Click to Print

Billionaire Reid Hoffman Reveals LinkedIn's 2004 Pitch Deck Along With Invaluable Startup Advice

October 17, 2013
URL: http://www.entrepreneur.com/article/229469

Slide 1 of 39

"In 2004, the consumer Internet was just beginning to rebound," writes Hoffman. "We had no revenue...Investors see a lot of pitches. First, understand your audience. Research prospective investors thoroughly. Second, understand the broader financing climate."

Slide 2 of 39

"Open with your investment thesis, what prospective investors must believe in order to want to be shareholders of your company," says Hoffman.

Slide 3 of 39

"The general rule is one business model drives the business. It's tempting to list multiple revenue streams because you're trying to prove that you will be big. Yet when consumer Internet companies do this, investors generally see a red flag."

 

Slide 4 of 39

"Steer into your investors' objections. There will be one to three issues that are potentially problematic for your financing -- address them head on."

 

Slide 5 of 39

"Show, don't tell. Again, your pitching goals are to increase investors' confidence in your investment thesis and lead them to a shared view of your company's problems."

 

Slide 6 of 39

"In the early days, you want to use analogies to successful outcomes to describe what your company is and what its potential could be."

Slide 7 of 39

"Understand where analogies apply and where they do not. Pitch by analogy but don't necessarily reason by analogy."

Slide 8 of 39

"When pitching by analogy, anchor your business to other valuable businesses to signal that your business will be valuable, too."

Slide 9 of 39

"It's better to have no analogy than a bad one."

Slide 10 of 39

"Any good idea has legitimate reasons why it won't work. In order to achieve real success, you need to be contrarian and right."

 

Slide 11 of 39

"Your investment thesis is either concept-driven or data-driven. Which kind you are pitching?"

Slide 12 of 39

"LinkedIn's Series B was a concept pitch because our data at that point wasn't impressive."

Slide 13 of 39

"One ingredient this pitch lacks, which I now think is essential to modern pitches, is our risk factors. Experienced investors know there are always risks."

Slide 14 of 39

"Explicitly identify the risks that could thwart your success and how you will mitigate them. And instead of waiting until investors ask about your risks, share them proactively so you build trust."

Slide 15 of 39

"Express your competitive advantage."

Slide 16 of 39

"This is mostly a mistake slide because customer slides are more appropriate for enterprise pitches."

Slide 17 of 39

"You want to show focus in your decks by emphasizing what you're really betting on. However, show some maneuverability."

 

Slide 18 of 39

"It's always better to have less slides, but it's much more important to have a great deck. A great deck needs to address all important concerns and tell your story effectively."

Slide 19 of 39

"When pitching VCs, think about the individual partner in the context of their partnership."

Slide 20 of 39

"People frequently think the most fundamental strategy of a startup is its product strategy. In fact, the most fundamental strategy is the financing strategy."

Slide 21 of 39

"Always think about the next round. The usual tempo for raising money from venture capital is at a minimum of a year between financings."

Slide 22 of 39

"Reinforce key concepts when delivering a concept pitch...It's helpful (but not mandatory) to put your thesis in each of the titles."

 

Slide 23 of 39

"Show a focus on bottom-up tactics for your strategy."

Slide 24 of 39

"Show your product rather than saying you intend to build a best-of-breed product."

Slide 25 of 39

"When in doubt, lead with what will make the most sense to investors."

Slide 26 of 39

"It's more important to have the right person say yes than it is to have everyone say yes...How do you know if an investor will add value? Pay attention to whether they are being constructive during the financing process."

Slide 27 of 39

"Internal data is preferable over anecdotal third party data...Also, be wary of confirmation bias. It's only natural that an entrepreneur wants to hear that their idea is great, but you don't want people telling you that because it doesn't help you."

 

Slide 28 of 39

"Take competition against your potential revenue streams seriously" and "identify the right metrics for success."

Slide 29 of 39

"Underpromise and overdeliver...Also show you're paying attention to the market."

Slide 30 of 39

"One of the virtues that entrepreneurs get from talking to many investors during the financing process is a wisdom of crowds that helps you figure out what the real risks are."

Slide 31 of 39

"Be decisive and ship...While it's important to think carefully about your future, don't think too far into the future."

 

Slide 32 of 39

"Be wary of adjectives and especially adverbs."

Slide 33 of 39

"Have reasonable numbers and assumptions that can pass the blink test during the pitch."

Slide 34 of 39

"A successful financing process obviously results in you raising capital for your company, but it also results in a partnership that delivers benefits beyond just money."

Slide 35 of 39

"You have the most attention from investors in the first 60 seconds of your pitch, so how you begin is incredibly important. One common mistake is putting the team slide early in the deck."

Slide 36 of 39

"Approach your likely investors and your ideal investors at the same time, because your likely investors provide a temporal forcing function by which you might end up with your ideal investors."

Slide 37 of 39

"It's okay to be hyperbolic, to be aggressive, to be visionary."

Slide 38 of 39

"You should end on a slide that you want people to be paying attention to."

Slide 39 of 39

"You don't have to have an appendix, but if you anticipate serious questions from the kinds of investors you want, preparing appendix slides with structured answers is impressive."