year seven. Delayed Capital Calls: By calling capital only when necessary, funds can avoid having large sums of uninvested capital, which would otherwise result in a lower IRR due to what is known as "cash drag." For example, if a fund delays a $1 million capital call by two years, it improves IRR by reducing the period the capital is deployed. Lumpy Cash Flows: Venture capital investments often result in irregular, or lumpy, cash flows. Large inflows from a significant exit can cause IRR to spike, while periods with no inflows might show a temporary decline in IRR. Managing these irregularities is a key challenge for fund managers. Examples and Implications for IRR: Example 1: A VC fund invests $2 million in a startup and exits three years later with a $10 million return. The IRR calculation will consider the initial $2 million outflow and the $10 million inflow three years later, likely resulting in a high IRR due to the substantial gain over a relatively short period. Example 2: Another fund might make smaller, incremental investments over time, leading to multiple capital calls and varied exit timings. If these exits are delayed, the IRR might be lower compared to a fund with early, significant exits. Want to learn more about tracking key fund metrics in Visible? Gross vs Net IRR When evaluating a venture capital fund's performance, it's essential to understand the difference between Gross IRR and Net IRR. Both metrics provide insights into the fund's returns, but they account for different factors and expenses, offering distinct perspectives on performance. Gross IRR: Gross IRR represents the annualized rate of return on an investment before deducting any fees or expenses. This metric focuses solely on the performance of the fund's investments, providing a measure of the raw investment skill of the fund managers. For example, if a fund invests $1 million and it grows to $2 million over three years, the Gross IRR calculation would not consider management fees, carried interest, or any other expenses incurred by the fund. This gives an unfiltered view of the investment returns generated by the fund's portfolio. Net IRR: Net IRR, on the other hand, accounts for the deductions of all management fees, fund expenses, and carried interest. This metric reflects the actual return the LPs receive after all fund management costs are considered. For instance, if the same $1 million investment grows to $2 million but incurs $200,000 in management fees and $100,000 in carried interest, the Net IRR would be lower than the Gross IRR. This adjusted figure provides a more accurate reflection of the returns that LPs can expect to receive. Key Differences and Implications: 1. Fee Consideration: Gross IRR does not include management fees, fund expenses, or carried interest. Net IRR includes these fees, providing a realistic view of the returns to LPs. 2. Performance Benchmarking: Gross IRR can be useful for comparing the investment performance across different funds without the influence of varying fee structures. Net IRR is crucial for LPs as it reflects the actual profitability of their investment after all costs are accounted for. 3. Decision Making: Gross IRR helps in assessing the raw investment skills of fund managers. Net IRR aids LPs in making informed decisions about where to allocate their capital based on the net returns they can expect to receive. By understanding Gross and Net IRR, investors can gain a comprehensive view of a fund's performance, ensuring they make well-informed investment decisions. Unrealized vs. Realized IRR When analyzing a venture capital fund's performance, it is crucial to distinguish between Unrealized IRR and Realized IRR. These metrics reflect different stages of the investment process and provide insights into both current valuations and actual returns. Unrealized IRR: Unrealized IRR includes both actual profits and theoretical gains based on the current valuations of the portfolio companies that have not yet been liquidated. This metric is forward-looking and speculative, as it assumes that the current valuations of the investments will be realized upon exit. For example, if a fund holds equity in a startup currently valued at $10 million but has not yet sold its stake, the unrealized gains contribute to the Unrealized IRR. This provides an optimistic view of the fund's potential returns but is subject to market fluctuations and the eventual success of the exits. Realized IRR: Realized IRR, on the other hand, only includes the actual cash flows that have been received from liquidated investments. This metric is based on historical data and provides a concrete measure of the returns that have been distributed to the LPs. For instance, if a fund invested $1 million in a company and later sold its stake for $5 million, the $4 million profit would be included in the Realized IRR. This figure gives a reliable measure of the fund's performance based on actual returns. Key Differences and Implications: 1. Valuation Basis: Unrealized IRR is based on current valuations and future projections. Realized IRR is based on actual, historical cash flows. 2. Reliability: Unrealized IRR can be speculative and subject to change based on market conditions and the success of future exits. Realized IRR provides a dependable measure of past performance. 3. Use Case: Unrealized IRR is useful for assessing the fund's potential future returns and the current value of its portfolio. Realized IRR is crucial for understanding the fund's actual profitability and historical performance. The IRR J-CURVE The IRR J-Curve describes the typical pattern of IRR over the lifespan of a venture capital fund. It illustrates how IRR typically decreases in the early years of a fund and then rises sharply in the later years as investments mature and exits occur. Understanding the J-Curve is essential for both fund managers and LPs as it has significant implications for investment strategy and expectations. Understanding the J-Curve: In the early stages of a venture capital fund, significant capital outflows occur as the fund invests in startups and incurs management fees and operational expenses. These outflows typically result in a negative IRR during the initial years, which is often called the "valley of death" in the J-Curve. As time progresses, some portfolio companies start to mature and achieve liquidity events such as acquisitions, mergers, or IPOs. These events generate cash inflows, which are distributed back to the LPs, causing the IRR to rise. Eventually, the IRR may surpass the initial negative values and reach a positive and often substantial rate of return as more successful exits occur. Implications for Fund Managers and LPs: 1. Expectation Management: Fund Managers: Need to communicate the J-Curve effect to LPs, explaining that early negative returns are typical and part of the investment process. This helps manage expectations and reduce concerns during the initial years. LPs: Should understand that initial negative returns do not necessarily indicate poor fund performance. Instead, they reflect the natural investment cycle in venture capital. 2. Investment Strategy: Fund Managers: Should strategically plan capital calls and investments to optimize the timing and magnitude of cash inflows. Delaying capital calls until necessary can minimize early outflows and improve the overall IRR. LPs: Need to be patient and maintain a long-term perspective, recognizing that the most significant returns typically occur later in the fund's lifecycle. 3. Performance Evaluation: Fund Managers and LPs: Both parties should use the J-CCurve as a benchmark for evaluating fund performance. Comparing the fund's IRR progression to the expected J-Curve can provide insights into whether the fund is on track or if adjustments are needed. Example: Consider a venture capital fund with a 10-year lifecycle. In the first three years, the fund experiences negative IRR due to capital outflows for investments and fees. By year five, one of the portfolio companies is acquired, generating a significant cash inflow. This event causes the IRR to rise sharply, marking the beginning of the upward curve. By the end of the fund's lifecycle, several successful exits have occurred, resulting in a high positive IRR that exceeds the initial negative values. Related resource: J-Curve and IRR Putting IRR into Vintage Context When evaluating the performance of VC funds, it's essential to consider the vintage year—the year in which the fund began deploying capital. Comparing funds within the same vintage year allows for a fair assessment, as these funds are subject to similar market conditions and economic cycles. Understanding the vintage year context can significantly impact the interpretation of a fund's RR. Relevance of Comparing Funds within the Same Vintage Year: 1. Consistent Market Conditions: Funds of the same vintage year are exposed to the same macroeconomic environment, including interest rates, inflation, and market sentiment. These factors heavily influence investment opportunities and outcomes. 2. Economic Cycles and Performance: Economic cycles, including periods of expansion and recession, affect the availability of capital, the number of viable startups, and exit opportunities. Funds started in an economic downturn may acquire investments at lower valuations but might struggle with exits if the downturn persists. Conversely, funds launched during economic booms might invest at higher valuations but benefit from more lucrative exit opportunities as the economy continues to grow. Impact of Market Conditions and Economic Cycles Market conditions and economic cycles play a critical role in determining the performance of VC funds. Funds launched during bullish markets typically experience different growth trajectories compared to those started in bearish markets. Bullish Market Example: A fund started in 2010, a period of economic recovery and growth, may benefit from a favorable market environment, leading to higher valuations and more exit opportunities. This can result in higher IRRs compared to funds from other vintage years. According to Cambridge Associates, funds from the 2010 vintage year have shown robust performance due to strong market conditions and increased IPO activities​​. Bearish Market Example: In contrast, a fund launched in 2001 during the dot-com bust faced a challenging environment with limited exit opportunities and lower valuations. Such funds might initially show lower IRRs, reflecting the tough economic conditions during their early years. A study by Preqin indicates that vintage 2001 funds had lower early IRRs but showed significant improvement as the market recovered and exit opportunities increased​​. Examples Illustrating Vintage Year Impact on IRR: 1. Vintage Year 2008: Funds started in 2008 faced the immediate aftermath of the financial crisis. Initial IRRs were likely low due to the challenging investment climate. However, those funds that managed to survive and deploy capital strategically during the downturn might have seen substantial IRR increases as the economy recovered in the following years. As per a report from PitchBook, vintage 2008 funds showed a notable uptick in IRR after 2012, correlating with the broader economic recovery and increased M&A activities. 2. Vintage Year 2015: Funds launched in 2015 benefited from a prolonged period of economic growth and technological innovation. High valuations and active IPO markets provided numerous exit opportunities, resulting in strong IRRs. Cambridge Associates' benchmark data shows that vintage 2015 funds had higher median IRRs compared to previous years, driven by successful exits in sectors like technology and healthcare. By placing IRR in the context of vintage years, investors can better understand the performance of their VC investments relative to market conditions and economic cycles. This contextual understanding helps in making more informed decisions and setting realistic expectations for future fund performance. Considerations of IRR The IRR is a valuable metric for assessing the performance of VC investments. However, it has several limitations and should be used cautiously. Understanding these flaws and the contexts in which IRR may be inappropriate can help investors make more informed decisions. 1. Sensitivity to Cash Flow Timing: Explanation: IRR is highly sensitive to the timing of cash flows. Even small changes in the timing of cash inflows or outflows can lead to significant variations in the IRR calculation. Implication: This sensitivity can sometimes provide a misleading picture of an investment's performance, especially if the cash flows are irregular or unpredictable, which is common in venture capital investments. Example: If a fund delays a significant cash inflow by just a few months, the IRR can change dramatically, potentially misrepresenting the true performance of the investment​​ . 2. Reinvestment Assumptions: Explanation: IRR assumes that interim cash flows are reinvested at the same rate as the IRR itself. This assumption can be unrealistic, particularly in volatile markets where finding equally profitable reinvestment opportunities is challenging. Implication: This can lead to an overestimation of the investment’s performance if the actual reinvestment rate is lower than the calculated IRR. Example: If a fund generates an IRR of 20% but can only reinvest interim returns at a rate of 5%, the actual performance will be lower than the IRR suggests . 3. Multiple IRRs: Explanation: In cases where an investment has alternating positive and negative cash flows, there can be multiple IRRs that satisfy the NPV equation. This can create confusion and ambiguity. Implication: Multiple IRRs make it difficult to determine the actual rate of return, complicating the decision-making process. Example: A project with cash flows that include significant inflows followed by large outflows might yield more than one IRR, making it unclear which rate accurately represents the investment's performance . 4. Lack of Scale Sensitivity: Explanation: IRR does not account for the scale of the investment. A small project with a high IRR might be less attractive than a larger project with a slightly lower IRR if the latter generates significantly higher absolute returns. Implication: Investors might prioritize projects with high IRRs without considering the overall size and absolute returns of the investment, potentially missing out on more lucrative opportunities. Example: A $1 million investment yielding a 30% IRR might seem attractive, but a $10 million investment with a 20% IRR could provide substantially greater total returns​​ . 5. Inappropriate for Short-Term Investments: Explanation: IRR is less meaningful for short-term investments because it annualizes the return, which can exaggerate the performance of short-duration projects. Implication: Using IRR for short-term investments can give a skewed perception of performance, making short-term gains appear disproportionately attractive. Example: An investment with a 50% return over six months might show an extremely high annualized IRR, but this does not reflect sustainable long-term performance . Situations Where IRR is Not Appropriate: Projects with Non-Standard Cash Flows: When investments have non-standard or erratic cash flows, IRR may not provide a reliable measure of performance. Comparing Different Sized Investments: When comparing investments of significantly different sizes, IRR can be misleading as it does not reflect the absolute value of returns. Short-Term Investments: IRR can exaggerate the perceived performance for short-term projects, making it less useful for accurate comparison. Tracking IRR in Visible Visible lets you track and visualize over 35+ key fund metrics including IRR in one place. Get started with calculating your IRR by leveraging Visible's investment data features. Track the round details for your direct investments and follow on rounds. By utilizing Visible, investors can better understand their fund’s performance, streamline data management, and improve decision-making processes, ultimately driving better investment outcomes. Related resource: Investor Update Dashboard Market Penetration Strategy Important Venture Capital Metrics Important Startup Financials

Understanding your Total Addressable Market (TAM) is essential for any startup founder aiming to attract investors and drive growth. In this article, we'll define TAM, explain its significance, and differentiate it from similar metrics like Serviceable Available Market (SAM) and Serviceable Obtainable Market (SOM). You'll learn how to calculate your TAM, recognize the right time to expand it, and discover five practical strategies for successful TAM expansion. From boosting brand visibility to exploring new markets, we'll provide actionable insights to help you maximize your business potential. Dive in to ensure your startup's growth trajectory stays on track. What Is Total Addressable Market (TAM)? The TAM represents the overall revenue opportunity for a product or service if it achieves 100% market share. It quantifies the total demand for a product or service within a particular market. This metric helps businesses understand the full potential of their market, guiding strategic decisions and investment priorities​​​​. Importance of TAM Investment Decisions: TAM helps companies determine the potential return on investment for new products or market expansions. It provides a clear picture of the revenue potential, which is crucial for attracting investors​​​​. Strategic Planning: By understanding TAM, businesses can prioritize specific products, customer segments, and market opportunities, ensuring that resources are allocated effectively to maximize growth​​. Market Viability: Evaluating TAM allows companies to assess whether a market is large enough to support their growth goals. This can prevent entering markets that are too small or overly saturated​​. Competitive Analysis: Knowing the TAM helps businesses understand the competitive landscape, identify market gaps, and develop strategies to capture market share​​. Long-term Growth: TAM provides insights into the potential scalability of a business, helping to forecast long-term growth and sustainability​​. TAM Vs. SAM Vs. SOM Understanding the differences between Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) is crucial for strategic business planning and market analysis. These distinctions help businesses effectively allocate resources, prioritize market segments, and develop strategies that align with their capabilities and market conditions. Definitions Serviceable Available Market (SAM): SAM is the portion of the Total Addressable Market that your company can realistically target with its products or services. It considers geographical, regulatory, and logistical constraints that might limit market reach​​​​. Serviceable Obtainable Market (SOM): SOM, also known as the share of market, represents the segment of the SAM that your company can realistically capture, considering factors like competition, market saturation, and your company's capabilities​​​​. Differences Between TAM, SAM, and SOM Scope: TAM represents the broadest market size and includes all potential customers and revenue opportunities without any limitations. SAM narrows this down by factoring in the portions of the market that are within your reach based on current operational constraints. SOM further refines this by identifying the realistic market share you can capture, given existing competition and market conditions​​​​. Application: TAM is often used to gauge the overall market potential and is particularly useful for attracting investors by showcasing the maximum opportunity. SAM helps businesses focus on specific segments where they can actually operate, ensuring more targeted marketing and sales efforts. SOM provides a realistic view of the immediate opportunities and helps in setting achievable sales and growth targets​​​​. Related resource: Total Addressable Market vs Serviceable Addressable Market How To Calculate TAM Calculating the TAM is a critical step for any business looking to understand its full market potential. Here are three primary methods to calculate TAM: 1. Top-Down Approach The top-down approach starts with a broad market size and narrows it down to your specific market segment. This method typically relies on industry reports and market research studies. Step 1: Identify the total market size using industry data from reputable sources such as Gartner, Forrester, or industry-specific reports. Step 2: Segment this data to reflect your specific market. For example, if you are targeting small businesses with your software, you would narrow the data to show the number of small businesses in your market. Step 3: Apply relevant percentages to reflect the portion of the market you can realistically target. Example: If the overall market for software is $100 billion and small businesses represent 20% of this market, your TAM would be $20 billion​​​​. 2. Bottom-Up Approach The bottom-up approach is based on actual data from your business operations. It is often seen as more accurate because it uses real sales figures and customer data. Step 1: Calculate the average revenue per user (ARPU) by dividing your total revenue by the number of customers. Step 2: Multiply your ARPU by the total number of potential customers in your market. Example: If your ARPU is $1,000 and there are 50,000 potential customers, your TAM would be $50 million​​​​. Related resource: Bottom-Up Market Sizing: What It Is and How to Do It 3. Value-Theory Approach The value-theory approach estimates TAM based on the value that consumers derive from your product or service and how much they are willing to pay for it. Step 1: Identify the unique value your product offers compared to competitors. Step 2: Estimate how much more customers would be willing to pay for your product due to its unique features. Step 3: Multiply this enhanced value by the total number of potential customers. Example: If customers are willing to pay 20% more for your product than the standard market price and there are 50,000 potential customers, calculate the TAM based on this increased price point​​. Tips Use multiple methods to get a well-rounded view of your TAM. Validate your assumptions with market research and customer feedback. Regularly update your TAM calculations to reflect changes in the market and your business. Related resource: How to Model Total Addressable Market (Template Included) When Is The Right Time To Invest In TAM Expansion? Investing in expanding your TAM is a significant decision that can drive substantial growth for your business. Here are some signs that indicate it’s the right time to consider a TAM expansion strategy: Market Saturation: If you’ve captured a significant share of your current market and growth rates are slowing down, it’s a clear sign that expanding into new markets or customer segments is necessary to maintain growth momentum​​​​. Product Maturity: When your existing products or services have reached maturity in their lifecycle and there's limited scope for further innovation or differentiation within the current market, expanding TAM by entering new markets or developing new products can provide new growth avenues​​​​. Competitive Pressure: Increasing competition in your current market can erode market share and profitability. Expanding your TAM can help you mitigate these risks by diversifying your market presence and reducing dependency on a single market​​. Customer Demand: If there is growing interest or demand for your product from customers outside your current market, it’s a good indicator that there are untapped opportunities that you can explore​​. Strategic Goals: When your business has set ambitious growth targets that cannot be met within the confines of your current TAM, expanding into new markets becomes essential to achieve these goals​​. Risks of Not Expanding TAM Growth Stagnation: Without TAM expansion, your business may struggle to achieve its growth targets, leading to stagnation. This can be particularly detrimental if investors or stakeholders expect continuous growth​​​​. Increased Vulnerability: Relying on a limited market can increase vulnerability to market fluctuations, competitive pressures, and changes in customer preferences. This can lead to reduced market share and profitability over time​​. Missed Opportunities: Failing to explore new markets means missing out on potential revenue streams and growth opportunities that could strengthen your business's market position and financial health​​. Investor Reluctance: Investors are often wary of businesses with limited market potential. A small or shrinking TAM can make it challenging to attract investment, as it signals limited scalability and growth prospects​​​​. Related resource: Total Addressable Market: Lessons from Uber’s Initial Estimates 5 Tips For Successful TAM Expansion Expanding your TAM is a strategic move that can significantly enhance your business’s growth potential. We've compiled five practical tips to help you navigate this process effectively. These strategies will guide you through increasing brand visibility, strengthening customer relationships, exploring new markets, learning from past mistakes, and diversifying your offerings. By implementing these tips, you can successfully broaden your market reach and drive sustainable growth. 1. Boost Brand Visibility Improving brand visibility is essential for expanding your TAM. A well-recognized brand can reach a broader audience, making it easier to enter new markets and attract diverse customer segments. Increased brand visibility helps build trust and credibility, encouraging potential customers to choose your product or service over competitors. By effectively communicating your brand’s value proposition, you can create a strong market presence and drive demand across various market segments​​​​. How to Boost Brand Visibility Invest in Marketing and Advertising: Allocate resources to marketing and advertising campaigns that target both your current and potential markets. Utilize various channels, including social media, search engine marketing (SEO), and display advertising, to reach a wider audience​​​​. Digital Marketing: Leverage digital marketing strategies such as SEO, pay-per-click (PPC) advertising, and social media marketing to increase online visibility​​. Content Marketing: Create high-quality content that addresses the needs and interests of your target audience. This can include blog posts, videos, infographics, and whitepapers that provide value and position your brand as a thought leader in your industry​​. Public Relations: Engage in public relations activities to get your brand featured in industry publications, news outlets, and influential blogs. Positive media coverage can significantly enhance your brand's reputation and visibility​​. Partnerships and Collaborations: Form strategic partnerships with other brands, influencers, and industry leaders. Collaborative marketing efforts can introduce your brand to new audiences and enhance its credibility​​. Community Engagement: Participate in community events, sponsor local activities, and engage with your audience on social media platforms. Building a strong community presence can foster loyalty and attract new customers​​. Brand Consistency: Ensure consistent messaging and visual identity across all marketing channels. Consistency helps reinforce your brand's image and makes it more recognizable to consumers​​​​. 2. Strengthen Customer Relationships Building strong customer relationships is vital for expanding your TAM. Loyal customers are more likely to become repeat buyers and refer your products or services to others, increasing your market reach. Positive customer relationships can lead to higher customer retention rates, increased lifetime value, and a robust brand reputation. Satisfied customers often share their experiences, which can attract new customers and open up new market opportunities​​​​. How to Strengthen Customer Relationships Provide Excellent Customer Service: Offering outstanding customer service helps build trust and loyalty. Ensure your customer service team is well-trained, responsive, and capable of resolving issues quickly and effectively. Personalized Service: Tailor your interactions to meet individual customer needs. Use customer data to personalize your communication and offers, making customers feel valued and understood​​. Multichannel Support: Provide support across various channels, including phone, email, chat, and social media, to meet customers where they are and ensure convenience​​. Engage with Customers Regularly: Regular engagement helps maintain a connection with your customers and keeps your brand top of mind. Email Marketing: Use email campaigns to share updates, promotions, and valuable content. Personalize emails based on customer preferences and past interactions​​. Social Media Interaction: Actively engage with your audience on social media platforms. Respond to comments, participate in conversations, and show appreciation for their support​​. Collect and Act on Feedback: Regularly solicit feedback from your customers to better understand their needs and expectations. Use this feedback to improve your products, services, and overall customer experience. Surveys and Polls: Conduct surveys and polls to gather customer opinions and insights. Analyze the data to identify trends and areas for improvement​​. Customer Reviews and Testimonials: Encourage customers to leave reviews and testimonials. Address any negative feedback promptly and use it to make necessary improvements​​. Loyalty Programs and Rewards: Implement loyalty programs that reward repeat customers. Offer incentives such as discounts, exclusive access to new products, or special events to keep customers engaged and coming back. Points System: Create a points-based system where customers earn points for every purchase, which can be redeemed for rewards​​. Exclusive Offers: Provide loyal customers with exclusive offers and early access to new products or services as a token of appreciation​​. Customer Education: Educate your customers about your products and services through webinars, tutorials, and informative content. This helps them maximize the value they get from your offerings and fosters a deeper connection with your brand. Educational Content: Produce and share content that helps customers understand how to use your products effectively. This can include blog posts, how-to videos, and FAQs​​. Webinars and Workshops: Host webinars and workshops to provide in-depth knowledge and answer customer questions in real-time​​. 3. Explore New Markets Exploring new markets is a powerful strategy for expanding your TAM. By entering new geographical areas or targeting different customer segments, you can unlock additional revenue streams and reduce dependence on a single market. New markets can offer untapped demand, diverse customer bases, and opportunities for innovation. This expansion not only increases your TAM but also enhances your business’s resilience and growth potential​​​​. How to Collect and Analyze Data to Determine Suitable Markets Market Research: Conduct thorough market research to identify potential new markets. This includes studying industry reports, market trends, customer demographics, and competitive landscapes. Industry Reports and Studies: Utilize reports from reputable sources such as Gartner, Forrester, or local market research firms to gather data on market size, growth rates, and trends​​. Online Marketplaces and Databases: Explore online databases like Statista, IBISWorld, or Trade Maps to access detailed market statistics and insights​​. Customer Segmentation Analysis: Analyze your existing customer base to identify segments with similar characteristics that might be present in other markets. Look for patterns in demographics, behaviors, and preferences. Customer Data Analysis: Use data analytics tools to segment your customers based on various criteria such as age, income, location, and buying behavior​​. Surveys and Feedback: Conduct surveys or focus groups with your current customers to understand their experiences and identify potential new segments​​. Competitive Analysis: Evaluate your competitors’ presence in new markets to identify gaps and opportunities. Analyze their market strategies, strengths, and weaknesses. SWOT Analysis: Perform a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) on your competitors to understand their position in the new market​​. Competitor Benchmarking: Compare your offerings with those of your competitors in the target market. Identify unique value propositions and areas where you can differentiate​​. Feasibility Studies: Conduct feasibility studies to assess the viability of entering new markets. This includes evaluating legal, regulatory, economic, and logistical factors. Regulatory Analysis: Research local regulations, trade laws, and compliance requirements in the target market​​. Economic Analysis: Assess the economic conditions, such as GDP growth rates, disposable income levels, and market stability​​. Pilot Testing: Before fully committing to a new market, consider conducting pilot tests or trials to gauge customer interest and market response. Test Marketing: Launch a limited version of your product or service in the new market to collect feedback and measure demand​​. Focus Groups and Beta Testing: Organize focus groups or beta testing sessions with potential customers in the new market to refine your offering based on real-world feedback​​. 4. Learn From Losses Not every strategy or initiative will succeed in business, and these failures provide valuable learning opportunities. By assessing what isn’t working, you can identify weaknesses, understand the reasons behind failures, and implement corrective measures to avoid repeating the same mistakes. This process of continuous improvement is crucial for refining your strategies and achieving long-term success​​​​. How to Find What Isn’t Working and Correct These Things Conduct a Post-Mortem Analysis: After any project or campaign, hold a post-mortem meeting to review what worked and what didn’t. Collect Feedback: Gather feedback from team members involved in the project to get diverse perspectives on the issues encountered​​. Identify Key Issues: Focus on identifying the primary reasons for failure, whether related to strategy, execution, market conditions, or other factors​​. Analyze Performance Metrics: Use data analytics to evaluate the performance of your initiatives. Look for trends and anomalies that can provide insights into what went wrong. Key Performance Indicators (KPIs): Monitor KPIs such as sales figures, conversion rates, customer acquisition costs, and customer satisfaction scores to identify areas of concern​​. Root Cause Analysis: Conduct a root cause analysis to determine the underlying causes of poor performance. This helps address the issues at their source rather than just treating symptoms​​. Engage with Customers: Solicit customer feedback to understand their experiences and perceptions of your product or service. Customer Surveys: Use surveys to gather insights into customer satisfaction and identify pain points​​. Customer Interviews: Conduct in-depth interviews with customers to better understand their needs and expectations​​. Benchmark Against Competitors: Compare your performance with your competitors to identify areas where you may be falling short. Competitive Analysis: Study your competitors’ strategies and performance metrics to understand what they are doing differently and how you can improve​​. Best Practices: Adopt industry best practices that can help you enhance your operations and customer offerings​​. Implement Corrective Measures: Based on your findings, develop and implement a plan to address the identified issues and improve future performance. Strategic Adjustments: Make necessary adjustments to your strategies based on the insights gained from your analysis. This could involve changing your marketing approach, modifying your product features, or entering new markets​​. Continuous Improvement: Establish a culture of continuous improvement where regular reviews and updates are made to ensure ongoing optimization of your business processes​​. 5. Diversify Your Offerings Diversifying your product or service offerings can significantly enhance your TAM by attracting new customer segments and entering different markets. This strategy allows businesses to reduce dependency on a single product line, mitigate risks associated with market saturation, and adapt to changing market demands. By offering a broader range of products or services, businesses can cater to varied customer needs and preferences, expanding their market reach and increasing revenue opportunities​​​​. How to Diversify Your Offerings Develop New Products: Innovate and introduce new products that complement your existing offerings. This can attract a new customer base and meet different market needs. Market Research: Conduct thorough market research to identify gaps in the market and understand customer needs. Use this information to develop products that address these needs​​. Prototype Testing: Develop prototypes and conduct testing with a select group of customers to gather feedback and refine the product before a full-scale launch​​. Create New Service Packages: Bundle your services into new packages that offer added value to customers. This can make your offerings more attractive and accessible to different market segments. Customer Segmentation: Segment your customer base to understand their specific needs and preferences. Develop service packages tailored to these segments to increase relevance and appeal​​. Value-Added Services: Include additional services or features in your packages that enhance the overall value proposition, such as premium support, extended warranties, or exclusive access to content​​. Expand Into Related Markets: Identify related markets where your expertise and capabilities can be leveraged. This can help you tap into new revenue streams without straying too far from your core competencies. Adjacent Market Analysis: Analyze markets closely related to your current operations. Determine how your existing products or services can be adapted to meet the needs of these markets​​. Strategic Partnerships: Form partnerships with companies in related markets to facilitate entry and gain insights into market dynamics. Collaborations can also provide access to new customer bases and distribution channels​​. Enhance Existing Products: Continuously improve your existing products by adding new features or improving functionality. This can help retain current customers and attract new ones looking for enhanced offerings. Customer Feedback: Regularly collect and analyze customer feedback to identify areas for improvement. Use this information to guide product enhancements and ensure they meet customer expectations​​. Technology Upgrades: Invest in technology upgrades to keep your products up-to-date with the latest trends and innovations. This can help maintain a competitive edge and appeal to tech-savvy customers​​. Explore New Distribution Channels: Diversify your distribution channels to reach a broader audience. This can include online marketplaces, retail partnerships, or direct-to-consumer models. E-commerce Platforms: Expand your online presence by leveraging e-commerce platforms to reach customers beyond your geographical location​​. Omnichannel Strategy: Implement an omnichannel strategy that integrates various sales channels to provide a seamless customer experience and maximize reach​​. Get A Clear Idea Of Your Current TAM And Find Ways to Grow It With Visible’s TAM Template Understanding and expanding your TAM is crucial for business growth. Visible's TAM Template can accurately determine your current market size and identify new opportunities for expansion. This tool helps streamline your market analysis process, ensuring you make informed decisions backed by reliable data. By leveraging these insights, you can strategically target new segments, optimize resources, and ultimately drive higher revenue. Ready to take your market analysis to the next level? Download Visible’s TAM Template.

