Going far enough back into the history of investing, you needed a comprehensive business plan to raise funding from institutional investors. The Harvard Business Review has a great guide to how to create one. The exact details of what goes into a business plan vary but often include history, market analyses, strategy, product and service descriptions, org charts, competitive analyses, management team, financial plans and projections, along with all the research to back up each section. That’s all good and well, but by the time you’ve completed all of that, your business plan has ballooned to a novel’s worth of pages — and that’s before you add in all the graphics and charts. Business plans are great for teaching you business basics and dynamics, and mistakes in a business plan are a great way to show would-be entrepreneurs how to avoid problems before they happen. The problem is that it will be out of date before the ink is dry, and the financials will be inaccurate long before you even hit “print.” It isn’t that startups operate on different dynamics than other businesses, but they are essentially the agile equivalents of the old dinosaurs. Build it, test it, iterate. Essentially, startups are the equivalent of how software is built these days: Rather than spending six months writing out a full product spec that’ll be wrong before you write a single line of code, you launch a lean MVP version of the product and adjust from there. There were a few advocates for doing business plans differently, including Guy Kawasaki, whose “you only need 10 slides” argument may be a little too far into deep minimalism, but at least it was more helpful for weaving a pitch narrative than a 90-page business plan. In short: The pitch deck was to the business plan what agile software development was to waterfall software development. From there, the market evolved further, and some founders chose not to use a deck at all. “The story is super important,” said Tom Hacohen, the CEO of webhooks-as-a-service company Svix, who recently raised a round of financing from Andreessen Horowitz without using a deck. “Investors are not webhook experts, so they have to understand the story. To do that, we had to tell a great story — and when we did that, they really started digging into the business. They understood our metrics and started talking to a good chunk of our customers. At that point, the deck is just going to help me walk them through what they already know.” Let’s walk through how to tell the story of your company without relying on a deck!
Do you need a deck to raise from VCs? Not always by Haje Jan Kamps originally published on TechCrunch