If your company has made it past seed funding and a series A round and is at the point that a series B fundraising round is looking necessary and appropriate, this is quite a big step. Both the stakes and expectations increase with every round of funding, so companies need to ensure they are really ready to make this leap. While seed funders are essentially focused on vision and series A funders on optimism, series B is about strong confidence in the company's progress and trajectory. Of course, this makes this round particularly difficult since many companies are teetering between not quite an early stage startup but not quite a full-fledged enterprise either. As a result, pitching prospective investors during this phase requires some serious analysis and preparation. The series B pitch deck can't contain lofty assertions or idealistic assumptions. At this juncture, facts and figures must dominate the deck, demonstrating the certainty that the leaders have in the direction they are steering the venture and instilling investor confidence. Here is how to put together a pitch deck that covers the most critical points:
Know your audience
This is important during any stage of fundraising, and its importance increases with each successive round. Although seed funding may include individuals and firms, as the name of the fundraising round moves down the alphabet, there are likely bigger and bigger companies that are willing to get in on the action. At this point, your company should be working its market and looking to grow, ideally with a specific growth target in mind. Thus, you have to ensure that you know to whom you are pitching, what their existing investment portfolio contains, and the sort of things for which they are likely looking. This information will help shape which points are highlighted in the pitch deck and which ones can perhaps be glossed over.
Know your numbers
In the beginning, knowing your numbers generally means that you can concentrate the pitch on forecasts and projections. However, once your company has gotten to the point that a B round is necessary, there should be concrete performance and a solid revenue stream that justify the cash injection, which more than likely is going to be used to capitalize on the existing momentum. The pitch has to address specific financial matters and provide information with respect to any relevant assets, including intellectual property.
Know your competition
More than likely, if your company has made it to the B round, then there is a healthy market in place for your company’s good, service, or product, and it is highly likely that there are some direct competitors in that space as well. Your company may actually need this cash infusion in order to overcome some of the competitive forces that are at play. Some investors may be deterred by fierce competition, but your company must demonstrate that it gladly accepts the challenge and has every intention of doing whatever it takes to surmount those competitive obstacles. There is no reason to shy away from discussing the competition, provided that you can convince the prospective investors that their much-needed dollars will go a long way in helping your company to dominate the pertinent market.
Know your future
The Series B round is typically more concerned with long-term objectives, so these objectives need to be determined beforehand and made apparent throughout the pitch deck. The money raised during this round may be used to provide funds the company can use for their own acquisitions, large investments into technology, beefing up research and development, or engaging in significant international expansion. Regardless of the goal or intended use of the funds, the plan of action has to be a part of the pitch and should be clear, concise, and of course, sellable.