Tear sheets are an important component of the venture capital industry. If you’re new to VC, it's crucial to understand what a tear sheet is and how to create a valuable and effective one for your fund. What is a Tear Sheet? A tear sheet is a single-page summary of an individual company. A tear sheet is a critical term to understand in the venture capital world. Beyond a simple understanding of what a tear sheet is, it’s important to learn how a tear sheet is best used and how to create one. The term “tear sheet” originated from pre-internet business when S&P would produce summary sheets for public companies on one page. All of these single-page summaries could be torn out of a larger book containing all of the summary sheets. This act of tearing out the relevant page stuck around. Even though the physical act of tearing a sheet is gone, the single-page summary, the tear sheet, has withstood the test of time and is an extremely important piece of collateral for anyone working in VC to understand. A tear sheet should contain overview information about a company. This should include the total investment amount, gains/losses, sector, and a summary of company performance. Essentially, anything that will allow the reader to get a quick snapshot of the business and give them an understanding of earning potential that is possible should be included on the tear sheet. The LPs (limited partners) or investors at a VC firm are a key audience that will be viewing the tear sheet. You want to make a good impression when presenting information to LPs. Therefore, when thinking about putting together tear sheets for your portfolio companies, it’s important to make them look professional and use them to effectively communicate concise updates about your companies. Well-put-together tear sheets can go a long way in impressing LPs. View Tear Sheet examples from Visible. Tear Sheet Templates When building out tear sheets for your portfolio companies, make sure to include both metrics and qualitative data about your companies. If you’re looking for a tear sheet template (read on to learn more about tear sheet templates in Visible!) make sure to find a template that includes both of these categories. Start with metrics, or quantitative data about the company. A few metrics to consider including*: Revenue – Revenue and revenue growth over time is an easy way to understand the health status of a company. While not an accurate portrayal of the company as a whole, it gives LPs a sense of the stage of the company. FTE Headcount & New Hires – This is typically considered non-sensitive data from portfolio companies but again gives LPs an idea of the stage of the company and how they’re growing over time. It also is an indicator of how a company is using their cash. True North KPIs – Depending on the type of company, this might differ. The true north KPIs in a tear sheet template should be the key performance indicators that are guiding the business every single day. Beyond revenue goals, examples of other KPIs could be active users, a customer net promoter score, active customers, or average contract value. *Note: It’s important to maintain privacy for portfolio companies and receive permission to share information with LPs. It’s also a best practice to share the same level of detail across all companies. Another important section to include on a tear sheet is an investment overview. Some items to include are: Total Invested – It’s helpful to remind LPs about the total invested in a company and how it compares to others in the portfolio. Date of Initial Investment – This gives a sense of how long it has been since the initial investment and gives context on when to expect a return. Investment Multiple – This provides LPs with an idea of the expected return in the future. Shifting from the metrics on your tear sheet template, consider the following qualitative points to include in your tear sheet: Company Tagline – This is an easy and concise way to orient or remind an LP about what the company does. Sector – This simple static property again helps provide context to LP’s who have invested in several funds. HQ Location – Helps everyone stay on top of where the portfolio is located. Narrative Update – This section is a commentary on recent highlights from the portfolio company. As always, it’s important not to disclose sensitive information about a portfolio company. Asks – Depending on your relationship with your companies and LPs, it may be appropriate to share ‘Asks’ from portfolio companies with LPs. For example: Company A is looking to hire a Head of Engineering based in Berlin and is seeking candidate referrals. Tear Sheet Examples A great place to start when creating your portfolio tear sheets and looking for tear sheet examples is to ask your network. Talk to experienced funds in your network. If they’ve raised several funds and have close relationships with their LPs, they probably have a great idea of what LPs like to see when receiving updates about portfolio companies. You can also check out Visible’s Tear Sheet Examples here. Using Visible for Portfolio Tear Sheets Visible is an incredibly useful tool for funds to report to the LPs on a consistent basis. You can take the quantitative data and qualitative information suggested above and turn it into a template right in Visible. Check out a tear sheet example in Visible below. How Visible Automatically Builds Tear Sheets Visible is the perfect tool to build tear sheets for all your companies in just a few clicks. Visible automatically builds tear sheets by: Equipping investors to automatically collect structured data from portfolio companies on a regular basis. As an investor, you can decide what data is most relevant to request from each company. Creating tear sheet templates that automatically pull in metric data, investment data, and qualitative properties that already exist within Visible. Interested in exploring how to build Tear Sheets in Visible?

Why the Chief of Staff is Important for a Startup Startup founders and practitioners are often debating the best actions to take and decisions to make in their early-stage companies. Determining the right hires has been a major part of this conversation. The hot topic on the table lately has been around hiring the role of Chief of Staff. There is a growing conversation about whether startup leaders and founders should hire a Chief of Staff (COS), and here at Visible, we believe it is one of the most important hires you can make. A Chief of Staff is essential for your startup because their role is designed to be an extension of the c-suite’s leadership and strategy. Their role allows companies to scale faster and more strategically. Between the Board of Directors, Executive Board, stakeholders, and employees, startups have a lot of moving parts, and a Chief of Staff can be the cog in the machine that makes all those pieces work smoothly together. A Chief of Staff is the right-hand person to an executive team member, typically the CEO or COO. The COS is tasked with managing the executive’s goals, priorities, internal and external operational tasks, and special strategic projects as needed. The typical responsibilities included in a Chief of Staff role may include: Managing Executive Goals and Priorities A Chief of Staff helps determine what optimized time really looks like. For CEOs and COOs, there is plenty of work that could easily fill the day. But what work is most important for business development and moving the business forward? A Chief of Staff helps direct the decision-making and serves as a sounding board for the CEO, owning the task of keeping the executive aligned to the goals he or she set forth to push the business forward. A COS considers these executive goals and even formalizes them in a framework such as the OKR (Objective Key Results) framework. With these executive OKRs formalized, a COS helps guide the CEO/COO’s priorities day over day. Related resource: Should I Consider a Part-time Executive for My Startup? Operational Tasks With specific areas of work, including board meetings and other critical decision-making sessions or meetings on the agenda, the Chief of Staff helps manage these priorities by handling operations tasks like agenda setting and distribution, communications with teams across the startup to gather insight and updates on various company-wide priorities and progression. Not only will a Chief of Staff work on internal operational tasks like meeting prep, gathering updates, and tracking company progress towards goals, but they also tend to handle external operational tasks as well. These external operational tasks might include sending investor updates to stakeholders, serving as the point of contact to the Board of Directors representing the CEO’s office, or even working on communications and PR. Special Strategic Projects Startups move fast, and different priorities and special obligations come up for leadership out of the blue. Additionally, as your startup goes through strategic growth periods like fundraising or even acquiring smaller startups down the line, the priorities of a CEO’s time will greatly change. These strategic times are the perfect way to utilize a COS. If fundraising is going to take up a significant chunk of a CEO’s time, a Chief of Staff can step in and manage aspects of that strategic task such as deck assembly, overview materials for the potential investors, and communication with parts of the business that need to deliver information for said fundraising presentation. Chief of Staffs are typically very versatile in their skill set, with communication, strategic thinking, and analytical skill sets. This background makes them the perfect person to take on roles that require strategic thought and concise summaries but are potentially too time-constraining for a CEO to dedicate all of their energy to. With their unique mix of hard and soft skills, executive insight, and strategic position in the company, a COS is a major value-add to any startup. Our team at Visible has identified seven primary ways that a Chief of Staff can strengthen your startup. When is it Time to Hire a Chief of Staff? Determining the right moment to bring a COS into your startup is crucial for maximizing their impact. By recognizing the following indicators and acting promptly, startups can leverage the unique skills and perspectives that a Chief of Staff brings to the table, ensuring sustained growth and success. Related resource: How to Hire Your First 10 Startup Employees Here are some key indicators that it might be the right time to hire a COS: Leadership Bandwidth is Strained As your startup grows, the demands on the leadership team increase exponentially. This strain manifests as longer work hours, difficulty in prioritizing tasks, and a constant feeling of being overwhelmed. Executives may find themselves bogged down with operational details rather than focusing on strategic initiatives. A Chief of Staff can help alleviate this burden by managing critical tasks, streamlining decision-making processes, and allowing leaders to focus on high-level strategic goals. They act as a force multiplier, extending the reach and effectiveness of the leadership team. A Need for Cross-Departmental Collaboration Effective cross-departmental collaboration is essential for startups to innovate and scale. However, as the organization grows, silos can form, and communication breakdowns can occur. This can lead to inefficiencies, duplicated efforts, and missed opportunities. A Chief of Staff ensures seamless collaboration by facilitating communication between departments, aligning goals, and overseeing cross-functional projects. They help to break down silos and ensure that all parts of the organization are working towards the same objectives. Related resource: How to Build Organizational Alignment Easily Mergers, Acquisitions, or Product Launches Significant events like mergers, acquisitions, or major product launches require focused attention and meticulous coordination. These initiatives bring unique challenges such as integrating new teams, managing extensive paperwork, and aligning strategies. A Chief of Staff can manage these complex processes, ensuring that all aspects are covered and that the executive team can concentrate on high-level strategic decisions. They provide the necessary oversight and coordination to make these critical events successful. Leadership Succession Planning Succession planning is vital for maintaining continuity and stability within the leadership team. It involves identifying and developing future leaders within the organization. However, amidst the daily hustle of running a startup, this can often be neglected. A Chief of Staff plays a crucial role in leadership succession planning by mentoring potential leaders, overseeing development programs, and ensuring there is a clear plan for leadership transitions. This not only secures the future of the company but also helps in retaining top talent by providing clear career progression paths. Typical Responsibilities for a Chief of Staff A Chief of Staff in a startup wears many hats, acting as a strategic partner to the CEO or COO. Their role involves a wide range of responsibilities that help streamline operations, drive strategic initiatives, and ensure that the leadership team can focus on high-priority tasks. Below are some of the key responsibilities that a Chief of Staff typically handles, each of which will be covered in more detail in their respective sections. Managing Executive Goals and Priorities A Chief of Staff helps determine what optimized time looks like for the executive team. For CEOs and COOs, there is plenty of work that could easily fill the day. But what work is most important for business development and moving the business forward? A Chief of Staff directs the decision-making process, ensuring that the executive's time is spent on tasks that are crucial for growth. They serve as a sounding board for the CEO, aligning the executive with the company’s strategic goals and formalizing them using frameworks such as OKRs (Objectives and Key Results). This helps guide the CEO/COO’s priorities day by day. Operational Leadership The Chief of Staff manages both internal and external operational tasks, ensuring smooth day-to-day operations. This includes setting agendas for board meetings, gathering updates from various teams, and tracking progress towards company goals. They handle communications across the startup to ensure everyone is aligned with the company’s priorities. Externally, they might send investor updates, serve as a point of contact for the Board of Directors, and manage public relations tasks. By overseeing these operational details, the Chief of Staff allows the executive team to focus on more strategic issues. Strategic Projects Startups often encounter special strategic projects that require focused attention. Whether it’s fundraising, a product launch, or an acquisition, a Chief of Staff manages these projects, ensuring they align with the company’s strategic goals. They take on roles that require strategic thinking and concise summaries, handling aspects such as preparing decks for investors, assembling materials for presentations, and coordinating communication across the company. This enables the CEO to concentrate on core business functions without getting bogged down by the intricacies of these special projects. Important Skills for a Chief of Staff to Have When making the strategic hire of a Chief of Staff, startup founders need to look for specific skills that will ensure the candidate can effectively support the leadership team and drive the company forward. These skills serve as crucial filters and green flags in the interview process, guiding founders on how to frame their questions and identify the best candidate for their organization. Strategic Thinking Strategic thinking is vital for navigating the complexities of a growing startup. A Chief of Staff must be able to anticipate future challenges, identify opportunities, and develop long-term plans that align with the company's vision. By outsourcing strategic thinking to a Chief of Staff, the executive team can ensure that someone is always focused on the bigger picture, allowing them to concentrate on immediate operational needs. This skill is essential for maintaining a clear direction and ensuring the startup's long-term success. Project Management Effective project management is crucial for keeping various initiatives on track and within budget. A Chief of Staff must be adept at coordinating multiple projects, setting deadlines, and ensuring that resources are allocated efficiently. In a growing startup, where rapid execution is key, outsourcing project management to a Chief of Staff ensures that projects are completed on time and meet the company's strategic objectives. This allows the executive team to focus on higher-level strategic decisions without getting bogged down in the details of project execution. Analytical Skills Analytical skills enable a Chief of Staff to interpret data, identify trends, and make informed decisions. In a data-driven startup environment, these skills are critical for providing valuable insights that inform strategic direction and operational improvements. By outsourcing analytical tasks to a Chief of Staff, the executive team can ensure that decisions are based on solid data and analysis, reducing the risk of errors and improving overall efficiency. Communication Skills Strong communication skills are necessary for a Chief of Staff to act as a liaison between the executive team and other departments. They must be able to convey complex ideas clearly, facilitate effective meetings, and ensure that all stakeholders are on the same page. Good communication helps maintain transparency, fosters a collaborative work environment, and ensures that everyone in the organization is aligned with the company's goals. By outsourcing communication management to a Chief of Staff, the executive team can ensure that information flows smoothly and efficiently throughout the organization. Ways a Chief of Staff Can Strengthen Your Startup A Chief of Staff can significantly enhance the effectiveness and efficiency of a startup. By taking on critical tasks and responsibilities, they enable the executive team to focus on strategic goals and high-priority items. Here are some of the ways a Chief of Staff can strengthen your startup: Focus on Priority Items The day-to-day life of a CEO or COO can be extremely hectic, with numerous decisions and tasks competing for their attention. A Chief of Staff helps manage these priorities by filtering out less critical tasks and directing the executive’s time towards the most strategic decisions that align with the company's OKRs (Objectives and Key Results). This ensures that the leadership focuses on what truly drives the business forward while the Chief of Staff handles smaller issues and routine decision-making. Facilitate Smooth Information Sharing Effective communication is crucial for the smooth operation of a startup. A Chief of Staff acts as a central point for gathering and disseminating information across the organization. They collect updates from various departments, distill the most important points, and present a contextualized executive summary to the CEO. This process ensures that the CEO receives all the necessary information without being overwhelmed by details, and that communication flows smoothly from the CEO to the rest of the company. Inform Strategy and Decision-Making A Chief of Staff serves as a valuable resource for keeping the executive team connected to the various happenings across departments. By providing an executive summary of company-wide updates, a Chief of Staff helps the leadership team make informed strategic decisions more quickly. They ensure that all relevant information is considered, facilitating better and faster decision-making processes. Maximize Time While You Scale As a startup scales, the demands on the executive team’s time increase. A Chief of Staff helps maximize this time by prioritizing tasks and focusing on critical projects. They handle routine and operational tasks, allowing the CEO to dedicate more time to deep-think projects and strategic initiatives. This ensures that the leadership’s time is used efficiently, even as the company grows and evolves. Tackle Special Projects Special projects, such as fundraising rounds, product launches, or industry presentations, require focused attention and dedicated resources. A Chief of Staff is perfectly positioned to spearhead these projects, managing aspects such as preparing investor decks, assembling materials for presentations, and coordinating communication across the company. This allows the CEO to stay focused on daily priorities while still ensuring that special projects are executed effectively. Provide Oversight and Perspective Startups can often become echo chambers where new perspectives are hard to come by. A Chief of Staff, especially one with experience from other startups, brings a fresh viewpoint to the c-suite. They provide oversight and serve as a sounding board for new ideas and strategies, helping to ensure that the company stays innovative and adaptable. Push the Business Forward Ultimately, a Chief of Staff is a strategic player in moving the business forward. They streamline operations, manage strategic projects, and ensure effective communication, all of which contribute to the company’s growth. By freeing up the executive team to focus on high-level strategic goals, a Chief of Staff helps take a startup from good to great and potentially to unicorn status. Chief of Staff vs Executive Assistant Understanding the difference between a COS and an Executive Assistant (EA) is crucial for startup founders to ensure they make the right hire at the right time. While both roles support the executive team, they do so in different ways and with distinct focuses. Chief of Staff A Chief of Staff is a strategic partner to the executive team, particularly the CEO or COO. Their responsibilities are broad and focus on aligning the company’s strategic goals with daily operations. Here are some key aspects of the COS role: Strategic Focus: The COS works on high-level strategic initiatives, ensuring that the executive team’s vision and goals are implemented across the organization. Project Management: They handle complex projects that span multiple departments, such as mergers, acquisitions, product launches, and fundraising efforts. Decision-Making Support: The COS provides critical insights and data analysis to support executive decision-making, helping to inform strategy and operational improvements. Cross-Departmental Collaboration: They facilitate communication and collaboration between different departments to ensure everyone is aligned and working towards common goals. Leadership Development: The COS often plays a role in leadership succession planning and mentoring potential future leaders within the organization. Executive Assistant An Executive Assistant, on the other hand, focuses on optimizing the executive’s daily schedule and administrative tasks. Here are some key aspects of the EA role: Administrative Focus: The EA manages the executive’s calendar, schedules meetings, handles correspondence, and organizes travel arrangements. Time Management: They ensure that the executive’s time is used efficiently by prioritizing meetings and tasks, allowing the executive to focus on their most important responsibilities. Task Coordination: The EA handles a variety of administrative tasks that help keep the executive’s day running smoothly, from booking appointments to preparing documents. Support Role: They provide general support to the executive, ensuring that they have everything they need to perform their duties effectively. Routine Operations: The EA is instrumental in managing routine operational tasks, allowing the executive to concentrate on more strategic issues. Key Differences Scope of Responsibilities: The COS has a broader, more strategic scope, focusing on aligning and implementing the company’s long-term goals. The EA’s scope is narrower, concentrating on the day-to-day administrative support of the executive. Strategic vs. Administrative: The COS is involved in strategic decision-making and high-level project management, while the EA handles administrative and logistical tasks. Cross-Departmental Impact: The COS often works across departments to facilitate collaboration and ensure alignment with company goals. The EA typically works closely with the executive and less so with other departments. Long-Term vs. Short-Term Focus: The COS is focused on long-term strategic initiatives and projects that drive the company forward. The EA is focused on the immediate, short-term needs of the executive. Making the Right Choice For startup founders, deciding between hiring a Chief of Staff and an Executive Assistant depends on the company’s current needs and stage of growth: If the company needs high-level strategic support, project management for complex initiatives, and cross-departmental coordination, hiring a Chief of Staff is the right choice. If the primary need is managing the executive’s schedule, handling administrative tasks, and ensuring day-to-day operations run smoothly, then an Executive Assistant is the appropriate hire. Equipping a Chief of Staff for Success at a Startup To ensure a COS is successful at your startup, it's crucial to clearly define their role and responsibilities from the outset. This includes creating a detailed job description that outlines specific tasks and expectations. Additionally, providing a comprehensive onboarding process with clear goals and KPIs will help the COS integrate smoothly and start contributing effectively. Regular check-ins and feedback sessions will also ensure they are aligned with the company’s strategic goals and can adjust to any evolving needs. Equipping your COS with the right tools and resources, fostering open communication, and maintaining a supportive environment will enable them to execute their duties effectively. This preparation ensures that the COS can focus on driving strategic initiatives and managing critical projects, ultimately contributing to the startup’s growth and success. How Visible Can Help Visible offers a range of tools and resources designed to support Chief of Staffs in their roles, making it easier to streamline executive and investor communications. With features that facilitate data tracking, reporting, and stakeholder updates, Visible ensures that your Chief of Staff can efficiently manage information flow and keep everyone aligned with the company’s strategic objectives. By leveraging Visible's platform, startups can enhance their operational efficiency, improve decision-making processes, and ultimately drive growth. For more information about how Visible helps Chiefs of Staff streamline their executive and investor communications, learn more here.

