Is your pitch deck worthless?

30th March, 2017

Founder and CEO of angel investor group and startup generator Investible, Creel Price, doesn’t want to see your pitch deck or listen to your presentation – he’d rather ask you a few questions.

Well, he does, but the questions are far more important.

Price and Investible have spent eight years refining a continual process which is designed to sort the wheat from the chaff when it comes to startup hopefuls.

Thanks to shows like Shark Tank and the buzz around innovation there are a lot of them.

“There are so many online resources for pitch training which is all good stuff, but equally there’s a lot more deals out there and I think as a percentage there are fewer quality deals,” Price told The Pulse this week.

“It’s harder to find the good ones around the noise.

“That’s partially why we’ve tried to systemise the process to be able to do it at scale.”

Price, together with co-founder Trevor Folsom started Blueprint Management Group with $10,000 and exited for $109 million.

He’ll be presenting on Investible’s 16-point startup investment criteria, something which has been gradually refined over the past eight years.

However, thanks to the plethora of hopefuls (he estimates 100 a week) pitching for investment, Investible has had to rapidly refine the model over the past 12 months.

What Investible looks for

All up, Investible tries to mine about 300 data points to make a decision on whether or not to pledge ongoing investment in a startup.

While there’s 16 specific areas, Creel said six broader areas stood out as being compelling for Investible.

  • Values – “We really like to get a sense of who they are as a person and how they conduct themselves as a person.”
  • Founder teams – “We like teams as opposed to individuals because it helps mitigate risk somewhat. With one founder, someone in their life can get sick, move country, or they can lose a bit of energy for their business or they simply get lonely.”
  • Vision – “Being an angel investor, I need to see a vision towards exit. The same thing again, you need to make sure that the founders have aligned vision and it’s actually been discussed.”
  • Skills – “Along with looking for tech skills, we assess their previous experience, whether they have any specific industry experience. You’d be surprised how many founders don’t.”
  • Credibility – “As an individual they’ve got to have a big social media following. Have they executed a business before? Have they come from an esteemed university or worked at an esteemed company? That doesn’t ensure success, but it makes it easier for them to raise money.”
  • Motivations – “We’ve got a 48-question questionnaire which assesses founder motivations…we also look at attributes such as leadership, drive, resilience and conflict resolution.”

Creel said that some of the decision on whether to fund a green startup still came down to gut-feel, but Investible is attempting to bring data to the forefront of the discussion.

“Most of the people who come into the venture capital system try to bring data to bear, but it’s mostly historical data or comparative to similar companies in different industries,” said Price.

“But we’ve gone to lengths to figure out how we can get some data points to get some qualitative stuff.”

He says data isn’t just about helping Investible make a better decision, but it’s fairer on entrepreneurs as well.

No pitch decks, please

“Our process is about providing a level playing field,” said Price. “Unfortunately, most angel investors rely on pitch decks and pitches, which means that the best orators and the best graphic designers get the money.”

He likened selecting a startup on a pitch deck or a presentation to picking a horse on Melbourne Cup Day based on its name or its jockey’s colours.

“That’s what a pitch deck really is,” said Price. “There has to be a more sophisticated way to do this.”

He said that Investible wanted the process to provide the data upon which Investible could decide whether or not to keep funding a potential startup.

“You go through it, and if you’re a good founder and you have a good business you’ll get through. Even if you don’t, we don’t say no, we say not yet.”

He said part of the motivation for developing a rigorous process was born of simply wanting to give better feedback to hopefuls that don’t make it through.

“Yes we want to make money for our investors, but equally people’s lives are affected by our decisions,” said Price.

“You only improve the innovation quality in this country by giving people specific feedback on where they didn’t quite stack up against someone else.

“We feel providing them more data points around what they could do better is how we could contribute to the ecosystem. “

Creel Price and Investible will be presenting at the Myriad festival in Brisbane