The Leading Edge #004 - Help Your Investor Deck Help You

Weekly Word

Welcome to the fourth edition of Edge Management’s new weekly newsletter, “The Leading Edge”! Each week, we'll cover entrepreneurship and our industries of focus. And we'll highlight the latest and greatest at the intersection of innovative insurance and finance.

We’d love your feedback on what you enjoy most about the newsletter! Tell us what you’d like us to cover in future editions of The Leading Edge. We look forward to hearing from you!

Insights from the Edge

A "Baker's" mindset

We hear a lot about having an "abundance" mindset. Applies well in the context of business. With this mindset, you realize plenty of opportunities exist in the world. And the solution to winning isn't slicing thinner pieces of pie for everyone. The solution is baking more pies.

0 to Exit in 11 months

The Milk Road, crypto's largest daily newsletter, sold at the end of last year. At the time of the exit, it had 250k daily readers. It was only 11 months old. When asked about their process, the founders said, "We chose something we're good at and executed every day." Lesson in there.

Know your investors

When you're raising money, it's important to understand what matters to your investors. Equity investors (typically) tolerate higher risk and focus on potential upside. Debt providers look for opportunities with less downside risk and a defined interest rate. Keep this in mind when evaluating your funding options.

Long-term $$ for short-term needs

Many founders haven't considered long-term bonds as a solution to their growth funding needs. But when structured the right way, bonds offer an alternative to traditional forms of debt or equity that may benefit the company in the long run.

Billion-dollar business ideas?

You're driving in your car when an idea for a new business hits you. You wonder to yourself whether it could be a billion dollar business. Now you have a way to figure out if the idea is in fact a unicorn of an idea.

3 Important Things To Incorporate Into Your Investor Deck When Raising Capital

In 2022, we reviewed over 50 investor decks from companies looking to raise capital. The best ones all had 3 key things in common.

When you're in the market for capital, your investor deck needs to be on-point. You're telling investors your company's story, vision, and potential. And the deck might be the only document about your company a potential investor ever sees. So it needs to have all the right pieces.

All slide decks include the standard components (problem, solution, opportunity, team, etc.). But the best ones also do these three things:

• Use bullet points, not sentences

• Include Funding Requirements and Use of Funds

• Highlight things about the deal that investors care about (don't get too technical)

If you're preparing to present your slide deck to investors, these three things will help your deck achieve its purpose - helping you get funded:

Thing #1: Bullet points

Want to watch a person's eyes glaze over? Show them a PowerPoint with paragraphs on all the slides.

Put yourself in the reader's shoes. When reading a deck, you want the messaging to be concise and easy to follow. So, use bullet points to highlight the most important parts of the project.

Billionaire entrepreneur Marc Lore recommends keeping each slide to ~50 words or less.

Thing #2: Funding Requirements

We get this question from lenders all the time: "what's the actual funding ask?"

They've gone through the whole deck and understand the project. But have to come back and ask what the company is looking to raise. Right off the bat, this is extra work for a potential investor. Raising capital is hard enough - don't create extra work for investors.

Include the amount of funding you need and a high-level "use of funds" summary in the presentation.

Thing #3: Written to investors

This is an important one.

Nobody knows the technical side of your project better than you do. You could talk about the specifics of it in your sleep. But your investors want to learn the basics before getting into the weeds on the technology. Highlight the parts of the project that investors care about most.

Don't make potential investors feel like they're drinking out of a firehose. Write to investors, not engineers.

If you use this approach, your slide deck will be easy to follow. And it'll allow investors to determine whether they have an initial level of interest.

A good slide deck does a lot of the legwork in the early part of the capital raising process. Building it the right way gives your company the best opportunity of getting funded.

Leading Headlines

🚀 IRA boosts clean energy: with tax credits provided in the Inflation Reduction Act, clean energy operations will actually be cheaper than most gas plants

🌳 Alaska eyes new revenue source: Alaska Gov. Mike Dunleavy plans to introduce a bill that would turn the state's ability to sequester carbon into a significant revenue stream. Early projections estimate the revenue could be worth hundreds of millions of dollars each year.

🌱 Chevron investing in carbon capture: a division of Chevron USA was a lead investor in Svante's recent $318 million raise.

A Billion Dollar Business, You Say?

Disclaimer: None of this is financial advice. This newsletter is for educational/entertainment purposes only.