The creator economy is rapidly transforming the global economy, driving billions of dollars in value as it reshapes how content is created, distributed, and monetized. At the intersection of technology and creativity, startups within the creator economy are pioneering innovative platforms and tools that empower individuals to turn their passions into professions. This rapidly growing sector not only offers vast opportunities for creators but also attracts significant attention and investment from venture capitalists keen to support the next wave of digital innovation. What is the creator economy? In today's digital age, the "creator" embodies a broad and dynamic role, reflecting the vast opportunities for individual creativity and entrepreneurship online. A creator is anyone who produces content across various platforms to engage, entertain, or educate an audience, leveraging digital tools and social media to monetize their skills and passions. This definition spans from writers, artists, and musicians to influencers, vloggers, and podcasters, among others, who utilize platforms like YouTube, TikTok, Instagram, and Twitch to share their work and generate revenue through ad shares, sponsorships, merchandise sales, and more​​​​​​. The creator economy has democratized content production and distribution, enabling individuals to turn their passions into professions without the traditional barriers of entry like access to large capital or institutional gatekeepers. With just a smartphone and internet access, creators can reach a global audience, exemplified by individuals who have gained fame and financial success through platforms like TikTok and YouTube with minimal initial investment​​. In the evolving landscape of the creator economy, founders, content creators, and VCs are witnessing a dynamic shift towards diversified revenue streams beyond traditional brand partnerships. The spotlight has increasingly turned towards direct audience monetization strategies, including digital product sales, affiliate marketing, ad revenues, and brand deals. This shift underscores the importance for stakeholders in the creator economy to innovate and adapt. For creators, it's about embracing new technologies and platforms to engage with audiences and monetize their content effectively. For founders and VCs, the emphasis is on investing in and developing tools that support creators in these endeavors, recognizing the value of direct audience relationships and the growing independence of creators from traditional advertising models. It's not just about creating content but also about understanding the ecosystem's business models, audience engagement strategies, and monetization mechanisms. As the creator economy continues to evolve, staying informed and adaptable will be key to leveraging its potential for individual growth and investment opportunities. Related Resource: 18 Pitch Deck Examples for Any Startup Creator Economy Areas of Investment VCs are investing in tools to help influencers operate and monetize. Here are some examples of the areas of focus that we gathered from SignalFire’s Creator Economy Market Map. Related Resource: 14 Gaming and Esports Investors You Should Know Content Creation Tools Video Photography / Graphic Design Motion Photos Music Podcast Influencer Marketing Specialized Influencer Marketing Agencies. Influencer Marketing Platforms and Marketplaces: CRM Tools Patronage Platforms Ad Hoc Project-Based Funding Kickstarter, Indiegogo, and GoFundMe Subscription-Based Funding Patreon Tip Jar Concept Ko-fi and Buy Me a Coffee Other Opportunities Community Engagement Tools Finance Management Tools Key Insights for Founders in the Creator Economy Space We pulled some key insights from ConverKits State of the Creator Economy 2024 Report: Shift in Preferred Content Formats Written Content Dominates: Contrary to previous predictions, written content such as emails, newsletters, articles, blog posts, and books has emerged as the most popular and lucrative form of content. In 2023, 58% of creators produced emails or newsletters, and 51% focused on articles, blog posts, or books​​​​. Decline in Short-Form Videos: The percentage of creators making short-form videos decreased significantly, dropping from 45% in 2022 to 23% in 2023. This trend suggests a pivot away from platforms like TikTok towards more substantial, written content​​​​. Gender Pay Gap Progress Closing Income Disparity: The creator economy is witnessing a positive trend towards earning equality. The percentage of female creators earning six figures or more has increased, reflecting a closing gender pay gap​​. Notable Female Creators: Examples of successful female creators include Bonnie Christine, Nisha Vora, XayLi Barclay, and Chaitra Radhakrishna, who have built substantial businesses and incomes in the creator space​​​​. Transition from Traditional Jobs Leaving 9-5 Jobs: A significant number of creators are leaving traditional salaried jobs to focus on their creator businesses. Economic uncertainty and layoffs have spurred this shift, with creators seeking more control over their income and career​​. Income Expectations and Speed: Many creators expect to earn more from their creator businesses in 2024 compared to 2023, with full-time creators often starting to make money within their first year of operation​​​​. Diverse Income Streams Multiple Revenue Sources: Full-time creators typically have six or more income streams, compared to hobbyists and part-timers who have fewer. This diversification is key to their financial stability and growth​​​​. Top Income Sources: Professional services (36%), digital products (18%), advertising (11%), and affiliate marketing/links (10%) are among the top ways creators earn their income​​. Generational Differences in the Creator Economy Cultural Differences Between Generations: Generational differences are evident in the creator space. Gen-Z, known as the side-hustle generation, accounts for the largest share of hobbyists and part-time creators. While 87% of Gen-Z creators earn under $10,000 a year, there are positive trends for this group. Initially, around 3% of Gen-Z respondents were full-time creators; now, about a quarter of all Gen-Z creators make a full-time living from their business. Actionable Insights for Startup Founders Focus on Written Content: Prioritize developing solutions for written content, as this format has proven to be both popular and profitable for creators. Facilitate Career Transitions: Provide resources and guidance for creators looking to transition from traditional jobs to full-time creator roles. Diverse Revenue Models: Help creators develop multiple income streams to enhance their financial resilience and growth potential. Top 8 VCs Actively Investing in the Creator Economy Venture capitalists play a crucial role in fueling the growth of the creator economy by providing the necessary capital and resources for startups to thrive. Here are eight leading VCs that are making significant investments in this sector: 1. SignalFire Location: San Francisco, California, United States About: SignalFire is a venture capital firm that invests in seed-stage companies and breakout companies. Investment Stages: Seed, Series A, Series B Popular Investments: OneSignal Ledger Investing Join 2. Antler About: Antler is a global startup generator and early-stage VC that is building the next big wave of tech. With the mission to turn exceptional individuals into great founders, Antler aims to create thousands of companies globally. Thesis: We identify and invest in exceptional people Investment Stages: Pre-Seed, Seed Popular Investments: Mast Technologies Upflowy Appboxxo 3. Harlem Capital Location: New York, United States About: Harlem Capital is an early-stage venture firm that invests in post-revenue tech-enabled startups, focused on minority and women founders. Thesis: Women or POC founders (no deep tech, bio, crypto, hardware) Investment Stages: Seed, Series A, Series B, Growth Popular Investments: Lami Gander The House of LR&C 4. Night Ventures Location: Texas, United States Thesis: Our LPs are 50+ of the top creators in the world across YouTube, TikTok, Twitch and elsewhere. Together, we specialize in influence – understanding what’s popular, what’s trending and how to acquire more customers/fans of your product. Popular Investments: Moonpay Pearpop Beacons 5. Slow Ventures Location: San Francisco, California, United States About: Slow Ventures invests in companies central to the technology industry and those on the edges of science, society, and culture. Thesis: Slow Ventures invests in companies central to the technology industry and those on the edges of science, society, and culture. Investment Stages: Seed, Series A Popular Investments: Juice Stem Human 6. Behind Genius Ventures (BGV) Location: Los Angeles, California, United States About: Behind Genius Ventures invests in pre-seed/seed stage companies centered around product-led growth. Co-Founded by two Gen Z investors: Joshua Schlisserman and Paige Doherty. Investment Stages: Pre-Seed, Seed Popular Investments: Decaf Impulse Maca Payments 7. Crush Ventures Location: LA and NYC About: We formed Crush Ventures to focus on early stage investing at the intersection of media, culture, and commerce. To founders, we bring to bear our capital, operating expertise and powerful relationship network earned from two decades spent building Crush Music into a global powerhouse. Thesis: We invest in founders building the future of how talent will discover, engage, and monetize fans. Investment Stages: Pre-Seed, Seed RPopular Investments: Beacons Create O/S Splice 8. Freestyle Capital Location: California, United States About: Freestyle is an early-stage VC with $565M+ AUM & investments in 150+ tech co’s like Airtable, Intercom, Patreon, BetterUp and Snapdocs. Thesis: We are high-conviction, low-volume investors and invest in only 10-12 companies each year. This gives us the freedom to work closely with founders, and holistically support our companies. We typically lead Seed rounds with a $1.5M — $3M check. We make decisions efficiently and are 100% transparent with you along the way. We invest in founders building soon-to-be massive tech companies across many verticals. Investment Stages: Pre-Seed, Seed Popular Investments: Spot Change Grain 9. SevenSevenSix Location: They are a remote-first company with locations in Miami and Los Angeles About: Seven Seven Six is a venture capital firm founded by Alexis Ohanian, co-founder of Reddit, with a mission to invest in bold and ambitious startups that have the potential to significantly impact their industries and communities. Established in 2020, Seven Seven Six focuses on early-stage investments, providing not only capital but also strategic guidance and support to help founders scale their businesses effectively. Thesis: The firm has a strong focus on the creator economy, supporting platforms and tools that enable creators to monetize their work and engage with their audiences. Additionally, Seven Seven Six invests in sectors such as consumer technology, blockchain, and fintech, always looking for disruptive innovations that can redefine industries. Investment Stages: Seed Popular Investments: Dispo Pearpop Simulate 10. Creandum Location: Stockholm, Berlin, and San Francisco About: Creandum is a leading European early-stage venture capital firm investing in innovative and fast-growing technology companies. Thesis: We are a venture capital advisory firm powering innovation from Stockholm, Berlin, and San Francisco. Investment Stages: Pre-Seed, Seed, Series A, Series B Popular Investments: Depop Kahoot! Spotify 11. R/GA Ventures Location: New York, USA About: R/GA Ventures is a venture capital firm that partners with startups to build and scale their businesses. It leverages the resources of R/GA, a globally recognized innovation consultancy, to provide startups with strategic guidance, mentorship, and access to a vast network of industry experts. R/GA Ventures focuses on fostering innovation in various industries by helping startups develop transformative products and services. Thesis: Focusing on companies that are at the intersection of technology, design, and digital innovation. Their thesis revolves around backing startups that leverage technology to disrupt traditional industries and create new market opportunities. R/GA Ventures aims to support startups that are developing cutting-edge solutions in areas such as AI, IoT, digital media, and the creator economy. Investment Stages: Early-stage startups, including Seed and Series A rounds Popular Investments: Cameo Teachable SuperPhone Alternative Funding for Creator Economy Founders Along with VC, accelerators and incubators, you can consider Gumroad’s new innovative funding model. Gumroad’s Creator Investing Play: Gumroad, an ecommerce platform helping creators sell digital products, offers a unique funding alternative to traditional venture capital. Instead of pursuing equity, Gumroad buys a 10% stake in creator-led businesses, providing checks ranging from $100K to $500K directly to creators. This approach allows creators to maintain full control over their business while Gumroad receives regular dividends on the business’s earnings​​. Benefits of Gumroad’s Model: This funding model aligns with creators' needs and goals, emphasizing sustainability and revenue growth over exits or liquidity events. Sahil Lavingia, Gumroad’s founder, highlights that creators have a competitive advantage due to their deep audience connection, quick adaptability, and authenticity as founders and business leaders​​. Addressing Growth Challenges: Despite the growth of creator-led startups, there remains a lack of clear blueprints for scaling while maintaining brand integrity. Lavingia points out that aspects like hiring teams, managing expenses, and balancing growth with creativity are still uncharted territory. However, initiatives like Gumroad's funding model aim to address these challenges and provide a path forward for creators​​​​. Top 8 Content Creation and Creator Economy Startups As venture capital continues to flow into the creator economy, numerous startups have emerged as leaders in facilitating content creation, distribution, and monetization. These companies are at the forefront of innovation, providing creators with the tools and platforms they need to succeed in a digital-first world. Related Resource: 7 Startup Growth Strategies 1. Caffeine Caffeine is a live-streaming platform that focuses on gaming, sports, and entertainment content. Founded by Ben Keighran and Sam Roberts, it went live in early 2018 and has quickly gained traction among users and creators alike. Caffeine distinguishes itself by emphasizing interactive and real-time engagement between broadcasters and their audiences, aiming to create a more dynamic and engaging experience than traditional broadcasting platforms. Location: Redwood City, California. Funding Rounds and Amount Raised: Caffeine has successfully raised significant funds through various rounds. In September 2018, it secured a $100 million investment from 21st Century Fox. As of 2019, the company had raised $146 million from investors across three rounds, including prominent names like 21st Century Fox, Andreessen Horowitz, and Greylock Partners​​. 2. Spotter Spotter is an innovative startup that has carved a unique niche within the creator economy, focusing on YouTube content creators. It offers a financial model that provides creators with upfront cash for licensing their existing or upcoming content. This approach is designed to assist creators in scaling their brands, funding ambitious projects, and growing their businesses more efficiently. Spotter’s model is likened to a venture capital investment but for the digital content creation space, aiming to secure a stake in the future success of these creators by investing in their content libraries​​​​​​. Location: Los Angeles, California. Funding Rounds and Amount Raised: A significant milestone was a $200 million Series D funding round led by SoftBank Vision Fund 2, part of a combined $755 million raised across this and other undisclosed rounds. This influx of capital has elevated Spotter's valuation to $1.7 billion. The company plans to invest $1 billion directly into its YouTuber partners to assist in their business growth. Spotter's total funding has reached $240.6 million, underscoring its robust financial backing and confidence from investors​​​​​​. 3. Jellysmack Jellysmack leverages machine-learning technology and data analytics to create and optimize video content for social media platforms. Founded in 2016, it aims to identify social video trends, optimize video performance, and uncover niche audience segments to build vibrant communities around content creators. Jellysmack is known for its innovative approach to the creator economy, helping creators amplify their reach and monetization across multiple platforms​​. Location: New York with additional offices in Los Angeles, Corte, Corsica, Paris, and London​​. Funding Rounds and Amount Raised: Jellysmack has secured $16 million in total funding. 4. Passionfroot Passionfroot provides a unified no-code platform for creators, focusing on simplifying their business operations. It offers tools for storefront management, CRM, collaborations, and cash flow, targeting younger millennial & GenZ creators and small media brands, particularly those involved in B2B monetization like sponsorships and ad placements. Location: Berlin, Germany. Funding Rounds and Amount Raised: Raised €3.4 million in a pre-seed funding round. 5. Stir Stir is a platform designed to help digital creators manage their revenue streams, analytics, and collaborations. It facilitates the sharing of funds among collaborators, aiming to streamline the financial aspects of content creation. The startup has introduced tools like Collectives for shared financial management among creators. Location: San Francisco, California. Funding Rounds and Amount Raised: Stir raised $4 million in a seed funding round with contributions from notable investors including Casey Neistat, YouTube co-founder Chad Hurley, and others​​. 6. Kajabi Kajabi, founded in 2010 by Kenny Rueter, is a SaaS platform designed for creators and entrepreneurs to create, market, and sell digital content. It has quickly risen to prominence as a tech unicorn, valued at $2 billion. The platform supports creators across various niches, offering tools for online courses, membership sites, and more, emphasizing its role in the booming creator economy. With a mission to empower digital entrepreneurs, Kajabi has facilitated over $3 billion in sales, serving thousands of users worldwide. Location: Irvine, California. Funding Rounds and Amount Raised: In November 2019, Kajabi received its first outside investment from Spectrum Equity Partners. A significant funding milestone was reached in May 2021 with a $550 million round led by Tiger Global, along with TPG Capital, Tidemark Capital, Owl Rock, Meritech Capital, and Spectrum Equity, catapulting Kajabi to a $2 billion valuation. 7. Linktree Linktree, launched in 2016 by co-founders Alex Zaccaria, Anthony Zaccaria, and Nick Humphreys, revolutionized the way individuals and businesses manage their online presence. Conceived as a solution to the limited link options on social media platforms, Linktree enables users to share multiple content links through one bio link, facilitating a centralized online presence. This technology startup quickly became a staple tool for influencers, creators, publishers, and brands, seeking to streamline their digital footprint. The platform's user-friendly interface and versatile application across various social media sites have propelled its growth, making it a critical tool in the digital arsenal of the modern internet user. Location: Melbourne, Australia, with additional operations in Darlinghurst, NSW, Australia​​. Funding Rounds and Amount Raised: Linktree has raised over a series of 4 rounds with a total of $176.2 million invested. 8. Sagespot SageSpot, established in 2020, emerges as a transformative player within the creator economy, offering a subscription-based social media platform. This innovative platform distinguishes itself by empowering creators to foster interest-based communities, enabling a direct monetization path through engaged and dedicated followers. By focusing on this model, SageSpot aims to rectify the monetization challenges creators face on legacy platforms, providing a more sustainable and creator-focused alternative for monetizing content and personal brands. The platform's focus on subscription-based models offers a promising alternative to ad-revenue dependency, potentially leading to a more sustainable and fulfilling creator-follower relationship. Location: New York. Funding Rounds and Amount Raised: $5.6 million led by Khosla Ventures. Related Resource: 7 Essential Business Startup Resources Looking for Funding? Visible Can Help- Start Your Next Round with Visible We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey. Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VC’s and accelerators who are looking to invest in companies like you. Check out all our investors here and filter as needed. After learning more about them with the profile information and resources given you can reach out to them with a tailored email. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors. After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here and check out Visibles Fundraising page: https://visible.vc/fundraising Related resources: Valuing Startups: 10 Popular Methods Seed Funding for Startups 101: A Complete Guide The Ultimate Guide to Startup Funding Stages

Imagine stepping into a boardroom, facing a panel of seasoned investors, knowing you have a secret weapon to turn their interest into commitment. A compelling seed round pitch deck can do just that, transforming an idea into an irresistible investment opportunity. With the right slides, you can captivate investors, clearly communicate your vision, and demonstrate why your startup is poised for success. Investors will want to see various assets and data points throughout the fundraising seed stage. One thing that founders can expect most, if not all, investors to see is a seed round pitch deck. This guide will walk you through creating a pitch deck that stands out and effectively wins over investors. What is a Seed Round Pitch Deck? A seed round pitch deck is a carefully crafted presentation that communicates your startup's vision, business plan, metrics, and other critical insights to potential investors. It is designed to provide a comprehensive overview of your business, highlighting its potential and viability in the market. The primary goal of a pitch deck is to engage investors, moving them further down your fundraising funnel and increasing your chances of securing the capital you need to grow. By effectively presenting your story, team, product, market opportunity, and financial projections, you can make a compelling case for why investors should support your startup. Related resource: How To Build a Pitch Deck, Step by Step What Investors Want To See in Seed Round Pitch Decks Companies raising funds for the first time need a seed round pitch deck to share their story with investors effectively. In a seed round, it’s common to raise funds from angel investors, startup accelerators, and early-stage VCs. With the growing number of pre-seed and seed-stage investors, venture capital has also become more accessible for early-stage startups. Regardless of the investor type, there are certain key elements that every early-stage startup should include in their pitch deck. Founders should tailor their pitches based on their audience, but successful seed round pitches generally include a succinct and exciting story, an exceptional team, product potential or traction, and a clear growth plan. Related resource: Tips for Creating an Investor Pitch Deck A Succinct but Exciting Story Your pitch deck needs a compelling narrative outlining your vision and future plans. Since your company is still developing, it's crucial to inspire and excite your audience about your mission and potential. Make your story engaging and relatable, showing why your company’s purpose is important and why you are the right team to execute this vision. The goal is to make investors want to be part of your journey and invest in not just your company, but also in your vision and the impact it aims to create. An Exceptional Team Having a top-notch team is one of the most critical factors for many venture capitalists. In this slide, you need to establish credibility, demonstrate expertise, and build trust in both your idea and your company. Highlight the relevant experience, unique skills, and past successes of your team members to show why they are the best people to execute this vision. This builds confidence in investors that your team can navigate challenges and drive the company to success. Product Potential or Traction If you have achieved product-market fit, gathered user/customer metrics, or generated revenue, make sure to share these as proof of concept. Highlight any key metrics that demonstrate traction, such as user growth, engagement rates, or revenue figures. This evidence helps build investor confidence in your product’s potential and market demand. However, if you’re in the early stages and have limited or no data, be transparent about it. Investors understand that early-stage startups might not have extensive metrics yet. Focus on showcasing your product’s potential, the problem it solves, and the market opportunity. Use qualitative data, pilot program results, or early user feedback to support your claims. A Growth Plan Even if your product is still in development or you haven't finalized your business model, it’s essential to demonstrate a thorough understanding of your market, customers, and scalability. Present a well-thought-out growth plan that highlights your strategy for reaching and expanding your customer base, penetrating the market, and scaling your business. Your growth plan should be data-driven to lend credibility to your projections. Use market research, customer insights, and relevant data points to support your strategy. This approach shows investors that you have a realistic and actionable plan for growth. For more detailed guidance on modeling your company's future, check out our guide, “Building A Startup Financial Model That Works.” Our 10-Step Guide to Building a Seed Round Pitch Deck (+ A Free Template) Seed-stage startups should approach their first pitch deck differently than they would in later rounds because they typically won’t have extensive stats or user data to rely on. This is why storytelling is crucial. Focus on elements such as the team, competitive advantages, and the market opportunity to help investors understand the future value of your company. These elements can paint a compelling picture of your startup’s potential, even if there isn’t much data available at this stage. For a more detailed breakdown of successful pitch deck examples check out Visible’s guide here and download our free pitch deck template here. Step One: Create The Cover/Title Slide Your cover slide is the first impression investors will have of your pitch, so make it count. It should be visually appealing and include your startup’s name, logo, and a tagline that encapsulates your mission. This slide sets the tone for the rest of your presentation and should immediately grab attention. An example of a successful title slide includes: Startup Name: Clearly displayed at the top Logo: Positioned near the name for brand recognition Tagline: A short, compelling statement about your mission or value proposition Visuals: High-quality images or graphics that align with your brand Create your own by downloading our free pitch deck template here. Step Two: Introduce The Team The team is one of the most critical factors for seed investors when considering a seed round investment. A strong team is often seen as a key to a company's success. Highlight how each team member brings a unique and beneficial aspect to the company, including their roles, relevant experience, and contributions to the company’s mission, the problem being solved, or competitive advantage. This establishes a solid foundation for the rest of the presentation, allowing investors to understand who they are engaging with and lending credibility to your pitch. An example of a successful team slide includes: Photos: High-quality images of each team member Names and Titles: Clearly displayed for each person Brief Bios: Highlighting relevant experience and expertise Unique Contributions: How each member's skills and background benefit the startup Create your own by downloading our free pitch deck template here. Step Three: Diagnose The Problem Clearly articulate the problem your startup aims to solve. Help investors understand the significance of the issue and its impact on the world or specific groups of people. Explain why this problem needs to be addressed and why existing solutions are inadequate or nonexistent. Your goal is to make the problem relatable and compelling, showing that there is a genuine need for a solution. This sets the stage for introducing your product as the ideal answer. An example of a successful problem slide includes: Clear Problem Statement: Concisely describe the problem. Impact: Explain how the problem affects individuals or industries. Data and Examples: Use statistics or real-world examples to illustrate the problem's significance. Create your own by downloading our free pitch deck template here. Step Four: Propose The Solution State that the right solution to this problem hasn't been solved yet or can be significantly improved upon. Explain how your startup has innovatively developed a way to address the problem, why this solution will benefit customers, and why your company is uniquely positioned to execute it. This is essentially your elevator pitch and should be short, compelling, and to the point—aim for around 30 seconds. An example of a successful solution slide includes: Clear Solution Statement: Concisely describe your innovative solution. Customer Benefits: Highlight how your solution benefits customers and addresses their needs. Unique Positioning: Explain why your company is best suited to deliver this solution. Create your own by downloading our free pitch deck template here. Step Five: Prove Your Product Has Traction Use this slide to demonstrate the traction your product has gained so far. If you haven't collected any metrics yet, focus on showcasing your product's development and any qualitative feedback you've received. However, if you have data and are tracking key performance indicators (KPIs), this is where you should highlight them. Metrics that prove traction could include user growth, revenue, engagement rates, customer testimonials, or any other relevant data points that validate your product's market acceptance and potential. With Visible, you can track and automate your startup’s key metrics and build beautiful charts and dashboards for your seed-round pitches. This can help you present your data in a clear and visually appealing way. An example of a successful traction slide includes: Key Metrics: Display relevant data such as user numbers, revenue, or other KPIs. Growth Charts: Use charts and graphs to visualize your growth. Qualitative Feedback: Include customer testimonials or quotes if quantitative data is limited. Create your own by downloading our free pitch deck template here. Step Six: Define Market Size and Opportunity In this section, include all relevant information about the opportunity you’re aiming to seize and the size of that market. It’s crucial to highlight why this market is attractive and how your startup plans to dominate it. Investors often appreciate a strategy that starts with targeting a niche market before expanding. They value the potential for growth and scalability over the initial market size. “Sequencing markets correctly is underrated, and it takes discipline to expand gradually. The most successful companies make the core progression—to first dominate a specific niche and then scale to adjacent markets—a part of their founding narrative.” – Peter Thiel, Zero to One To effectively define your market size and opportunity, consider the following: Total Addressable Market (TAM): Estimate the total market demand for your product or service. This is the broadest measure of your market opportunity. Serviceable Available Market (SAM): Narrow down the TAM to the portion of the market you can realistically target. Serviceable Obtainable Market (SOM): Further narrow the SAM to the market segment you can capture in the short term. Check out our detailed guide on How to Model Total Addressable Market (Template Included). The guide covers: What is Total Addressable Market (TAM)? How to Calculate TAM The Free Visible Total Addressable Market Template and Evaluation Model Where Does Your Total Addressable Market Start (and End)? Why Knowing Your Total Addressable Market is Important Building Your Total Addressable Market Model An example of a successful slide includes: Market Segmentation: Breakdown of TAM, SAM, and SOM. Visual Data: Charts or graphs to illustrate market size and growth potential. Strategic Insights: Explanation of how you will capture and expand your market share. Create your own by downloading our free pitch deck template here. Step Seven: Conduct a Competition Analysis Having competitors in your space doesn’t mean your business idea isn’t viable; in fact, it can validate the need for your solution. However, you must clearly understand and articulate what sets you apart from the competition. Investors and customers need to know why your product or service is the better choice. In your competition analysis slide, focus on the following elements: Identify Competitors: List your main competitors and provide a brief overview of each. Highlight Differentiators: Clearly state your unique value proposition and competitive advantages. Explain why your solution is superior or more effective than existing options. Market Positioning: Use a visual representation, such as a competitive matrix, to show where you stand in relation to your competitors. Highlight the areas where you excel. By presenting a well-thought-out competition analysis, you demonstrate to investors that you have a strategic understanding of the market and a plan to capture and defend your market share. An example of a successful competition analysis slide includes: Competitor Overview: Brief descriptions of key competitors. Competitive Matrix: A visual chart comparing features, pricing, market share, etc. Unique Value Proposition: Clear articulation of what makes your product unique and better. Create your own by downloading our free pitch deck template here. Step Eight: Prove Profitability With Financials/Metrics In this section, you need to provide evidence of your startup's potential profitability and share projections for the next 3-4 years. At the seed stage, this information will be more high-level and based on assumptions, but it's crucial to include revenue and user/customer projections to give investors a sense of your financial outlook. Here's what to include in your financials/metrics slide: Revenue Projections: Outline your expected revenue growth over the next few years. Use realistic assumptions based on your market research and business model. User/Customer Projections: Estimate the growth in your user or customer base. This helps demonstrate the potential demand for your product. Key Metrics: Highlight other important financial metrics such as customer acquisition cost (CAC), lifetime value (LTV), gross margin, and burn rate. These metrics provide insight into the financial health and efficiency of your business. Break-Even Analysis: Show when you expect to become profitable. This gives investors a timeline for when they can expect returns on their investment. An example of a successful financials/metrics slide includes: Revenue Graph: Visual representation of projected revenue growth. User Growth Chart: Projected increase in users or customers. Financial Metrics: Key metrics displayed in an easy-to-understand format. Break-Even Point: Highlight the timeline for reaching profitability. Create your own by downloading our free pitch deck template here. Step Nine: Answer The Question: “Why Now? Why Me?” This section is another opportunity to pitch yourself, your team’s expertise, and your company's unique advantages. Emphasize what makes your team and solution the perfect combination for success. Here's how to craft a compelling “Why Now? Why Me?” slide: Team Expertise and Competitive Advantage Team Expertise: Reiterate the strengths and relevant experience of your team. Highlight specific achievements and skills that make your team uniquely qualified to solve the problem and succeed in the market. Unique Value Proposition: Clearly articulate your “secret sauce” — what makes your product or service unique and better than existing solutions. Explain your competitive advantage and strategy for maintaining it. Timing and Market Entry Timing is a crucial factor that can significantly influence the success of a startup. Here's how to justify your market entry: Market Conditions: Explain any trends, technological advancements, or changes in consumer behavior that make this the ideal time for your product. Use data and market research to support your points. Early Entry: If you’re entering the market early, highlight the benefits of being a first-mover. Emphasize how this allows you to establish a strong brand presence and capture market share before competitors. Late Entry: If you’re entering a more mature market, detail your competitive advantage. Explain how you can leverage existing market data, customer feedback, and technological advancements to create a superior product. Discuss how you can avoid the pitfalls encountered by earlier entrants and use their learnings to your advantage. Every potential disadvantage can be turned into an advantage with the right strategy. You can convince investors that your startup is poised for success by addressing timing and your competitive edge. An example of a successful slide includes: Team Highlights: Key achievements and relevant experience. Competitive Advantage: Clear articulation of your unique value proposition. Market Timing: Justification for entering the market now, with supporting data. Create your own by downloading our free pitch deck template here. Step Ten: Wrap Things Up With The Ask Slide The ask can often be an underutilized section in investor updates, and founders might not realize it’s also essential to include in a pitch deck. Investors should not only be seen as capital resources but also as sources of knowledge and connections. Clearly stating your ask shows investors where you need help and allows them (and you) to determine if they are in a position to provide that support. When they decide to invest, it is in their best interest to contribute to the success of your business in any way they can. Key Elements of a Successful Ask Slide Funding Request: Clearly state the amount of capital you are seeking. Provide a breakdown of how you plan to use the funds, such as product development, marketing, hiring, etc. Additional Support: Mention other forms of support you are looking for, such as mentorship, industry connections, or specific expertise. This shows that you value the investor's experience and network. Milestones: Outline the key milestones you aim to achieve with the requested funds. This gives investors a clear picture of your goals and how their investment will be utilized. An example of a successful ask slide includes: Clear Funding Amount: Specify the total amount you are raising. Detailed Use of Funds: Breakdown of how the funds will be allocated. Support Requests: Mention any additional support needed beyond capital. Milestones: Key objectives to be achieved with the funding. Create your own by downloading our free pitch deck template here. The Best Seed Funding Pitch Deck Examples Many successful founders and startups have shared the pitch decks they used to raise their seed rounds. Studying these examples can provide valuable insights and inspiration for your own pitch. Here are a few of our favorite pitch deck examples: Airbnb Pitch Deck Before becoming a publicly traded company, Airbnb (originally AirBed&Breakfast) used a pitch deck to raise $600k to get things off the ground. The Airbnb seed round deck is an excellent example of effective storytelling and hooking potential investors with a compelling narrative. Uber's Original Pitch Deck Uber, initially named UberCab, started with a humble pitch deck that emphasizes the importance of clarity and brevity. Their original deck focuses on facts and data, avoiding unnecessary fluff, and clearly presenting their value proposition and market potential. Buffer's Seed Round Pitch Deck Buffer, a social media management toolkit for small businesses, raised a $500k seed round and shared their deck on their blog. The Buffer seed round deck is notable for its focus on traction, showcasing the product's early success and growth potential. The Buffer team reached out to over 200 investors, conducted 50 meetings, and ultimately secured 18 investors. Sequoia Capital Pitch Deck Template Sequoia Capital, one of the leading venture capital firms, has also shared a pitch deck template that outlines key elements of a successful pitch. This template is designed to help startups communicate their vision and value proposition effectively. You can view Sequoia’s pitch deck template here. For more detailed breakdowns and to download our free pitch deck template, check out Visible’s guide here. Related resource: 23 Pitch Deck Examples for Any Startup How to Pitch Seed Stage Investors Once your pitch deck is complete, the pitching process begins. Here are some best practices for pitching seed stage investors: Best Practices for Pitching Seed Stage Investors Target the Right Investors: Save time by only reaching out to investors who match crucial factors such as industry, funding amount, stage, and geography. Use tools like our Connect Investor Database to find suitable matches. For tips on emailing your first investors, check out 5 Strategies for Cold Emailing Potential Investors. Incorporate Feedback: Treat feedback as a gift. When you start receiving feedback from your pitches, implement it back into your deck immediately. Notice which slides grab investors’ attention and consider moving those to the beginning or integrating their elements into other slides. Be a Confident Storyteller: Confidence and good storytelling are key to delivering a compelling pitch. Ensure investors feel your passion, energy, and ability to drive the company forward. Consider taking a stand-up comedy or public speaking class to enhance these qualities. Researching what makes good storytelling can also be advantageous. Prepare Thoroughly: Know your pitch deck inside out. Be ready to answer any questions investors might have about your business, market, financials, and growth plans. The more prepared you are, the more confident you’ll appear. Leverage Your Network: Whenever possible, seek warm introductions to investors. A recommendation from a mutual connection can significantly increase your chances of getting a meeting and receiving serious consideration. For more inspiration and resources on creating a compelling pitch, check out our free pitch deck template here. How Visible Helps Startups Raise Capital There is no one-size-fits-all pitch deck solution these points are meant to help guide the process but you should also see what makes sense for your company. Fundraising can be boiled down to storytelling. We believe a VC fundraise mirrors a B2B sales motion. The fundraising process starts by finding qualified investors (top of the funnel) and building relationships (middle of the funnel) with the goal of them writing a check (bottom of the funnel). Just as a sales team has dedicated tools for their day-to-day, founders need dedicated tools for managing the most expensive asset they have, equity. Our community can now find investors, track a fundraise, and share a pitch deck, directly from Visible. Easily upload your deck, set your permissions, and share your deck with potential investors via a unique link (check out an example deck here). In return, we’ll surface the analytics that matter most so you can better your odds of closing a new investor. Try Visible here.

Crowdfunding has become a popular way for startups to raise capital, offering an alternative to traditional funding methods. While it promises various benefits like community engagement and validation of your concept, it also comes with its own challenges. This article will delve into why some founders choose crowdfunding, explore the different types of crowdfunding, and outline the key pros and cons to help you decide if this path is right for your startup. Why Do Some Founders Choose to Crowdfund? Crowdfunding can be an attractive option for many startup founders due to its unique benefits and flexibility. Unlike traditional funding methods, crowdfunding allows founders to raise capital without giving up significant equity or taking on debt. This approach mainly benefits startups with innovative ideas but limited access to traditional financial resources. Crowdfunding enables founders to test the market and validate their product concepts by engaging directly with potential customers and investors​​​​. Crowdfunding campaigns can significantly enhance a startup's visibility. By showcasing their ideas on popular crowdfunding platforms, founders can reach a broader audience and build a community of early adopters and brand advocates. This exposure can lead to valuable marketing opportunities and further fundraising potential​​​​. Additionally, the democratization of funding allows everyday people to invest in startups they believe in, aligning their interests with the success of the business. This not only diversifies the funding sources but also turns backers into passionate supporters who promote the startup's vision​​. Crowdfunding also offers flexibility in how funds can be used, often with fewer restrictions compared to traditional loans or venture capital investments. This can be crucial for startups needing agility in their early stages​​. For many founders, the ability to maintain control over their company while still accessing necessary funds makes crowdfunding an appealing option. Types of Crowdfunding Crowdfunding is not a one-size-fits-all solution; various types cater to different needs and goals. Each type has its own unique characteristics and benefits, making it important to choose the one that aligns best with your startup's objectives. The main types of crowdfunding include reward-based, equity, peer-to-peer lending, and donation-based. Understanding these options can help you determine the best approach for raising capital for your startup​​​​. Related resource: Types of Crowdfunding Reward-Based Crowdfunding Reward-based crowdfunding is a popular method where backers contribute funds to a project in exchange for rewards. These rewards can vary widely but often include early access to the product, special editions, or exclusive merchandise. This type of crowdfunding is particularly appealing for creative projects, new product launches, and innovative ideas that can excite a broad audience. Platforms like Kickstarter and Indiegogo are leading examples of reward-based crowdfunding sites. Kickstarter is known for its all-or-nothing funding model, where projects must reach their funding goal to receive any money, ensuring that backers' contributions go towards fully realized projects​​​​. Indiegogo offers more flexible funding options, allowing projects to keep the funds raised even if they don't reach their target, which can be beneficial for creators with ongoing development needs​​​​. Reward-based crowdfunding not only provides necessary capital but also helps in building a community around the product. Backers often become early adopters and advocates, spreading the word about the project through their networks. This engagement can create a strong foundation of support and interest, vital for the long-term success of the startup​​. Equity Crowdfunding Equity crowdfunding is a method where startups raise capital by offering shares of their company to investors in exchange for funding. Unlike reward-based crowdfunding, where backers receive tangible rewards, equity crowdfunding allows investors to become partial owners of the company, potentially earning a return on their investment if the company succeeds. This type of crowdfunding is ideal for startups looking to raise larger sums of money and willing to share ownership to achieve their goals​​​​. Platforms like SeedInvest and Crowdcube specialize in equity crowdfunding. SeedInvest connects startups with accredited investors and provides a streamlined process for raising capital. The platform has helped numerous companies secure significant funding while offering investors the opportunity to be part of innovative ventures​​. Crowdcube, based in the UK, is another prominent platform that allows businesses to raise funds from a large pool of investors, including both accredited and non-accredited investors. This democratizes the investment process and enables a wider range of people to support and benefit from startup growth​​​​. Equity crowdfunding not only provides the financial resources needed for growth but also helps in building a strong base of invested supporters who are financially and emotionally committed to the startup's success. This type of crowdfunding can be a powerful tool for startups looking to scale rapidly and access a broader investor base​​​​. Related resource: Advantages and Disadvantages of Venture Capital Peer-to-Peer Lending Peer-to-peer (P2P) lending is a form of crowdfunding where startups and small businesses can obtain loans directly from individual investors, bypassing traditional financial institutions. This model connects borrowers with lenders through online platforms, allowing startups to access necessary funds more quickly and often at more favorable rates than those offered by banks​​​​. LendingClub and Prosper are two of the most well-known P2P lending platforms. LendingClub allows borrowers to apply for personal and small business loans, which are then funded by individual investors who choose to invest in the loan based on the borrower's profile and creditworthiness. Prosper operates similarly, providing a marketplace where borrowers can list loan requests and investors can fund these loans in exchange for interest payments​​​​. P2P lending offers several advantages for startups. It can provide access to capital without the need for extensive credit history, and the application process is typically faster and more straightforward than traditional bank loans. Additionally, P2P lending can offer more competitive interest rates and flexible terms, making it an attractive option for startups looking to manage their cash flow effectively​​​​. However, it is important for startups to carefully consider the terms and ensure they can meet repayment obligations, as defaulting on a P2P loan can impact their credit rating and investor relations​​​​. Donation-Based Crowdfunding Donation-based crowdfunding is a method where individuals contribute money to support a cause, project, or individual without expecting any financial return or tangible reward. This type of crowdfunding is often used for charitable projects, personal emergencies, community initiatives, and other ventures that rely on the goodwill of supporters. Donors contribute purely out of a desire to support the mission or cause presented. GoFundMe is one of the most popular platforms for donation-based crowdfunding. It allows individuals to create fundraising campaigns for a wide range of purposes, from medical expenses to educational endeavors, and even community projects. Donors can easily contribute to these campaigns and share them within their networks to increase visibility and support​​​​. Donation-based crowdfunding can be incredibly effective for raising funds quickly, especially when the cause resonates with a large audience. It also allows for the creation of a supportive community around the project or cause, fostering a sense of shared purpose and engagement among donors​​. However, this type of crowdfunding does not provide financial returns to donors, which can limit the amount of funds raised compared to equity or reward-based crowdfunding. Additionally, campaign creators must communicate transparently and regularly with their supporters to maintain trust and credibility​​. Pros of Crowdfunding Crowdfunding offers a range of benefits that can be particularly advantageous for startups. However, it's crucial to assess these advantages in the context of your specific business needs and future plans to determine if this funding path is the right choice for you. Here’s a brief overview of the main pros of crowdfunding: Build Community Around the Product By fostering a dedicated community through crowdfunding, you create a network of engaged supporters who are financially invested and emotionally committed to your product and mission. This community can be a powerful asset for your startup, driving sustained growth and success. Early Adopters and Advocates: Crowdfunding campaigns attract early adopters who are passionate about innovation and new products. These individuals are not just backers; they become advocates who promote your product within their networks, amplifying your reach and credibility​​​​. Direct Feedback and Involvement: Engaging with backers during the crowdfunding campaign allows for direct feedback and involvement in the product development process. Supporters feel valued when their opinions are considered, creating a stronger connection to the product and its success. This interaction helps refine the product to better meet market demands​​​​. Shared Mission and Vision: A successful crowdfunding campaign effectively communicates the mission and vision behind the product. This narrative resonates with backers who share similar values and goals, fostering a community united by a common purpose. This alignment can result in long-term loyalty and ongoing support beyond the initial campaign​​​​. Enhanced Trust and Loyalty: Regular updates and transparent communication throughout the campaign build trust and loyalty among backers. When supporters are kept informed about progress and challenges, they feel more connected and invested in the journey, which strengthens their commitment to your brand​​​​. Co-Creation Opportunities: Involving the community in decisions, such as product features or design choices, transforms backers into co-creators. This collaborative approach not only enhances the product but also deepens the emotional investment of the community in its success​​​​. Validates the Concept Crowdfunding not only raises funds but also validates your product concept by proving market demand, gathering real-time feedback, attracting additional investors, and identifying early adopters. This validation is crucial for refining your product and ensuring its success in the marketplace. Market Demand: A successful crowdfunding campaign indicates strong market demand. When backers contribute to your project, they are essentially voting with their wallets, showing that there is genuine interest and willingness to pay for your product​​​​. Real-Time Feedback: Throughout the campaign, you receive real-time feedback from backers. This input helps you understand customer preferences, make necessary adjustments, and improve your product before a full-scale launch. Positive feedback reinforces that your product is meeting market needs​​​​. Proof of Concept for Investors: Demonstrating successful crowdfunding can attract additional investors. It provides tangible proof that your product resonates with consumers and has the potential for broader market success, making it easier to secure further investment​​​​. Early Adoption Indicators: Early adopters who support your campaign are likely to become repeat customers and advocates. Their enthusiasm and initial support can be a strong indicator that your product is positioned correctly and poised for market acceptance​​​​. Allows Access to Finance Without Loans Crowdfunding enables you to raise capital without the need for traditional loans, which means you can avoid interest payments and the pressure of debt repayment, thereby maintaining better cash flow​​​​. Increases Visibility of the Company Crowdfunding can greatly enhance your startup's visibility through media coverage, social media engagement, customer interaction, improved SEO, and sustained marketing momentum. These benefits are crucial for building brand awareness and attracting further investment. Media Attention: Successful crowdfunding campaigns often attract media coverage. This exposure can help your startup gain attention from journalists, bloggers, and influencers who can further amplify your reach. Media coverage not only increases brand awareness but also adds credibility to your venture​​​​. Social Media Buzz: Crowdfunding platforms are inherently social, encouraging backers to share campaigns with their networks. This organic sharing can create a viral effect, dramatically expanding your audience and increasing engagement on social media channels​​​​. Customer Engagement: Engaging directly with backers through updates, comments, and feedback during the campaign fosters a sense of community and loyalty. This interaction helps build a strong brand identity and a base of enthusiastic supporters who can become long-term customers​​​​. Search Engine Optimization (SEO): Crowdfunding campaigns often generate a lot of online content, including blog posts, news articles, and social media mentions. This content can improve your startup's SEO, making it easier for potential customers and investors to find you online​​​​. Marketing Momentum: The excitement generated by a crowdfunding campaign can carry over into subsequent marketing efforts. The initial buzz helps build momentum for product launches, promotional events, and future funding rounds​​​​. Allows You to Retain Equity One of the key benefits of certain types of crowdfunding, such as reward-based or donation-based models, is that they allow founders to raise capital without giving up equity in their company. Here’s why this is important: Maintaining Control: By not giving away equity, founders retain full control over their company's decisions and direction. This autonomy is crucial for maintaining the original vision and executing long-term strategies without external interference​​​​. Future Valuation: Keeping more equity in the early stages can be beneficial when seeking future funding. Retaining equity means founders can offer a larger share of ownership in later funding rounds, potentially attracting larger investments at higher valuations​​​​. Financial Benefits: Retaining equity allows founders to reap more financial benefits if the company becomes successful. Founders can maintain a significant stake in the company, ensuring they benefit proportionally from the company’s growth and profitability​​​​. Investor Appeal: Having a larger equity stake can make the company more attractive to future investors, as it shows confidence and commitment from the founders. It also leaves more room to negotiate with potential investors in subsequent funding rounds​​​​. Related resource: Seed Funding Cons of Crowdfunding While crowdfunding can offer many advantages, it also comes with its own set of challenges and drawbacks. It's crucial to weigh these cons against your business's specific needs and future plans before deciding to pursue this funding route. Here’s a brief overview of the main cons of crowdfunding: Success is Not Guaranteed An unsuccessful crowdfunding campaign can have several serious implications for a startup. Firstly, it results in a significant loss of time and resources spent on planning, marketing, and engaging with potential backers​​​​. Failure can also harm your startup's reputation, as potential investors and customers might see it as a lack of market interest or viability, making future funding harder to secure​​. An unsuccessful campaign means missing out on valuable market validation and feedback, which are crucial for product development and refinement​​​​. Lastly, on some platforms, not meeting the funding goal means pledged funds are returned to backers, leaving the startup without any capital despite the effort invested​​​​. Your Intellectual Property Could Be at Risk If people "steal" your idea after you've shared it on a crowdfunding platform, it can have several detrimental effects. Competitors might copy your concept and bring similar products to market faster, undermining your unique selling proposition and competitive advantage​​​​. This can result in lost potential revenue, market share, and increased competition. Without proper intellectual property protections like patents, trademarks, or copyrights, you may have little legal recourse to stop others from using your ideas​​. This situation can also damage your reputation if backers perceive your idea is not original or sufficiently protected, potentially affecting future funding opportunities​​​​. Protecting your intellectual property before launching a crowdfunding campaign is crucial to protecting your business from these risks. Social and Legal Pressure to Deliver to Fundees on Promise When you launch a crowdfunding campaign and receive backing, you enter into a commitment to fulfill the promises made to your supporters. Here are the key obligations you have towards your backers: Delivering Promised Rewards: For reward-based crowdfunding, you must provide the specific rewards promised to your backers, such as products, services, or exclusive content. Failure to deliver these rewards can lead to dissatisfaction, negative reviews, and damage to your reputation​​​​. Regular Updates and Communication: Transparency is crucial in maintaining trust with your backers. This means providing regular updates on the progress of the project, addressing any delays or issues, and being honest about challenges and timelines. Effective communication helps manage backers’ expectations and can mitigate negative reactions if problems arise​​​​. Financial Accountability: Backers expect that the funds they contribute will be used as outlined in the campaign. Mismanagement of funds or deviation from the stated use can lead to loss of trust and potential legal issues. Keeping accurate financial records and being transparent about expenditures is essential​​​​. Legal Compliance: Depending on the platform and the nature of the crowdfunding, there may be legal obligations regarding the fulfillment of promises and the management of funds. Failure to comply with these legal requirements can result in lawsuits or other legal actions from backers​​​​. Managing Expectations: Backers are often passionate and vocal about the projects they support. Managing their expectations involves not only delivering on promises but also engaging with them constructively and respectfully, even when facing criticism or setbacks​​​​. Exposure and Public Scrutiny Crowdfunding campaigns inherently place your startup in the spotlight, significantly increasing both visibility and scrutiny. Here’s how this exposure can put your company under a microscope: Public Feedback and Criticism: Crowdfunding platforms allow backers and the general public to comment on your project. This means you can receive both positive feedback and harsh criticism. Negative comments or reviews can quickly spread, affecting public perception and potentially deterring future backers and customers​​​​. Transparency Requirements: To maintain trust, you must provide regular updates on your project's progress. This level of transparency means any delays, challenges, or changes are exposed to public view. If you face setbacks, you must explain these openly, which can amplify the pressure to meet your commitments​​​​. Performance Pressure: The success or failure of your crowdfunding campaign is publicly visible. This visibility can amplify the impact of both achievements and failures, making any missteps or unmet goals more damaging to your reputation and future fundraising efforts​​​​. Competitor Awareness: Publicly sharing detailed information about your business idea and progress alerts competitors, who might replicate or improve upon your concept. This can increase competition and pressure you to innovate continuously and protect your intellectual property​​​​. It’s Not Free, in Fact, It Can Be Costly Crowdfunding can require significant upfront investment and ongoing costs that startups need to consider carefully. Here are the key ways in which crowdfunding can be costly: Marketing and Promotion: A successful crowdfunding campaign requires extensive marketing to reach potential backers. This includes creating promotional videos, running social media ads, and possibly hiring PR firms to generate buzz. These marketing efforts can quickly add up, often running into thousands of dollars​​​​. Platform Fees: Most crowdfunding platforms charge a percentage of the funds raised as a fee. For example, Kickstarter and Indiegogo typically take around 5% of the total amount raised, plus additional payment processing fees of around 3-5%. These fees can significantly reduce the net funds received from a campaign​​​​. Production Costs: For reward-based crowdfunding, the costs of producing and shipping the rewards can be substantial. This includes manufacturing the products, packaging, and logistics. Misestimating these costs can lead to financial shortfalls and the inability to deliver promised rewards, further impacting the startup’s reputation and finances​​​​. Professional Services: To ensure the campaign is professionally managed, startups might need to hire various professionals, such as graphic designers, videographers, and copywriters. Additionally, legal and accounting services might be required to navigate the complexities of managing funds and ensuring compliance with financial regulations​​​​. Time and Resource Allocation: Running a crowdfunding campaign demands significant time and effort from the startup team. This can divert resources from other critical business operations, potentially slowing down other areas of growth and development​​​​. Key Things to Consider When evaluating crowdfunding as a funding option, there are crucial factors beyond just the basic pros and cons that you need to consider. These elements can significantly impact the success of your campaign and the overall health of your startup. Choose the Right Crowdfunding Platform Selecting the appropriate crowdfunding platform is crucial to the success of your campaign. Different platforms cater to various types of projects and audiences, each with unique features, fee structures, and support systems. Here are some of the major crowdfunding platforms and their differences: Kickstarter Kickstarter is one of the most well-known reward-based crowdfunding platforms. It operates on an all-or-nothing funding model, meaning projects must reach their funding goal to receive any money. This platform is ideal for creative projects, including art, music, film, and technology innovations. It has a large, active community of backers who are enthusiastic about supporting new and innovative ideas. However, the all-or-nothing approach can be risky if the campaign does not meet its target​​​​. Indiegogo Indiegogo also focuses on reward-based crowdfunding but offers more flexibility than Kickstarter. It provides both fixed and flexible funding options. With flexible funding, you can keep the funds raised even if you do not meet your goal, making it a safer option for projects that need any amount of funding to proceed. Indiegogo supports a wide range of projects, from tech gadgets to community initiatives, and offers additional services such as InDemand, which allows successful campaigns to continue raising funds after the initial campaign ends​​​​. SeedInvest SeedInvest is a leading equity crowdfunding platform, where backers invest in exchange for equity in the company. It targets startups looking to raise significant capital from accredited investors. SeedInvest provides extensive vetting and support, ensuring that only high-quality, vetted startups are presented to potential investors. This platform is suitable for startups ready to scale and attract serious investors who are looking for a return on their investment​​​​. Crowdcube Crowdcube, based in the UK, also specializes in equity crowdfunding. It allows both accredited and everyday investors to invest in startups in exchange for equity. Crowdcube has a large and diverse investor base, making it an excellent choice for startups looking to raise funds from a wide audience. It provides a comprehensive platform for managing investments and maintaining ongoing communication with investors​​​​. GoFundMe GoFundMe is a donation-based crowdfunding platform commonly used for personal causes, charitable projects, and community initiatives. It does not offer tangible rewards or equity in exchange for contributions. Instead, donors give money to support a cause they believe in. GoFundMe is ideal for non-profit organizations, individuals seeking help with medical expenses, or community projects that need financial support​​​​. Set a Strategy and Goals Ahead of Time Setting a strategy and goals ahead of time ensures that your crowdfunding campaign is well-organized, efficiently run, and more likely to succeed. It also helps align efforts, manage resources, and effectively engage with your target audience, all of which are critical for achieving your funding goals. Clarity and Direction: Having a well-defined strategy provides a clear roadmap for your campaign. It helps you outline the steps you need to take, the resources required, and the timeline to follow. This clarity ensures that everyone involved in the campaign is on the same page and working towards the same objectives​​​​. Target Setting: Specific goals allow you to set realistic funding targets. These targets not only help in measuring success but also in planning the allocation of funds. Knowing exactly how much money you need and for what purpose enables you to communicate this effectively to potential backers, increasing their confidence in your project​​​​. Resource Allocation: A strategic plan helps in identifying and allocating the necessary resources, such as marketing efforts, team roles, and financial investment. By understanding what resources you need and planning their use, you can optimize efficiency and avoid last-minute scrambles that could derail your campaign​​​​. Marketing and Promotion: Effective marketing is essential for a successful crowdfunding campaign. A pre-defined strategy helps you plan your promotional activities, such as social media campaigns, email newsletters, and press releases. It ensures that you reach your target audience effectively and create the necessary buzz around your campaign​​​​. Risk Management: By setting goals and planning ahead, you can identify potential risks and challenges that might arise during the campaign. This foresight allows you to develop contingency plans to address these issues, reducing the likelihood of unexpected setbacks​​​​. Backer Engagement: A clear strategy includes plans for engaging with backers throughout the campaign. Regular updates, prompt responses to inquiries, and transparent communication help build trust and maintain backer interest. Knowing how and when to interact with your supporters can significantly impact the campaign's success​​​​. Decide What Type of Funding Is Right for Your Startup with Visible.vc Crowdfunding offers both significant benefits and notable challenges for startups. While it can build a supportive community, validate your product, and provide necessary capital without loans, it also requires careful planning, transparency, and the management of public scrutiny. As you weigh these factors, consider your specific needs and future plans to determine if crowdfunding is the right path for your startup. To effectively track and manage your crowdfunding efforts and overall startup growth, create your Visible account today and give it a free try for 14 days here.

Chicago boasts a rich history as a major industrial hub. As of 2023, it ranked second in the U.S. for the concentration of Fortune 500 companies, with 31 headquartered in the city. This industrial legacy has created a fertile ground for innovation and entrepreneurship, making Chicago an attractive location for startups and established businesses alike. Benefits of Starting Up in Chicago Starting a business in Chicago comes with several key advantages: Access to Talent: Chicago is a top tech talent hub, attracting professionals from diverse backgrounds. The city's educational institutions produce a steady stream of skilled graduates, and programs like the Illinois Department of Innovation & Technology's trainee program help build a pipeline of tech talent​​. Cost of Living: Compared to other major tech cities like San Francisco and New York, Chicago offers a more affordable cost of living. This allows startups to allocate more resources towards growth and innovation rather than exorbitant living expenses. Supportive Community: Chicago has a strong and collaborative startup community. Numerous events, meetups, and organizations like Hyde Park Angels and P33 foster a supportive environment for entrepreneurs. The city is also noted for its efforts to create an equitable business environment, particularly for minority and women founders​​​​. Robust Infrastructure: Chicago's infrastructure supports business growth with its extensive transportation network, including two major international airports, major highways, and railroads. This connectivity facilitates easy access to national and global markets​​. Key Innovation Hubs and Facilities Chicago's founders benefit from a robust network of startup accelerators and incubators that provide essential support and resources. Notable among these are Techstars Chicago and the Chicago Innovation Exchange, which have been pivotal in nurturing early-stage ventures. Innovation hub 1871 continues to be a cornerstone of Chicago’s tech ecosystem, hosting the AI Innovation Lab in June, which fosters industry innovation and networking opportunities​​​​. Educational and Research Strengths Chicago's startup growth is significantly driven by its abundance of top-tier universities and research institutions, including Northwestern University, The University of Chicago, and the Illinois Institute of Technology. These institutions supply a steady stream of talent and foster innovation through dedicated programs and funding initiatives. The UChicago Startup Investment Program is a $25 million fund that invests in startups led by UChicago faculty, students, staff, and alumni, thereby fueling the city’s entrepreneurial spirit. Additionally, the City Colleges’ Digital Scholars summer pipeline program connects high school and first-year college students to startup opportunities, further enhancing the ecosystem's talent pipeline​​​​. Related Resource: How to Find Venture Capital to Fund Your Startup: 5 Methods Chicago VCs Actively Investing in Startups At Visible, we often compare a startup fundraising process to a traditional B2B sales and marketing funnel. At the top of your funnel, you are adding qualified investors. Nurturing them in the middle of the funnel with email, meetings, pitches, etc. And ideally closing them as a new investor at the bottom of a funnel. Just like a sales and marketing funnel, a fundraising funnel needs to start with the right investors for your business (e.g. qualified lead or qualified investor). One of the aspects founders will want to research is the geography of the investor and where they invest. Check out a few popular venture capital firms located in Chicago below: 1. Hyde Park Venture Partners According to the team at Hyde Park Venture Partners, “We’re an early-stage venture capital firm focused on high-growth, mid-continent technology startups. We seek companies with an exceptional founding team and fast-growth potential, looking to raise a first or second round of capital. With offices in Chicago and Indianapolis, our team is tenacious, responsive, and committed to adding value to each investment.” Learn more about Hyde Park Venture Partners and check out their Visible Connect Profile here → Investment Range The team at Hyde Park invest in early-stage companies — pre-seed to series A. According to their Visible Connect Profile, the team at Hyde Park Venture Partners generally writes checks anywhere between $250k and $4M. Industries Hyde Park Venture Partners primarily invests in SaaS, marketplace, and tech-enabled companies. Popular Investments Some of Hyde Park Venture Partners most noteable investments include: G2 Avant High Alpha Terminus 2. Chicago Ventures As the team at Chicago Ventures put on their website, “We lead seed rounds before it’s obvious, and serve as active, operationally-involved partners during a company’s earliest days.” The team at Chicago Ventures pinpoints 4 areas where they are best suited to help their portfolio companies: Talent: Build your company Community: Skill up Customers: Identify + connect Communication: Tell your story Learn more about Chicago Ventures and check out their Visible Connect Profile here → Investment Range The team at Chicago Ventures has a focus on leading seed rounds. According to their Visible Connect Profile, this can range in checksizes from $500k to $5M. Industries The team at Chicago Ventures is agnostic in their industries and look to invest in “overlooked teams.” Popular Investments Some of Chicago Ventures most noteable investments include: Logicgate Project44 Tock 3. LongJump According to their website, “LongJump is an investment fund, run by founders and operators. We invest in high potential founders and help them turn their ideas into fast-growing businesses. In addition to capital, we also provide connections and community to our portfolio, helping to connect you with other investors, employees, and advisors.” The team at LongJump is full of founders and operators which offers portfolio companies the opportunity to lean on their experience and networks. Learn more about LongJump and check out their Visible Connect Profile here → Investment Range The team at LongJump is focused on seed investments (particularly writing the first check in a company). They typically write checks anywhere between $50k and $100k. Industries The team at LongJump is agnostic in their investment industries. You can learn more in their thesis below: “The population of founders in Chicago (and everywhere else, too) should mirror the community around them. But we don’t see that. Instead we see deep bias towards certain people, certain industries, and certain backgrounds — none of which are predictive of success. And we see this opportunity gap widening over time, creating a chasm that prevents many from starting companies and getting them to the next level. That’s why we’re creating LongJump. To help founders of all backgrounds, all races, all genders, and all socio-economic conditions to get their start. This isn't a charity; this is an opportunity.” Popular Investments Some of LongJump’s most noteable investments include: Stabl STIGMA Anjoy 4. Origin Ventures According to their website, “Origin Ventures is an early-stage venture capital firm investing in software, consumer, and marketplace businesses in the Digital Native economy.” Learn more about Origin Ventures and check out their Visible Connect Profile here → Investment Range According to their Visible Connect Profile, the team at Origin Ventures typically writes checks anywhere between $500k and $5M. Industries The team at Origin Ventures has an intense focus on software, marketplace, and consumer apps. You can learn more in their thesis below: “We believe businesses built for Digital Natives have an outsized growth advantage. The Digital Native Economy is powered by 140M Millennials and Gen Z between the ages of 10 and 40. They’re the first generations to have a smart phone, pervasive high speed internet, and social media from a young age. Digital Natives grew up with a cell phone in their hand, and they do things differently than prior generations as a result. We’ve identified themes driven by these behavioral changes and use them to drive our investment strategy.” Popular Investments Some of Origin Venture’s most noteable investments include: GrubHub Cameo Tock 5. Energy Foundry According to their website, “Energy Foundry invests venture capital in today’s most promising energy innovators, and we work with the world’s leading energy companies to build and scale new ventures. Our approach merges venture capital with the perks of partnership, and includes an arsenal of essential tools and relationships to help bring great ideas to market.” Learn more about Energy Foundry and check out their Visible Connect Profile here → Investment Range According to their Visible Connect Profile, the team at Energy Foundry typically writes checks anywhere from $750k to $10M. Industries The team at Energy Foundry has a focus on disruptive energy and cleantech startups. You can learn more about their approach below: “We invest early-stage venture capital in energy start-ups with transformational technologies, an eye towards growth, and ridiculously talented teams. Technology advancements are disrupting the energy industry and creating new venture opportunities. Those who understand this dynamic landscape can unlock value. That’s why we focus exclusively on energy. Energy Foundry effectively deploys capital and leverages strategic tools to de-risk investments and accelerate time to market for the most promising ventures.” Popular Investments Some of Energy Foundry’s most noteable investments include: Azumo Bractlet e-Zinc 6. Starting Line According to the team at Starting Line, “Starting Line invests in founders who are willing to take on substantial personal risks, out of fear of living a life of regret. That fear of wondering what life might have looked like if you’d just gone for it.” Learn more about Starting Line in our interview with Ezra Galston of Staring Line below: Investment Range The team at Starting Line directly lays out their investment range below: “We are a first check venture capital fund, meaning that we aim to anchor true seed rounds with check sizes ranging from $750,000 – $2,000,000 in rounds ranging from $1 – $6M. Our sweet spot within that range is leading $1-1.25M into a $2.5M seed round. We typically write our largest check in a Company’s first round, though we do retain reserves for all portfolio investments.” The Starting Line team is extremely transparent and offers countless opportunities to learn about their investment process on their website here. Industries As put on their website, “Starting Line is a thematic early stage venture capital fund focused on investing in consumer marketplaces, services and products that are cheaper and better, improve access for the 99% + as well as the software infrastructure that enables it.” Popular Investments Some of Starting Line’s most noteable investments include: Substack Made in Spothero 7. Jump Capital According to the team at Jump Capital, “Jump provides series A and B capital to data-driven tech companies within the FinTech, IT & Data Infrastructure, B2B SaaS and Media sectors. We back entrepreneurs with bold vision seeking a business partner and not just a financial investor.” Learn more about Jump Capital and check out their Visible Connect Profile here → Investment Range The team at Jump Capital typically writes checks somewhere between $1M and $10M. Learn more below: Industries The team at Jump Capital is primarily focused on the following industries: Fintech IT and Data Infrastructure Media B2B SaaS Popular Investments Some of Jump Capital’s most noteable investments include: 4C Insights Fast Radius Lumere 8. MATH Venture Partners As put by the team at MATH, “We believe companies that have an unfair advantage in customer acquisition will outperform. This advantage is usually inherent in the business model – leveraged sales, channel partners, compliance triggers, network effects, expansion opportunities or some other element creating urgency in the market.” Learn more about MATH Venture Partners and check out their Visible Connect Profile here → Investment Range The team at MATH Venture Partners typically writes checks anywhere between $1M and $2M. You can learn more abou their investment criteria below: Industries As put by the team at MATH, “Our portfolio includes software, data analytics, marketplaces and e-commerce companies across industries. We invest in both B2B and B2C businesses. We do not invest in medical device, life sciences or capital-intensive businesses.” Popular Investments Some of MATH Venture Partners most noteable investments include: 86 Repairs Spothero Acorns 9. New Stack Ventures As the team at New Stack said, “At New Stack, we invest in outsiders. Our startups don’t look like what’s commonly funded in Silicon Valley. The standard formula of Stanford educated, Google trained, Bay Area-located is not what we’re looking for. We believe in mission-driven founders with an irrational commitment to their cause –regardless of location or circumstance.” Learn more about New Stack Ventures and check out their Visible Connect Profile here → Investment Range The team at New Stack Ventures typically writes checks between $500k and $1.5M. Industries As put on their website, “New Stack invests broadly across sectors and categories with an emphasis on B2B SaaS, Fintech, Supply Chain, Cyber, Proptech, Healthcare, and eCommerce.” New Stack also has themes they look for in their companies below: “TRACTABLE: Tools that give non-experts, expert capabilities UGV: Platforms that empower users to generate value ACCESS TO IDLE SUPPLY: Activating idle capacity TROJAN HORSE: Targeted beachhead provides access to broader opportunity NETWORK EFFECTS: Value increases as users increase BD INNOVATION: Customer acquisition strategy is as novel as the product COMPETING W/ NON-CONSUMPTION: Turning non-consumers into consumers MOUNTING LOSS: As individual usage increases, switching costs increase” Popular Investments Some of New Stack Ventures most noteable investments include: Hologram Fixer WithMe 10. Cultivian Sandbox Ventures As put by the team at Cultivian Sanbox Ventures, “Cultivian Sandbox is a venture capital firm focused on building next-generation food and agriculture technology companies capable of generating superior returns. As early investors and active board members, we employ a hands-on approach to building companies and are often directly involved in setting company strategy, recruiting key executives, and raising additional capital.” Investment Range According to their website, “Cultivian Sandbox makes equity investments of $1-10M and participates in follow-on financings of high-performing companies. We generally focus initial investments on early-stage companies and invest selectively at later stages.” Industries Cultivian Sandbox Ventures has a focus on next-generation food and agriculture technology. Related Resource: VCs Investing In Food & Bev Startups Popular Investments Some of Cultivian Sandbox Venture’s most noteable investments include: Copper Cow Coffee Full Harvest Culture 11. CMT Digital CMT Digital is a venture capital firm engaging in the crypto asset and Blockchain technology industry. The firm focuses on asset trading, blockchain technology investments, and legal and policy. It was founded in 2017 and is based in Chicago, Illinois. Investment Range: CMT Digital typically invests in pre-seed companies but they have also been known to invest in mid-stage companies, with investment amounts ranging from $500,000 to $5 million. Industries: SaaS Crypto Fintech Financial Services Blockchain Software Consumer Goods Popular Investments: BlockFi: A leading provider of crypto-backed loans and interest-bearing accounts for cryptocurrency holders, aimed at making crypto assets more accessible and useful. Brave: The privacy-focused web browser that rewards users with cryptocurrency for viewing privacy-respecting ads, enhancing online privacy and monetization. Synthetix: A decentralized finance protocol that enables the creation of synthetic assets, providing new avenues for trading and investment in digital assets. 12. Sandbox Industries Sandbox Industries is at the forefront of fostering transformative change in crucial sectors such as healthcare, insurance, and sustainability. The firm is dedicated to creating meaningful impacts on people's lives by challenging and improving existing systems. What sets Sandbox Industries apart is its hybrid approach to investing, blending traditional and corporate strategies. The firm collaborates closely with industry stakeholders to ensure that their portfolio companies receive strategic guidance and support. By engaging industry leaders as strategic limited partners, Sandbox Industries creates a unique ecosystem that bridges the gap between strategic investors, financial backers, and innovative startups, facilitating a collaborative environment that drives growth and innovation. Investment Range: Sandbox Industries typically invests in early to mid-stage companies, with investment amounts varying based on the needs and potential of the startup. While specific investment ranges are not publicly detailed, the firm’s involvement often includes substantial financial backing coupled with strategic support to ensure the growth and success of its portfolio companies. Industries: Sandbox Industries focuses on three main sectors: Healthcare: Investing in innovative solutions that improve patient outcomes and streamline healthcare delivery. Insurance: Supporting startups that bring new technologies and business models to the insurance industry, enhancing efficiency and customer experience. Sustainability: Funding companies that develop sustainable technologies and practices, aiming to address environmental challenges and promote long-term ecological health. Popular Investments: GoHealth: A leading health insurance marketplace that simplifies the process of finding and enrolling in health insurance plans. Tempus: A technology company focused on collecting and analyzing clinical and molecular data to enhance precision medicine. Bloomscape: An online plant retailer that delivers healthy plants directly to customers’ homes, accompanied by expert advice and care tips. 13. M25 Early-stage VC investing in startups headquartered in the Midwest across a wide variety of industries. Learn more about M25 and check out their Visible Connect Profile here → Investment Range: $ 250K - $ 500K with a sweet spot check size of $ 350K Industries: SaaS E-commerce Consumer and Consumer Goods Marketplaces B2B and B2C Mobile Enterprise Popular Investments: Continuum: a ConnectWise company, is the proactive platform for what’s next. With technologies and integrated services spanning security to backup to monitoring, the Continuum platform anticipates and tackles MSPs’ next challenges—enabling them to grow confidently. Redi Health: Redi puts more simplified tools in the hands of patients than ever before and creates novel pathways of connectivity to the support and resources patients wouldn’t otherwise have access to. Authenticx: Authenticx provides a single source of conversational data for customer insight analytics to inform business decisions. 14. Arch Venture Partners ARCH Venture Partners invests primarily in companies co-founded with leading scientists and entrepreneurs, concentrating on bringing to market innovations in information technology, life sciences, and physical sciences. ARCH currently manages five funds totaling over $700 million and has invested in the earliest venture capital rounds for more than 90 companies. ARCH investors include major corporations, financial institutions, and private investors. Investment Range: $ 50K - $ 150M Industries: Biotechnology Health Care Life Sciences Energy Finance Consumer Goods Popular Investments: FogPharma: The company is pioneering the discovery, development and commercialization of HeliconTM peptides, a new drug modality that uniquely combines the broad targeting power of monoclonal antibodies with the cell-penetrating ability of small molecules. Moonwalk Biosciences: Moonwalk Biosciences operates a genomic medicine company that aims to provide a new class of precision epigenetic medications. Accompany Health: Accompany Health provides comprehensive in-home care to patients who live in sometimes underserved regions. 15. Pritzker Group Pritzker Group, the investment firm founded by Tony and J.B. Pritzker, comprises three professional investment teams: middle-market acquisitions, technology venture capital and asset management. Unlike private equity and venture capital firms with traditional limited partner structures, Pritzker Group’s permanent capital base brings significant advantages, including alignment with management teams, efficient decision-making and flexible transaction structures. The Pritzkers’ history and the firm’s success give their companies access to an unparalleled network of advisors, strategic partners and customers. Investment Range: $ 500K - $ 5M Industries: SaaS Software E-Commerce Consumer Goods Popular Investments: Fuel Me: Fuel Me simplifies the fuel procurement process while enabling customers to manage all purchases on a single platform, optimizing operations and administrative procedures while providing extensive cost savings. Machinery Partner: We are experts in industrial machinery who help companies that use heavy equipment make more money, by growing their operation. CarbonBuilt: CarbonBuilt's Carbon XPrize-winning technology enables the production of ultra low-carbon concrete products, driving gigatonne-scale greenhouse gas reductions through the cost-effective mineralization of carbon dioxide. Alternative Funding in Chicago Chicago's local government actively supports startups through various initiatives, grants, and programs. Illinois Department of Innovation & Technology (DoIT): This state department offers programs aimed at building a pipeline of tech talent and supporting innovation across the state, including initiatives for underserved communities​​. P33 TechRise: This nonprofit received significant funding to support underserved founders in scaling their startups. The initiative focuses on creating an inclusive business environment and providing resources to minority entrepreneurs​​. Office of Minority Economic Empowerment (OMEE): OMEE works to create equitable business opportunities for Black entrepreneurs and other minority groups, offering various grants and support programs to foster diversity in the startup ecosystem​​. Connect With Investors Today At Visible, we oftentimes compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. Related Resource: The 12 Best VC Funds You Should Know About With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here. Related Read: Private Equity vs Venture Capital: Critical Differences

Jessica is the co-founder and president of Maad, francophone Africa’s fastest-growing B2B e-commerce player. Jessica and her team adopted Visible in December 2021 to start sending out investor updates for the first time after closing a pre-seed round. Since then the team at Maad has continued to leverage Visible’s suite of fundraising tools such as data rooms and pitch decks. Maad successfully closed its seed round led by Ventures Platform in late 2023. Read more about their recent coverage in TechCrunch here. This case study details why Maad chose Visible and the specific solutions they leveraged to support the successful raise of their seed round. Jessica's Founder Journey—From Airbnb to Empowering Retail Owners in Africa Maad was co-founded by Jessica Long in 2021. Jessica has a demonstrated passion for creating software that adds value operationally. She fostered this passion in her previous work as a software engineer at Airbnb, building systems to support novel machine learning and crowdsourcing technology at Idibon in San Francisco, and leading the development of national digital health platforms in West Africa as the Director of Global Services at Dimagi. Jessica started Maad because she believed that better data tools could transform the business landscape of Senegal and other developing West African countries. After spending two years building out a generalizable tech platform to track field operations of all kinds, she and her cofounders zeroed in on the informal retail market. With 100,000s of small shops sourcing the same products from a patchwork supply network, Jessica saw a big opportunity to connect small shops directly to the agribusinesses supplying them. Maad is now Francophone Africa's fastest-growing B2B e-commerce player. Maad supplies food, beverages, and everyday household products to thousands of small shops. The company is dedicated to empowering traditional retailers in Francophone West Africa. Their product offerings provide traditional retailers with a mobile app that’s a one-stop shop for all their supply needs and Fast-Moving Consumer Goods (FMCG) brands with a complete picture of the fragmented consumer market. The Need to Professionalize Investor Communications After Raising a Pre-seed Round Maad closed a pre-seed round in 2021 led by Launch Africa, Oui Capital, and Alumni Ventures. This was the first time Jessica and her cofounders had ever sent out monthly investor updates. Their first attempt included a few bullet points in an email to which her investors gave her feedback: “You could be doing this more professionally.” Jessica’s early investors explained that monthly updates are often the first thing that new investors will look at to understand the trajectory of a company. “Writing crisp, effective updates was one of the best ways to showcase our company’s growth and development,” - Jessica Long, Co-Founder and President of Maad The team at Maad took this feedback to heart and evaluated several tools for the job. In response to why Jessica chose Visible she shared, “Visible struck us as the best choice, with its emphasis on high-quality email reports.” Jessica highlighted specific features that made Visible stand out: Filterable contact lists that make it easy to manage the email’s audience The ability to add charts and graphs inline The optional live data integration The ability to add photos and GIFs Recipient engagement tracking Maad’s Growing Need for Visible’s Fundraising Solutions Originally Maad’s primary use case for Visible was sending out monthly updates to investors. When Maad started its second fundraise, Visible became its centralized fundraising solution where they also hosted their pitch decks and data rooms as well. “It truly became a home for sharing information with investors about our company.” - Jessica Long, Co-Founder and President of Maad Since first leveraging Visible in December 2021 to update current investors, Maad utilized Visible’s more advanced fundraising solutions and successfully closed their Seed round of $2.3M (in equity) in late 2023. The round was led by Ventures Platform. Read more about the announcement of Maad’s recent financing in TechCrunch here. Visible Impact on Maad’s Investor Engagements Visible has equipped Maad to send high-quality investor updates every month since December 2021. Visible's update engagement tracking allowed Jessica to see how closely prospective investors were following her company, which helped their team prioritize their timespend during the seed stage fundraise. Increasingly, the team at Maad kept all investor-related information assets on the Visible platform including monthly investor updates, pitch decks, and data rooms. This created a clean and consistent place for sharing information and tracking engagement. “Every month we get compliments on the quality of the investor updates we are able to generate with Visible’s platform.” Maad’s Top Four Visible Solutions Jessica shared the key advantages of using the Visible platform are: The beautiful and polished investor updates Thoughtful collaboration and versioning features Engagement tracking Consolidation of all major sources of investor information onto a single platform Below are some examples of some of Maad’s favorite solutions in Visible. 1) The ability to store investor updates all in one place. This makes it easy to review previous updates, track engagement rates, and resend the updates if needed. 2) Fun features like directly embedded GIFs in newsletters allow us to connect with Maad’s supporters with more immediacy. 3) Uploading different pitch decks to the same link is an incredible feature for us. We love the versioning and collaboration this allows us internally, while presenting a unified experience to external collaborators 4) Beautiful graphs, directly configurable on the platform, are one of the most popular features of our monthly updates:

Creating a pitch deck that captivates investors is crucial for any startup founder looking to secure funding. But what slides should you include to make the strongest impression? In this article, we'll walk you through the ten essential slides every pitch deck needs. From outlining your problem statement to showcasing your financials, we'll provide you with a roadmap to crafting a compelling narrative that captures investor interest and sets the stage for successful fundraising. Get ready to transform your pitch deck and elevate your startup's potential. Related resource: Our Teaser Pitch Deck Template Why Are Pitch Decks Important? Pitch decks are crucial because they offer a concise, visually appealing format to present a startup's business plan to potential investors. They are the preferred format for several reasons: Clarity and Focus: A well-structured pitch deck highlights the most critical aspects of your business, such as the problem, solution, market opportunity, and financial projections. This ensures that investors quickly grasp the essence of your startup. Engagement: Visual elements like graphs, charts, and images make the presentation more engaging and easier to follow. This helps maintain the attention of investors, who often review numerous pitches. Efficiency: Pitch decks allow founders to convey essential information succinctly. By adhering to guidelines like the 10/20/30 rule, presentations remain brief and impactful, respecting the time constraints of busy investors. Storytelling: They provide a narrative structure that helps tell your startup's story compellingly. This narrative approach helps build a connection with investors, making your pitch more memorable. Related resource: Seed Round Pitch Deck The 10/20/30 Rule The 10/20/30 Rule, introduced by venture capitalist Guy Kawasaki, is a guideline designed to help create effective and engaging pitch decks. According to this rule, a pitch deck should adhere to three key principles: Ten Slides: Limit your presentation to ten slides. This constraint forces you to focus on the most essential information, ensuring clarity and preventing information overload for your audience. Twenty Minutes: Aim to deliver your presentation within twenty minutes. This time frame is optimal for maintaining investors' attention while providing enough time for discussion and questions. Thirty-Point Font: Use a minimum font size of thirty points for your text. This ensures that your slides are easily readable from a distance and encourages you to be concise, using only the most important points. Adhering to the 10/20/30 Rule is crucial for several reasons. Keeping the presentation short and engaging helps maintain the audience's interest. It also ensures that your key messages are communicated clearly and effectively, making it easier for investors to understand and remember the critical aspects of your business. By following this rule, you can create a pitch deck that is both powerful and persuasive. Related resource: Slides in a Pitch Deck Slides to Include in Your Pitch Deck When it comes to pitch decks, less is more. A concise and focused presentation allows you to communicate your startup’s value proposition effectively without overwhelming your audience. Including only the most essential slides ensures your message is clear and impactful. Here are the ten key slides you should include in your pitch deck: Related resource: Pitch Deck Design Title Slide The title slide is your first impression and sets the stage for the entire pitch. It should be clean, professional, and include the following key elements: Company Name: Clearly state the name of your startup to establish brand identity. Your Name and Title: Include your name and title to personalize the presentation and establish credibility. Contact Information: Provide your email address and phone number so investors can easily reach out for follow-ups. Company Logo: Display your logo to reinforce brand recognition and professionalism. Tagline or Mission Statement: A brief, compelling tagline or mission statement can succinctly convey your company’s purpose and vision. The title slide is important because it sets the tone for the rest of your presentation. It provides essential information at a glance and makes it easy for investors to remember who you are and how to contact you. Example Airbnb: Airbnb's pitch deck title slide prominently features their logo, the company name, and a tagline: "Book rooms with locals, rather than hotels." This immediately communicates their unique value proposition. Problem Statement The problem statement slide is critical because it sets the stage for why your startup exists. It should clearly define the problem your product or service aims to solve, making it relatable and compelling to potential investors. To make a strong introductory statement, include the following metrics: Market Size: Quantify the problem by highlighting the size of the market affected. This shows the potential scope and impact of your solution. Prevalence: Use statistics to illustrate how widespread the problem is. For instance, stating that "70% of small businesses struggle with cash flow management" makes the problem tangible and urgent. Financial Impact: Provide data on the financial consequences of the problem. For example, "Businesses lose $100 billion annually due to inefficient inventory management" underscores the economic significance. User Pain Points: Highlight specific pain points experienced by your target audience. This helps investors understand the real-world challenges and frustrations that your solution addresses. Importance These metrics are important because they: Establish Relevance: Demonstrate that the problem is significant and affects a large number of people or businesses. Quantify Opportunity: Show investors the potential market size and financial opportunity if the problem is solved. Create Urgency: Emphasize the immediate need for a solution, making your startup's mission compelling and timely. Examples Airbnb: In their pitch deck, Airbnb highlighted the problem by stating, "Price is an important concern for customers booking travel online." They supported this with data on the cost of hotel stays and the growing trend of people seeking more affordable options. LinkedIn: LinkedIn’s pitch deck focused on the problem of professionals struggling to maintain effective networking. They presented data on the limitations of existing solutions like traditional resumes and business cards, highlighting the need for a modern professional networking platform. Related resource: How to Create Impactful Problem/Solution Slides for Your Pitch Deck Solution or Product Description The solution or product description slide is your opportunity to showcase how your startup addresses the problem identified in the previous slide. To capture the attention of investors, your product needs to be conveyed clearly, compellingly, and convincingly. Here’s how to do it: Clear Description: Provide a concise and clear description of your product or service. Avoid jargon and ensure that even someone unfamiliar with your industry can understand the solution. Value Proposition: Highlight the unique value proposition of your product. Explain what sets it apart from existing solutions and why it is better or more effective. Key Features: Showcase the main features and functionalities that solve the problem. Use bullet points or visuals to make these features easily digestible. Benefits: Focus on the benefits your product provides to users. Explain how it improves their lives or businesses, making it indispensable. Visuals and Demos: Use images, screenshots, or short video demos to demonstrate your product in action visually. This helps investors see the product’s potential and functionality. Importance Conveying your product effectively is crucial because: Demonstrates Feasibility: Shows that you have a viable solution to the problem. Builds Credibility: Demonstrates your understanding of the market and user needs. Engages Investors: A compelling presentation captures interest and encourages investors to learn more. Examples Mint: Mint’s pitch deck described their personal finance tool by emphasizing how it simplifies money management. They highlighted key features such as budget tracking and financial goal setting, supported by screenshots of the app interface, making the value proposition clear and compelling. Market Opportunity The market opportunity slide is crucial in demonstrating your startup's potential for growth and profitability. Investors need to see that there is a significant and growing market for your product or service. Here’s how to effectively present this information: Market Size: Show the total addressable market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM). These figures illustrate the overall market size and the portion your startup aims to capture. Growth Trends: Highlight industry trends that indicate market growth. This could include increasing adoption rates, technological advancements, or shifts in consumer behavior that favor your solution. Customer Segments: Identify and describe your target customer segments. Provide data on their demographics, needs, and purchasing behaviors. Competitive Landscape: Show the current state of the market, including major competitors and gaps that your startup can exploit. Use charts or graphs to illustrate market share distribution. Economic Indicators: Include relevant economic indicators, such as market growth rates, average customer spending, and profitability margins. These data points help quantify the opportunity. Importance The market opportunity slide is important because: Validates Potential: Demonstrates that there is a real and significant demand for your product. Attracts Investors: Investors are likelier to invest in startups operating in large and growing markets. Guides Strategy: This helps investors understand your strategic positioning and market entry plans. Examples WeWork: WeWork’s pitch deck presented the growing demand for flexible workspaces. They included data on the rise of freelancers, remote work trends, and the shift away from traditional office spaces, demonstrating a significant market opportunity. Business Model The business model slide is crucial for showing investors how your startup plans to generate revenue and achieve profitability. It provides a clear picture of the financial mechanics of your business, demonstrating that your venture is viable and potentially lucrative. Here’s what you should include: Revenue Streams: Detail the different ways your business will make money. This could include direct sales, subscription fees, licensing, advertising, or other revenue models. Pricing Strategy: Explain your pricing model and how it aligns with your revenue streams. Include any tiered pricing, freemium models, or volume discounts. Cost Structure: Outline your key costs, including fixed and variable expenses. This helps investors understand your cost base and how it scales with growth. Profit Margins: Provide data on expected profit margins. This shows how much of your revenue translates into profit after expenses. Customer Acquisition Cost (CAC): Present the cost of acquiring a new customer. This metric is crucial for understanding the efficiency of your sales and marketing efforts. Lifetime Value (LTV): Estimate the average revenue generated from a customer over the lifespan of their engagement with your business. LTV helps investors gauge long-term profitability. Break-even Analysis: Show when your startup is expected to become profitable. This includes the break-even point where total revenues equal total costs. Importance These data points are important because: Demonstrate Viability: Show that you have a realistic and thought-out plan for generating revenue. Build Credibility: Provide concrete financial metrics that back up your business strategy. Attract Investment: Help investors understand the financial potential and risk associated with your startup, making it easier for them to commit funds. Examples YouTube: In their early pitch decks, YouTube highlighted their ad-supported revenue model. They explained how they planned to monetize user-generated content through targeted advertising, showcasing potential ad revenue projections based on user engagement metrics. Go-to-Market Plan The go-to-market (GTM) plan slide outlines your strategy for launching your product and achieving market penetration. It's crucial because it shows investors how you plan to convert your vision into reality, driving adoption and growth. Here’s what you should include: Market Segmentation: Identify the specific segments of the market you will target first. Explain why these segments are your initial focus and how they will help you build momentum. Marketing Strategy: Describe your marketing tactics and channels, such as digital marketing, social media, content marketing, partnerships, and PR. Highlight how you will reach and attract your target audience. Sales Strategy: Explain your sales approach, including direct sales, online sales, channel partnerships, or a combination. Detail your sales process and how you will convert leads into customers. Distribution Channels: Outline the channels through which your product will be delivered to customers. This could include online platforms, retail partnerships, or direct shipping. Customer Acquisition: Provide a plan for acquiring and onboarding new customers. Include customer acquisition costs (CAC) and expected customer acquisition methods. Timeline and Milestones: Present a timeline of key milestones, such as product launch dates, marketing campaigns, and sales targets. This helps investors see your progress and plan for scaling. Importance The go-to-market plan is important because: Shows Preparedness: Demonstrates that you have a clear and actionable strategy for entering the market. Reduces Risk: Provides investors with confidence that you have thought through how to gain market traction, reducing perceived investment risk. Highlights Growth Path: Maps out how you will achieve growth, helping investors understand the potential return on investment. Examples Dropbox: Dropbox’s GTM plan focused on a viral growth strategy through their referral program, where users received additional storage for referring new users. This strategy effectively lowered customer acquisition costs and accelerated user adoption. Known Competitors Understanding your competitors is crucial for positioning your startup effectively in the market. This slide should provide an overview of the competitive landscape, showing investors that you are aware of existing alternatives and have a clear strategy to differentiate your product. Here’s what to include: Competitor Overview: List your main competitors, including direct and indirect ones. Briefly describe each, focusing on their strengths and market position. Competitive Analysis: Use a comparative table or chart to highlight key features, pricing, market share, and other relevant metrics. This visual aid helps investors quickly grasp how their competitors operate. Unique Value Proposition: Clearly articulate what sets your product apart. Highlight your unique features, benefits, or technological advancements that give you a competitive edge. Market Positioning: Explain how you position your product in the market relative to your competitors. Discuss your target audience and how your product better meets their needs. Barriers to Entry: Identify any barriers to entry you have established, such as patents, proprietary technology, or exclusive partnerships, which protect your market position from competitors. Importance Understanding your competitors and highlighting your unique advantages is important because: Informs Strategy: Demonstrates that you deeply understand the market and have strategically positioned your product to stand out. Builds Credibility: This shows investors that you are well-prepared and have completed your competitive landscape homework. Reduces Risk: This helps investors see that you have a plan to overcome competition, reducing perceived investment risk. Examples Uber: Uber’s pitch deck provided a clear overview of the transportation market, comparing its service to traditional taxis and other ride-sharing platforms. It emphasized its superior user experience, ease of use, and innovative pricing model. Financials and Exit Strategy The financials and exit strategy slide is vital for demonstrating the potential return on investment (ROI) to investors. This slide should detail your financial projections, funding requirements, and exit strategy. Here’s what to include: Financial Projections: Provide detailed forecasts of your revenue, expenses, and profits for the next 3-5 years. Include key financial metrics such as gross margin, net profit, and EBITDA. Funding Requirements: Specify how much funding you seek, what it will be used for, and how it will drive growth. Break down the use of funds into categories like product development, marketing, and operations. Break-even Analysis: Show when your startup is expected to break even and start generating profit. This helps investors understand the timeline for financial viability. Exit Strategy: Outline potential exit strategies, such as acquisition, merger, or IPO. Explain how and when you plan to "buy out" investors, providing them with a return on their investment. Importance Showing how you plan to buy out investors in the future is important because: Demonstrates ROI: Investors want to know how and when they will see a return on their investment. An exit strategy provides a clear path to achieving this. Reduces Risk: A well-defined exit strategy reduces the perceived risk by showing that you have thought through the end game and have realistic plans for achieving it. Builds Confidence: Financial projections and a clear exit strategy build confidence in your business acumen and the long-term viability of your startup. The Team The team slide is one of the most critical components of your pitch deck because it highlights the people behind the startup. Investors often invest in teams as much as they invest in ideas, believing that a strong, experienced, and capable team is more likely to execute the business plan successfully. Here’s what to include: Key Team Members: Introduce your core team members, including their names, titles, and roles within the company. Relevant Experience: Highlight each team member's relevant experience and expertise. Include past achievements, previous startups, industry experience, and any notable accomplishments. Complementary Skills: Show how the team’s skills complement each other. This demonstrates that your team can address various aspects of the business. Advisors and Board Members: If applicable, include key advisors and board members who bring additional expertise and credibility to the team. Importance Showing how your team is uniquely qualified to solve the problem is important because: Builds Credibility: Demonstrates that your team has the expertise and experience to execute the business plan and overcome challenges. Instills Confidence: Investors gain confidence knowing that the team can deliver on the vision and achieve the startup’s goals. Highlights Leadership: Emphasizes the leadership and strategic thinking behind the startup, making it more attractive to investors. Mitigates Risk: A strong, competent team reduces the perceived risk of the investment, as investors trust that experienced professionals are steering the company. Why Now The "Why Now" slide is essential for conveying the urgency and timeliness of your investment opportunity. This slide should explain why the current moment is the perfect time for your startup to succeed and why investors should act quickly to seize this opportunity. Here’s what to include: Market Trends: Highlight current market trends that favor adopting your product or service. This could include technological advancements, regulatory changes, or shifts in consumer behavior. Industry Growth: Provide data on your industry's rapid growth, demonstrating that now is the time to enter the market. Competitive Landscape: Explain how the competitive landscape is evolving and why your startup is uniquely positioned to capitalize on this moment. Urgency Factors: Identify any factors that make immediate action crucial, such as a limited window of opportunity, first-mover advantage, or a pressing market need. Recent Developments: Mention recent developments or milestones your startup has achieved that indicate readiness for rapid growth, such as product launches, strategic partnerships, or pilot program successes. Importance Showing that the investment is timely and the right choice is important because: Creates Urgency: Investors are more likely to act quickly if they see a time-sensitive opportunity. Demonstrating urgency helps accelerate the decision-making process. Enhances Relevance: Proving that your startup is aligned with current trends and market needs makes your business proposition more relevant and compelling. Reduces Risk: Investors feel more confident investing in a startup that is positioned to take advantage of current market conditions, reducing perceived risk. Capitalizes on Momentum: Highlighting why now is the ideal time to invest shows that your startup is poised for growth, leveraging momentum to drive success. Examples Slack: Slack’s pitch deck showcased the shift towards remote work and the growing need for effective team communication tools, demonstrating the immediate relevance and necessity of their product. Connect, Fundraise, and Update Your Investors with Visible Putting together a pitch deck is only the start of a successful fundraise. You need to find the right investors, manage conversations, and distribute your pitch deck. To get started with your next fundraise check out our investor database to help you find your investors. Looking for best practices for sharing your pitch deck? Check out our template for sharing your pitch deck here. Related resource: Tips for Creating an Investor Pitch Deck

Current Investment Landscape in 2024 The investment landscape for e-commerce startups in 2024 remains robust, albeit more competitive than in previous years. VCs continue to invest heavily in the sector, but the selection criteria have become more stringent due to evolving market dynamics and economic conditions. Key Trends and Changes 1. Economic Factors The global venture capital market saw a significant downturn in 2023, with a 35% year-over-year investment decrease​​. Although the market is gradually recovering, the total venture funding for Q1 2024 reached $66 billion, a 6% increase from the previous quarter but still a 20% decrease from the same period last year​​. Economic uncertainties, including geopolitical tensions and inflation, continue to impact investor confidence, leading to a more cautious investment approach​​​​. 2. Selectivity and Profitability With the maturing of the e-commerce market, easy growth opportunities have diminished. Startups need a clear path to profitability to attract VC attention. Investors increasingly favor startups that demonstrate strong financial health and sustainable business models​​​​. 3. Market Concentration Major players like Amazon and Alibaba continue to dominate the global e-commerce landscape. This concentration makes it challenging for new startups to compete unless they offer unique value propositions or operate in niche markets​​​​. 4. Emerging Opportunities Despite these challenges, significant opportunities remain, especially in emerging areas such as social commerce, live commerce, and B2B e-commerce. These segments are drawing considerable interest due to their potential for growth and innovation​​​​. 5. Patterns Guiding VC Investments Omnichannel Retail: Integrating online and offline shopping experiences remains a strong focus. VCs are investing in startups that enhance customer experiences through seamless omnichannel strategies. International Expansion: Startups with plans to expand into emerging markets like Asia and Latin America are attractive to VCs. These regions offer substantial growth potential due to increasing internet penetration and digital adoption​​. Direct-to-consumer (D2C) Brands: D2C brands that leverage social media and direct marketing channels continue to be prime candidates for funding. The ability to build direct customer relationships and generate data-driven insights makes these startups particularly appealing​​. Subscription Models: The stability of recurring revenue models remains attractive. Companies that successfully implement subscription services, offering consistent value to consumers, are likely to draw VC interest​​. Related resource: Top Trends and Leading VCs Investing in D2C Brands: A Comprehensive Guide for 2024 6. What Investors Want Consistent Growth: Investors seek startups with well-defined strategies that show clear scalability and robust revenue pathways. Powerful Teams: The focus is not just on the ideas but on the execution. Startups with solid and experienced teams are more likely to secure funding. Market Analysis: It is crucial to have a deep understanding of the market, competitors, and a unique selling point. To attract investors, startups must demonstrate thorough market research and a clear competitive advantage. Evolving E-commerce The future of e-commerce is set to combine the spontaneity and excitement of offline shopping with the convenience and personalization of online platforms. By leveraging AI, AR, and blockchain technologies, retailers aim to create more engaging, efficient, and sustainable shopping experiences. Offline Discovery and Online Options Recent advancements in AI and technology are significantly enhancing the offline-to-online shopping experience. Retailers are now leveraging AI to create personalized shopping experiences that mimic the serendipity of in-store discovery. AI algorithms analyze past purchases and browsing behaviors to offer tailored product recommendations, making online shopping more intuitive and engaging​​​​. One notable development is the use of augmented reality (AR) to bridge the gap between offline and online shopping. For instance, AR apps allow customers to visualize how products like furniture or clothing will look in their homes or on their bodies before making a purchase. This technology enhances the shopping experience and reduces the likelihood of returns​​. Future of E-commerce (Three Phases) the future of e-commerce is set to combine the spontaneity and excitement of offline shopping with the convenience and personalization of online platforms. By leveraging AI, AR, and blockchain technologies, retailers aim to create more engaging, efficient, and sustainable shopping experiences. 1. Discovery In 2024, new platforms and methods are revolutionizing product discovery. Social media channels like TikTok and Instagram are at the forefront, utilizing short-form videos and influencer marketing to introduce products to consumers. These platforms are essential for brands to reach new audiences and drive engagement through entertaining and informative content​​​​. Additionally, AI-driven recommendation engines are becoming more sophisticated. E-commerce sites like Amazon and Alibaba use AI to suggest products based on real-time data, such as trending items and customer preferences, enhancing the discovery phase​​. 2. Conversion Live shopping has emerged as a powerful tool for converting interest into sales. Platforms like Facebook, Instagram, and dedicated live shopping apps enable real-time interactions between sellers and buyers. This format allows customers to ask questions, see products in action, and make purchases instantly, creating a sense of urgency and trust​​. Innovations in virtual fitting rooms and chatbots also play a crucial role in the conversion phase. Virtual fitting rooms use AR to help customers see how clothes fit without trying them on physically. AI-powered chatbots provide instant customer support, guiding shoppers through their purchasing journey and promptly addressing any concerns​​. 3. Returns & Resale Improving return management and promoting sustainable shopping are critical in 2024. AI is now used to predict return patterns and optimize inventory management, ensuring returned products are restocked efficiently. Some companies are integrating blockchain technology to enhance transparency in the returns process, providing customers real-time updates on their return status​​​​. The resale market is also gaining traction, with major brands like Target and Gucci entering the space. These companies use tech-powered platforms to facilitate the sale of secondhand goods, appealing to environmentally conscious consumers and promoting a circular economy​​. AI-driven platforms assess the condition of returned items and determine their resale value, making the process seamless and efficient​​. VCs Investing in E-commerce and Marketplaces FJ Labs As put by the team at FJ Labs, “Marketplaces are the tool by which we achieve our purpose, the means to our end. We believe in entrepreneurs as solutionists to the world’s greatest challenges and VCs as the means to enabling all the amazing founders addressing the challenges of our time. At FJ Labs, we believe in human ingenuity and back it with the full weight of our resources and knowhow. This is our ultimate mission and the reason we invest in so many companies. Location: New York, United States About: FJ Labs is a stage-agnostic New York-based investment firm with a global focus. FJ Labs focuses on marketplaces and consumer-facing startups. Thesis: FJ Labs is a stage-agnostic New York-based investment firm with global focus. FJ Labs focuses on marketplaces and consumer facing startups. Investment Stages: Seed, Series A, Series B, Series C, Growth DN Capital About: DN Capital is a global early-stage venture firm, founded in 2000 and based in London, Berlin and San Francisco. We focus on Seed, Series A and select Series B opportunities in Europe and North America. We believe great tech companies can emerge across any vertical, but we focus our attention on four: Software, Fintech, Marketplaces and Consumer Internet. We have consistently backed category leaders in these verticals such as Shazam, Auto1, HomeToGo, Purplebricks, Endeca and Remitly. We use our extensive global network and financial expertise to give portfolio companies the best possible platform for growth. We are always excited to receive business plans from entrepreneurs seeking capital. So, if you have a business we need to know about, then send us your materials here. Thesis: We invest in Seed, Series A and growth-stage businesses and can support companies with up to €20m of capital. Location: Menlo Park, California Investment Stages: Pre-Seed, Seed, Series A Commerce Ventures About: E-commerce Ventures is a venture capital firm focusing on investments in the e-commerce, retail, FinTech and Insurance sectors. Thesis: We invest across a range of sub-sectors that we refer to collectively as the Commerce Continuum. These sub-sectors include retail technology, payment technology, banking technology, and insurance technology. Location: San Francisco, California Investment Stages: Seed, Series A, Series B, Growth Greenoaks About: Greenoaks is a global internet investment firm that operates in the commercial services, health tech, and B2B sectors. Location: San Francisco, California Investment Stages: Seed, Series A, Series B, Series C, Growth Adevinta Ventures About: Adevinta Ventures is the corporate VC leg within Adevinta (formerly Schibsted Marketplaces) Thesis: At Adevinta, we believe everything and everyone has a purpose in life. Our portfolio of digital brands unlock the full value in every person, place and thing by creating perfect matches on the world’s most trusted marketplaces. Location: Barcelona, Spain Investment Stages: Seed, Series A, Series B Cabra VC About: Adevinta Ventures is the corporate VC leg within Adevinta (formerly Schibsted Marketplaces) Thesis: At Adevinta, we believe everything and everyone has a purpose in life. Our portfolio of digital brands unlock the full value in every person, place and thing by creating perfect matches on the world’s most trusted marketplaces. Location: Barcelona, Spain Investment Stages: Seed, Series A, Series B Piton Capital About: Founded in 2010, Piton Capital is a venture capital and growth equity firm headquartered in London and investing in businesses with network effects. We make investments ranging from €200k to €20m and since inception have invested in over 50 businesses, primarily in Europe. Piton focuses exclusively on network effects businesses as this provide one of the few moats or forms of defensibility to achieve dominance. Thesis: Investing in companies with network effects. Location: London, England, United Kingdom Investment Stages: Series A, Series B, Early Stage Dutch Founders Fund About: The Dutch Founders Fund (DFF) is an early-stage VC that primarily invests in marketplaces and network effects across Europe. Our fund is founded by founders, for founders. We look beyond spreadsheets and resolve early-stage growth-pains with lightning speed. Ready to scale together? Submit your pitch deck to basrieter@dutchfoundersfund.com Location: Amsterdam, Netherlands Investment Stages: Early Stage, Pre-Seed, Seed GGV Capital As put by their team, “GGV Capital is a global venture capital firm focused on multi-stage, sector-focused investments. Recognizing that the talent to build great companies can come from anywhere, the firm invests in founders building category-leading companies around the world.” Location: Menlo Park, California, United States About: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai, and Beijing. We have been partnering with leading technology entrepreneurs for the last 18 years from seed to pre-IPO. With $3.8 billion in capital under management across eight funds, GGV invests in globally minded entrepreneurs in social/internet, commerce/new retail, frontier tech, and enterprise/SaaS. GGV has invested in over 280 companies with more than 30 companies valued at more than $1 billion. Investment Stages: Series A, Series B Kleiner Perkins As put by the team at Kleiner Perkins, “For five decades we have partnered with intrepid founders to build iconic companies that made history. Today, Kleiner Perkins continues that legacy, investing in founders with bold ideas that span industries and continents, partnering with them from inception to IPO and beyond to maximize the potential of their ideas… and make history.” Location: Menlo Park, California, United States About: Kleiner Perkins is a venture capital firm specializing in investing in early-stage, incubation, and growth companies. Thesis: To be the first call for founders who want to make history and to partner with them as company builders in pursuit of that goal. Investment Stages: Series A, Series B, Growth Lyra Ventures As put by the team at Lyra Ventures, “We are venture capitalists investing in companies that use innovative technology to reinvent the business of fashion and retail. Our team and network of advisors have deep domain expertise in our industries of focus. We channel this knowledge into each of our investments, working alongside our founders, particularly early on in their company’s lifecycle.” Location: Singapore, SG About: We are venture capitalists investing in companies that use innovative technology to reinvent the business of fashion and retail. Our team and network of advisors have deep domain expertise in our industries of focus. We channel this knowledge into each of our investments, working alongside our founders, particularly early on in their company’s lifecycle. Thesis: We support visionary and disciplined entrepreneurs who are transforming the industries of fashion and retail via the creation of high growth and resilient businesses. Investment Stages: Seed, Series A 14W As put by the 14W Team, “Founded in 2010, 14W is a global venture capital firm with offices located in New York, London, and Madrid. The firm seeks to invest in the consumer internet, e-commerce, consumer packaged goods, marketplace, and media sectors.” Location: New York, New York, United States About: 14W is a venture capital firm specializing in consumer internet, marketplace, ecommerce, CPG, and media. Investment Stages: Seed PayU Location: Poznań, Wielkopolskie, Poland About: PayU is a leading financial services provider in global growth markets. We enable billions of people to buy and sell online. Thesis: One of the leading fintech investors globally, combining the expertise of high growth companies with our own unique local knowledge and technology to ensure that our customers have access to the best financial services. Investment Stages: Seed, Series A, Series B Act Venture Capital As put by the team at Act, “We believe great companies are built by great founders, not investors. We have never been the loudest venture firm. We don’t want to add to the noise of VCs making it about them – it is about the founders and the problems they are trying to solve.” Location: Dublin, Ireland About: ACT is Ireland’s leading independent venture capital company and they have a very experienced and successful investment team. They provide capital to growth-oriented private companies in the range of €750K to €15M. Larger sums can be provided in syndication with their institutional investors. In December 2002, ACT closed its third fund at €170 million. ACT now manages €350 million through a number of venture capital funds. Thesis: Investing in people, markets and technology. Investment Stages: Seed, Series A, Series B, Series C, Growth Activant Capital As put by their team, “We typically invest when two things come together. First, the company has the potential to achieve escape velocity and transform an entire industry. Second, we believe the founders can lead the company through hyper growth, and our support can significantly increase the probability of this success.” Location: Connecticut, United States About: Act VC is an early-stage venture capital firm that partners with founders starting out, and established teams scaling their growth. We have raised €487m across multiple funds to support this goal. We look for innovative, category-defining companies in large markets. We help founders build and scale these leveraging the experience of backing over 200 founders before. We work closely with them in this process. Over the past 25 years, we have invested in over 120 companies and built a broad global network. Investment Stages: Series A, Series B, Series C Ascend Location: Washington, United States About: Pre-seed investor in marketplace, e-commerce/D2C, and B2B software startups in the Pacific Northwest. Investment Stages: Pre-Seed A.Capital As put by their team, “Unlike traditional VCs, we do not have ownership thresholds. We work with entrepreneurs to determine how much to invest, and at what valuation, based on what their company needs, not based on historical VC financial models. This reduces overall dilution while still leaving room for value-added partners.” Location: Menlo Park, California, United States About: a_capital provides resources and counsel to the creators, inventors and entrepreneurs who are building a new future. Thesis: Investing in consumer and enterprise technology companies. Investment Stages: Seed, Series A, Series B, Series C, Growth Lerer Hippeau As put by their team, “Lerer Hippeau is an early-stage venture capital fund founded and operated in New York City. We invest in good people with great ideas who redefine categories — and create new ones entirely.” Location: New York About: Lerer Hippeau is a seed and early-stage venture capital fund based in New York City. Investment Stages: Lerer Hippeau invests in companies from seed to Series C Tandem Capital About: Tandem Capital is a seed-stage venture fund and studio helping drive go-to-market innovation. Our studio helps companies craft business strategies, build brands, acquire customers and extend distribution channels. Our dedicated studio team engages deeply with a company’s business, to help find product-market fit and accelerate early growth. The studio provides support primarily to businesses selling products and services directly to individuals, including: connected devices, consumer packaged goods and subscription services. Thesis: Our fund backs stellar teams whose innovation extends beyond their products into how they acquire their customers, develop their distribution channels and build their overall brands. Tandem leads and co-leads rounds with up to $500K in pre-seed and up to $2M in seed funding. We reserve a significant amount of capital in order to support our founder long-term through follow-on funding. Location: San Mateo, California Investment Stages: Pre-Seed, Seed Launch Location: San Francisco, California, United States About: We are on a mission here at LAUNCH to support founders and inspire innovation. Our small team of rebels put on the largest startup conference in the world, the LAUNCH festival, the podcast This Week In Startups and we run the LAUNCH Incubator. We invest millions of dollars into 40 promising founders a year, some of which go on to change the world. Most of these founders spend 12 weeks in our very intense -- but fabulously fun -- accelerator. Investment Stage: Accelerator Imag/nary Ventures Location: New York, United States About: Founded by Natalie Massenet and Nick Brown, Imaginary Ventures is venture capital firm that invests in early–stage opportunities at the intersection of retail and technology in Europe and the US. Investment Stage: Seed, Series A, Series B Act One Ventures Location: Seattle, Washington, United States About: Seed stage fund focused on enterprise software and research from LA Universities. We believe in community, diversity, and Los Angeles. Thesis: Investing in capital-efficient companies with excellent founder-market fit Investment Stage: Pre-Seed, Seed Acequia Capital Location: Seattle, Washington, United States About: Acequia Capital is focused on advising early stage founders and teams that have passion and conviction about the power of software. Investment Stage: Pre-Seed, Seed Arbor Ventures Location: Singapore About: Founded in 2013, Arbor Ventures is a global investment firm focused on companies that leverage advanced technologies such as artificial intelligence, cloud computing, composable service offerings and blockchain applications to facilitate, broaden or fundamentally change the way financial services are served, consumed, and managed. Arbor uses its global vantage point, extensive network and deep sector knowledge to identify key trends and partner closely with leading entrepreneurs to build transformational companies. Investment Stage: Seed, Series A, Series B, Series C BECO Capital Location: Dubai, United Arab Emirates About: BECO Capital provides growth capital and hands-on operational support for early-stage technology companies. Investment Stage: Seed, Series A, Series B Additional Resources 4 trends that will define e-commerce in 2022 Personalization and zero-party data become critical. E-commerce embraces web3 and NFTs, but what will that look like? Live shopping goes mainstream. Slow but gradual improvement to the supply chain. Jungle Scout is an eCommerce platform that helps entrepreneurs leverage Amazon to sell products. Their platform offers customers solutions to manage inventory, conduct product research, find suppliers, and more. Though the company is mainly Amazon-centric now, they are eyeing expansion to cover solutions for other online retail platforms, such as Walmart.com. Consumer Trends Report | Q1 2022 The State of the Amazon Seller Society Brands– Society Brands embraces the entrepreneur and provides them with a network of support and a rich pool of industry-leading resources to help them take their brands to the next level and create real value for a great exit. Elevate Brands– A New York- and Austin-based startup that acquires and runs third-party Amazon merchants. Berlin Brands Group (BBG)- One of the new wave of e-commerce startups hoping to build lucrative economies of scale around buying up smaller brands that sell on marketplaces like Amazon and using technology to run and scale them more efficiently. 20 Fast-Growing Ecommerce Startups (2022) Our Guide to E-Commerce Metrics (with Google Sheet Template) Key Metrics to Track and Measure In the eCommerce World Video: Shopify Ecommerce Dashboard Start Your Next Round with Visible We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey. Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VC’s and accelerators who are looking to invest in companies like you. Check out all our investors here and filter as needed. After learning more about them with the profile information and resources given you can reach out to them with a tailored email. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors. After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here. Related resource: 14 FinTech Startups Shaping the Future of Finance

Starting a new venture involves navigating numerous challenges, one of which is effectively communicating your business vision. Two essential tools in this process are the business plan and the pitch deck. While both are crucial, they serve different purposes and are used at different stages of your startup journey. In this article, we'll explore the key differences between business plans and pitch decks, what each includes, the level of detail required, the creation process, and specific use cases. Understanding these distinctions will help you use each tool to your advantage, ensuring you’re well-prepared to impress investors and guide your business to success. Business Plans vs Pitch Decks - An Overview When raising capital for your startup, both business plans and pitch decks are essential tools, each serving distinct purposes. A business plan is a detailed document outlining your business’s objectives, strategies, market analysis, and financial projections. It provides a comprehensive roadmap for your business, guiding long-term strategic decisions and demonstrating viability to stakeholders such as banks and grant providers. In contrast, a pitch deck is a concise, visually-driven presentation designed to quickly capture the interest of potential investors. It typically includes key highlights of your business, such as the problem you’re solving, your solution, market opportunity, business model, and team. The goal is to secure meetings and generate interest from venture capitalists, angel investors, and during startup competitions. Both tools are crucial in fundraising, but they are used at different stages and for different audiences. Business Plan A business plan is a comprehensive document that outlines your business's objectives, strategies, market analysis, organizational structure, and financial projections. Its primary purpose is to serve as a detailed roadmap for your business, guiding strategic decisions and demonstrating the viability and potential of your venture to various stakeholders. The business plan is essential for several key reasons: Securing Funding: It provides potential investors, banks, and grant providers with an in-depth understanding of your business model, financial forecasts, and strategic plans, helping to secure necessary funding. Strategic Planning: It acts as a guide for internal decision-making, helping founders and management teams align on goals and strategies. Attracting Talent: A well-articulated business plan can attract co-founders, key hires, and partners by clearly outlining the business's vision and potential. Use cases for a business plan include applying for loans, pitching to investors, and guiding internal strategy development. Each of these scenarios relies on the detailed and structured information that a business plan provides, making it an indispensable tool for startup founders. Related resource: Startup Business Plan Pitch Deck A pitch deck is a concise, visually-driven presentation designed to quickly capture the interest of potential investors. It typically consists of around 10-20 slides that highlight the key aspects of your business, such as the problem you’re solving, your solution, market opportunity, business model, and team. The primary purpose of a pitch deck is to provide a snapshot of your business that is engaging and easy to understand, aiming to secure meetings and generate interest from potential investors. Unlike the comprehensive nature of a business plan, a pitch deck is meant to be high-level and visually appealing, making it an effective tool for initial presentations. Use cases for a pitch deck include: Investor Meetings: Pitching to venture capitalists and angel investors to secure funding. Startup Competitions: Presenting at demo days and competitions to gain exposure and interest. Partnership Discussions: Engaging potential partners and stakeholders by providing a clear and compelling overview of your business. The pitch deck serves several important functions: Generating Interest: It is designed to grab the attention of venture capitalists, angel investors, and other stakeholders, encouraging them to seek more detailed information. Communicating Vision: The pitch deck helps convey your business idea succinctly, showcasing the problem you’re solving, your solution, and your unique selling points. Facilitating Meetings: A compelling pitch deck can lead to follow-up meetings, providing opportunities to delve deeper into your business plan and financials. Related resource: Building Your Pitch Deck What is Included in Each One Understanding the structure and key components of business plans and pitch decks is crucial for effectively using each tool in your fundraising efforts. A detailed and comprehensive business plan covers elements such as market analysis, financial projections, and strategic planning. In contrast, a pitch deck is concise and visually engaging, highlighting key aspects like the problem you’re solving, your solution, and your business model. This section will provide an overview of what to include in each, highlighting the differences to help you tailor them to your needs. Business Plan A business plan is a detailed and comprehensive document that covers various aspects of your business. Key components typically include: Executive Summary: A brief overview of your business, including your mission statement, product or service offering, and basic information about your company’s leadership, employees, and location. Company Description: Detailed information about your business, including the problems you’re solving, your target market, and what makes your business unique. Market Analysis: An examination of your industry, market size, expected growth, and competitive landscape. Organization and Management: An outline of your business’s organizational structure, details about the ownership, and profiles of your management team. Products or Services Line: Detailed descriptions of your products or services, including the lifecycle of each product, and how they benefit your customers. Marketing and Sales Strategy: Your plan for reaching your target market, including pricing, advertising, and sales strategies. Funding Request: If you’re seeking funding, this section outlines your current funding requirements, future funding requirements over the next five years, and how you intend to use the funds you receive. Financial Projections: Detailed financial forecasts, including income statements, cash flow statements, and balance sheets for the next three to five years. Appendix: An optional section that includes resumes, permits, lease agreements, legal documentation, and other pertinent information. Pitch Deck A pitch deck is a more concise and visual presentation focusing on highlighting your business's key aspects. Key components typically include: Title Slide: The name of your business and a tagline or short mission statement. Problem Statement: A description of the problem your business aims to solve. Solution: An overview of your product or service and how it addresses the problem. Market Opportunity: Information on your target market and the potential market size. Business Model: An explanation of how your business will make money. Traction: Evidence of your business’s progress and momentum, such as sales figures, customer testimonials, or user growth metrics. Competition: An analysis of your competitors and your competitive advantages. Go-to-Market Strategy: Your plan for attracting and retaining customers. Financials: High-level financial projections and key metrics. Team: Information about your founding team and key advisors. Use of Funds: How you plan to use the investment you’re seeking. Closing Slide: A summary of your pitch and a call to action, often including your contact information. Related resource: Key Slides In Your Pitch Deck Each of these components plays a crucial role in communicating the essential aspects of your business to different audiences. While the business plan is thorough and detailed, the pitch deck is designed to be engaging and to the point, helping you quickly capture the interest of potential investors. What Level of Detail is Needed for Each One? Business plans and pitch decks differ significantly in the level of detail they require. Business plans are comprehensive and detailed, covering strategic projections and in-depth analyses. In contrast, pitch decks are high-level, focusing on engaging visuals and key highlights to quickly capture investor interest. Business Plan A business plan requires a high level of detail to comprehensively outline your business’s strategic vision, operational structure, and financial projections. Each component must be thoroughly developed to provide a clear roadmap for the business and demonstrate its potential to stakeholders. Here's a breakdown of the required level of detail for each key component: Executive Summary: This section should offer a concise yet comprehensive snapshot of your business, including your mission statement, the products or services you offer, and basic company information such as leadership, employees, and location. While brief, it should be compelling enough to attract further interest. Company Description: This part should delve deeply into your business, explaining the problems you're solving, your target market, and what makes your business unique. It should provide a clear picture of your business’s purpose and the value it offers to customers. Market Analysis: This section should include in-depth research on your industry, including market size, expected growth, and trends. A detailed competitive analysis is also crucial, highlighting your competitors' strengths and weaknesses and how you plan to differentiate your business. Organization and Management: Provide detailed profiles of your management team, including their backgrounds, expertise, and roles within the company. An organizational structure chart can be helpful here, showing how different roles and departments interrelate. Products or Services Line: Offer detailed descriptions of your products or services, including their lifecycle, development stages, and benefits to customers. Explain how your offerings meet the needs of your target market and any plans for future development or expansion. Marketing and Sales Strategy: This section should outline your strategies for reaching your target market, including pricing models, advertising plans, sales tactics, and distribution channels. Be specific about how you will attract and retain customers, including any partnerships or collaborations. Funding Request: If you are seeking funding, clearly outline your current and future funding needs, specifying how much you need, how you plan to use the funds, and any future funding requirements over the next five years. Provide a clear plan for how the funds will help achieve your business goals. Financial Projections: Provide detailed financial forecasts, including income statements, cash flow projections, and balance sheets for at least the next three to five years. This section should demonstrate your business’s financial viability and growth potential, with assumptions clearly stated. Appendix: Include any additional documents that support your business plan, such as resumes, permits, legal documentation, market research data, and any other relevant materials. The appendix should provide supporting evidence for the claims and projections made in your business plan. Each of these components should be well-researched and thoroughly explained, offering a clear and detailed picture of your business and its potential. A comprehensive business plan not only helps in securing funding but also guides strategic decision-making and helps attract key partners and talent. Pitch Deck A pitch deck requires a concise yet engaging level of detail to capture the interest of potential investors and stakeholders effectively. Each component should be clear, visually appealing, and focus on the key highlights of your business. Here’s an outline of the necessary components and the level of detail required: Title Slide: Include your business name, logo, and a brief tagline or mission statement. This slide should set the tone and provide a quick grasp of your business identity. Problem Statement: Clearly and succinctly describe the problem your business aims to solve. Use visuals or anecdotes to illustrate the problem’s significance and relevance to your target market. Solution: Provide an overview of your product or service and explain how it addresses the problem. Highlight the unique aspects of your solution and how it stands out from existing alternatives. Market Opportunity: Present key information about your target market, including market size, growth potential, and trends. Use charts or graphs to make the data visually compelling and easy to understand. Business Model: Explain how your business will make money. Include details on your revenue streams, pricing strategy, and any monetization plans. Keep it straightforward but comprehensive enough to show viability. Traction: Highlight your business’s progress and milestones. This could include sales figures, user growth, partnerships, or any significant achievements. Use visuals like charts or graphs to showcase your momentum. Competition: Provide a brief analysis of your competitors and articulate your competitive advantages. Use a comparison chart to highlight how your business outperforms or differentiates from others in the market. Go-to-Market Strategy: Outline your plan for attracting and retaining customers. Include marketing and sales strategies, distribution channels, and any partnerships that will help you reach your target market effectively. Financials: Summarize your key financial projections and metrics. Include revenue forecasts, profit margins, and break-even analysis. Use simple charts or graphs to make the data accessible and impactful. Team: Introduce your founding team and key advisors. Highlight their relevant experience and roles within the company. Use photos and brief bios to humanize your team and build credibility. Use of Funds: Explain how you plan to use the investment you’re seeking. Provide a clear and specific breakdown of how the funds will be allocated to drive growth and achieve your business goals. Closing Slide: Summarize your pitch and include a call to action. Provide your contact information and invite investors to follow up for more detailed discussions. Each component should be crafted to deliver maximum impact with minimal text, using visuals to convey key points effectively. The goal is to engage your audience, provide a compelling snapshot of your business, and secure further interest or meetings. What Does It Take to Create Each One? Creating a business plan and a pitch deck requires different approaches due to their distinct design, data, and storytelling requirements. Understanding the process for building each will help you allocate the necessary resources and time effectively. Business Plan Building a business plan is a detailed and collaborative effort that involves: Extensive Research: In-depth market analysis, competitive landscape assessment, and financial forecasting. Cross-Department Collaboration: Input from finance, marketing, operations, and management teams to ensure accuracy and comprehensiveness. Detailed Documentation: Crafting a thorough narrative with strategic projections and detailed analyses. The process is time-intensive, typically taking several weeks to a few months, depending on the business complexity and data availability. Pitch Deck Creating a pitch deck is a more streamlined process that emphasizes: High-Level Research: Gathering essential data on market size, competition, and key financial metrics. Visual Design: Collaborating with designers to create engaging and visually appealing slides or using templates that make designing easier such as canva or pitch. Concise Storytelling: Developing a compelling, succinct narrative highlighting the business’s value proposition and growth potential. This process is quicker, usually taking a few days to a couple of weeks, depending on the need for iterations and design work. Understanding these differences ensures you allocate the right resources and time for each document, aligning with their specific purposes and audiences. Use Cases for Business Plans and Pitch Decks Understanding when to use a business plan versus a pitch deck is crucial for effectively communicating your business vision and securing stakeholder support. Here are specific situations where each document would be most effective. Business Plan Securing Bank Loans: A detailed business plan is essential when applying for a bank loan. It provides lenders with comprehensive information about your business model, financial projections, and market analysis, demonstrating your ability to repay the loan and manage financial responsibilities effectively. Internal Strategic Planning: A business plan guides internal decision-making and strategic planning. It helps align the management team on long-term goals, operational strategies, and resource allocation, ensuring everyone is working towards the same objectives. Attracting Key Hires and Partners: A well-structured business plan can attract top talent and potential business partners by clearly outlining the business’s vision, growth potential, and strategic direction. It provides a detailed understanding of the company’s mission and future prospects, making it an attractive opportunity for skilled professionals and collaborators. Pitch Deck Investor Meetings: A pitch deck is perfect for pitching to venture capitalists and angel investors. Its concise, visually engaging format quickly captures the interest of potential investors, providing an overview of your business, the problem you’re solving, and your market opportunity, leading to follow-up meetings and deeper discussions. Startup Competitions: During startup competitions and demo days, a pitch deck is essential. It succinctly presents your business idea, traction, and competitive edge, helping you stand out in a crowded field and attract potential investors or partners who attend these events. Initial Partnership Discussions: When initiating discussions with potential partners, a pitch deck effectively communicates your business’s value proposition and strategic fit. It offers a compelling snapshot of your business, encouraging partners to explore collaboration opportunities further. By understanding these use cases, you can strategically utilize business plans and pitch decks to engage different audiences and achieve your business objectives effectively. Tailor Your Business Plan and Pitch Decks to Your Needs with Visible Both business plans and pitch decks are essential tools for startup founders, each serving distinct purposes and requiring different levels of detail. A business plan provides a comprehensive roadmap for strategic planning and securing funding, while a pitch deck is a concise, visually engaging presentation designed to capture investor interest quickly. Share your pitch deck confidently with Visible, a purpose-built platform for fundraising. Our pitch deck sharing tool is completely integrated with our fundraising CRM and investor updates platform. Founders can also leverage their brand by hosting decks from their own domain and highlighting brand colors. Try Visible free for 14 days and start strengthening your investor connections.

Mastering the art of the pitch is crucial for any startup founder. Whether seeking investment, landing new customers, or forming strategic partnerships, having the right pitch deck can make all the difference. In this article, we'll explore six essential types of pitch decks every startup needs, each tailored to different audiences and situations. Discover how to craft compelling decks that resonate and drive results, from elevator pitches to detailed investor presentations. Prepare to elevate your pitching game and ensure you're always prepared to impress. Reasons to Have Multiple Pitch Decks As a startup founder, you’ll find yourself pitching your business to various audiences with unique interests and needs. Relying on a single pitch deck for all these situations can be a major drawback. Here’s why having multiple pitch decks is crucial for your success: Tailoring Your Message: Different audiences care about different aspects of your business. Investors want to see your financials, market opportunity, and growth strategy. Potential partners are interested in synergies and shared goals, while customers focus on how your product solves their problems. A one-size-fits-all approach dilutes your message, making it less impactful. By creating tailored decks, you can emphasize the most relevant information for each audience. Maximizing Engagement: When your pitch resonates with the audience's specific concerns, you’re more likely to keep their attention and spark interest. A well-targeted pitch shows that you understand their priorities and have taken the time to address them directly. This level of personalization can significantly increase your chances of securing investment, partnerships, or sales. Building Credibility: A customized pitch deck demonstrates professionalism and preparedness. It signals your audience that you’re serious about your business and have done your homework. This can build trust and credibility, essential factors when persuading investors or partners to commit to your venture. Adapting to Different Scenarios: Pitching is not a one-time event. You’ll need to present your business in various contexts, from quick elevator pitches to detailed investor meetings and product demos. Each scenario requires a different approach. Multiple pitch decks allow you to be agile and adaptable, ready to impress no matter the situation. Related resource: Board Deck Types of Pitch Decks Your Team Should Prepare To navigate the diverse landscape of pitching scenarios, your startup needs a suite of specialized pitch decks. Each deck serves a unique purpose and is tailored to resonate with specific audiences. Tailoring your pitch is crucial because different stakeholders have different priorities and concerns. Preparing specific decks for various situations ensures that your message is always relevant, compelling, and impactful. Each pitch deck allows you to focus on the aspects that matter most to your audience, making your presentation more effective and persuasive. Here’s a brief introduction to the types of pitch decks your team should prepare: Elevator Pitch Deck: This concise deck is designed for quick, impromptu pitches, where you need to grab attention and spark interest within a few minutes. Investor Pitch Deck: Tailored for potential investors, this deck delves deep into your business model, market opportunity, financial projections, and growth strategy. Sales Pitch Deck: Created to persuade potential customers or clients, this deck highlights the benefits and features of your product or service. Partnership Pitch Deck: This deck focuses on forming strategic alliances by highlighting mutual benefits, synergies, and shared goals. Demo Pitch Deck: A highly visual and interactive deck, used to showcase your product in action, emphasizing its functionality and user experience. Customer Pitch Deck: Aimed at converting leads into customers, this deck addresses customer pain points and presents your solution convincingly. In the following sections, we’ll dive deeper into each type of pitch deck, exploring their purposes, key components, and when to use them. Elevator Pitch Deck Definition: An elevator pitch deck is a concise and highly focused presentation designed to quickly communicate the essence of your startup. It typically consists of a few slides and can be delivered in the time it takes to ride an elevator—around 30 seconds to 2 minutes. Purpose: The primary purpose of the elevator pitch deck is to grab the audience's attention and spark their interest in your startup. It serves as an introduction to your business, providing just enough information to make the listener want to learn more. Key Components: Introduction: A brief introduction to your startup, including the name and tagline. Problem Statement: A clear and concise explanation of the problem your startup addresses. Solution: An overview of your product or service and how it solves the problem. Value Proposition: A summary of the unique value your startup offers. Call to Action: A prompt for the next steps, such as setting up a meeting or requesting further information. When to Use It: The elevator pitch deck is ideal for impromptu or brief interactions where you have limited time to make an impression. This includes: Networking events Casual conversations with potential investors or partners Initial introductions at conferences or trade shows Any situation where you need to quickly convey the essence of your startup and pique interest By having a well-crafted elevator pitch deck ready, you can ensure that you’re always prepared to make a strong first impression, no matter how spontaneous the opportunity may be. Related resource: Teaser Deck Investor Pitch Deck Definition: An investor pitch deck is a detailed presentation designed to provide potential investors with a comprehensive overview of your startup. This deck delves into the critical aspects of your business, including your market opportunity, financial projections, and growth strategy. Purpose: The main purpose of the investor pitch deck is to secure funding from venture capitalists, angel investors, or other financial backers. It aims to convince investors that your startup is a viable and lucrative investment opportunity. Key Components: Introduction: Briefly introduce your startup, including its name and a compelling tagline. Problem Statement: Clearly articulate the problem your startup addresses and why it matters. Solution: Provide a detailed explanation of your product or service and how it solves the identified problem. Market Opportunity: Present data on the size of your target market, growth potential, and market trends. Business Model: Explain how your startup plans to make money, including revenue streams and pricing strategy. Traction: Showcase any early successes, such as user growth, sales figures, partnerships, or pilot projects. Competitive Analysis: Identify your main competitors and highlight your competitive advantages. Financial Projections: Provide detailed financial forecasts, including projected revenue, expenses, and profitability. Team: Introduce your core team members, emphasizing their expertise and relevant experience. Funding Requirements: Specify how much funding you are seeking and how you plan to use the capital. Call to Action: Encourage investors to take the next step, such as scheduling a follow-up meeting or conducting due diligence. When to Use It: The investor pitch deck is used during formal presentations to potential investors. This can occur in various settings, including: Venture capital pitch meetings Angel investor gatherings Startup accelerators and incubators Investment competitions and demo days By preparing a well-structured and persuasive investor pitch deck, you can effectively communicate the potential of your startup and attract the funding needed to scale and grow your business. Related resource: Seed Round Pitch Deck Sales Pitch Deck Definition: A sales pitch deck is a presentation designed to persuade potential customers or clients to purchase your product or service. It focuses on highlighting the value and benefits your offering brings to the customer, showcasing how it solves their specific problems. Purpose: The primary purpose of the sales pitch deck is to convert leads into paying customers by demonstrating the value and effectiveness of your product or service. It aims to build trust and convince the audience that your solution is the best fit for their needs. Key Components: Introduction: Briefly introduce your startup and what you offer, including a compelling tagline. Problem Statement: Clearly articulate the customer's pain points and the problems they are facing. Solution: Explain how your product or service addresses these pain points and solves the problem effectively. Value Proposition: Highlight the unique benefits and value your solution provides to the customer. Product Features: Provide a detailed overview of the key features and functionalities of your product or service. Customer Testimonials: Include testimonials or case studies from satisfied customers to build credibility and trust. Use Cases: Demonstrate how different customers or industries use your product to achieve specific outcomes. Pricing: Outline your pricing model and any available packages or options. Call to Action: Encourage the audience to take the next step, such as signing up for a demo, starting a trial, or making a purchase. When to Use It: The sales pitch deck is used during interactions with potential customers or clients. This includes: Sales meetings and presentations Product demonstrations Follow-up meetings after initial interest Trade shows and industry conferences By having a well-prepared sales pitch deck, you can effectively communicate the value of your product, address any concerns, and persuade potential customers to take action and make a purchase. Partnership Pitch Deck Definition: A partnership pitch deck is a presentation designed to secure strategic alliances with other businesses. It focuses on highlighting the mutual benefits of a partnership, emphasizing how collaboration can drive growth and achieve shared objectives. Purpose: The primary purpose of the partnership pitch deck is to persuade potential partners that a collaboration will be mutually beneficial. It aims to demonstrate how working together can create synergies, unlock new opportunities, and deliver value to both parties. Key Components: Introduction: Briefly introduce your startup and what you offer, including a compelling tagline. Partnership Opportunity: Clearly articulate the rationale for the partnership and the specific goals you aim to achieve together. Mutual Benefits: Highlight the key benefits for both parties, such as increased market reach, shared resources, and enhanced product offerings. Market Opportunity: Present data on the market size, growth potential, and how the partnership can capitalize on these opportunities. Value Proposition: Explain the unique value each partner brings to the table and how combining strengths can create a competitive advantage. Synergies: Identify areas where the partnership can create synergies, such as technology integration, distribution channels, or customer base expansion. Case Studies: Include examples of successful partnerships or collaborations that have yielded positive results. Implementation Plan: Outline a high-level plan for how the partnership will be executed, including key milestones and responsibilities. Call to Action: Encourage the potential partner to take the next step, such as setting up a detailed discussion or signing a memorandum of understanding (MOU). When to Use It: The partnership pitch deck is used during meetings with potential partners. This includes: Initial discussions with companies you want to collaborate with Negotiations to finalize partnership terms Presentations at industry events where strategic alliances are sought Follow-up meetings to refine partnership details By preparing a well-structured partnership pitch deck, you can effectively communicate the potential of the collaboration, address any concerns, and persuade potential partners to move forward with the partnership. Demo Pitch Deck Definition: A demo pitch deck is a highly visual and interactive presentation designed to showcase your product in action. It emphasizes the functionality, features, and user experience of your product through live demonstrations or detailed walkthroughs. Purpose: The primary purpose of the demo pitch deck is to demonstrate the capabilities and benefits of your product firsthand. It aims to give the audience a clear understanding of how the product works and how it can solve their specific problems or enhance their operations. Key Components: Introduction: Briefly introduce your startup and what you offer, setting the stage for the demo. Product Overview: Provide a high-level overview of your product, highlighting its main features and functionalities. Live Demonstration: Conduct a live demo or show a video walkthrough of your product in action, focusing on key use cases. User Interface: Highlight the user interface and user experience, demonstrating how intuitive and easy-to-use your product is. Key Features: Dive deeper into the standout features of your product and explain how they address specific customer needs. Use Cases: Present real-world examples or scenarios where your product has been successfully used to solve problems or improve processes. Customer Testimonials: Include testimonials or case studies from satisfied customers who have benefited from using your product. Call to Action: Encourage the audience to take the next step, such as signing up for a trial, requesting a personalized demo, or making a purchase. When to Use It: The demo pitch deck is used during product demonstrations and interactive presentations. This includes: Product demo meetings with potential customers or clients Trade shows and industry conferences where live demos are expected Sales presentations where the audience needs to see the product in action Webinars or online demos conducted for a broader audience By preparing a compelling demo pitch deck, you can effectively showcase the strengths of your product, engage your audience, and persuade potential customers of its value. Customer Pitch Deck Definition: A customer pitch deck is a presentation aimed at converting leads into paying customers. It focuses on addressing the specific pain points of potential customers and presenting your product or service as the ideal solution to their problems. Purpose: The primary purpose of the customer pitch deck is to persuade potential customers to purchase your product or service. It aims to build a strong case for why your offering is the best fit for their needs, highlighting the benefits and unique value propositions. Key Components: Introduction: Briefly introduce your startup and what you offer, setting the context for the presentation. Problem Statement: Clearly articulate the pain points and challenges faced by the customer that your product or service addresses. Solution: Explain how your product or service effectively solves these problems, highlighting its unique features and benefits. Value Proposition: Emphasize the unique value your product or service brings to the customer, differentiating it from competitors. Product Features: Provide a detailed overview of the key features and functionalities of your product or service. Customer Testimonials: Include testimonials or case studies from satisfied customers who have benefited from your offering. Use Cases: Present real-world examples or scenarios where your product has been successfully used to solve problems or improve processes. Pricing: Outline your pricing model and any available packages or options, making it easy for the customer to understand the cost. Call to Action: Encourage the audience to take the next step, such as signing up for a trial, requesting a demo, or making a purchase. When to Use It: The customer pitch deck is used during interactions with potential customers who are in the decision-making phase. This includes: Sales meetings and presentations Follow-up meetings after initial interest has been shown Product demonstrations tailored to specific customer needs Webinars or online presentations aimed at converting leads By preparing a compelling customer pitch deck, you can effectively communicate the value of your product, address any concerns, and persuade potential customers to take action and make a purchase. Get Templates, Tips, and Connect with Potential Investors with Visible Mastering the art of the pitch is essential for any startup founder. You can ensure your message resonates with each audience by preparing multiple tailored pitch decks—such as elevator, investor, sales, partnership, demo, and customer decks. This targeted approach maximizes engagement, builds credibility, and enhances your chances of achieving your business goals. Share your pitch deck confidently with Visible, a purpose-built platform for fundraising. Our pitch deck sharing tool is completely integrated with our fundraising CRM and investor updates platform. Founders can also leverage their brand by hosting decks from their own domain and highlighting brand colors. Try Visible free for 14 days and start strengthening your investor connections.