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The take from Stage VP

Make your “use of proceeds” slide in your pitch deck stand out

By Chuck Isgar and Alex Rubalcava

Introduction

We’ve seen way too many pitch decks with “use of proceeds” slides that undermine a founder’s command of their plan to grow their company. Our goal in this blog post is to provide suggestions to help you nail the “use of proceeds” slide so that it can support your pitch, not diminish it. We will walk through a few scenarios so that you can see ways to make a strong impression on this slide-- no more leaving investors full of questions after seeing your “use of proceeds” slide!

Key takeaways

  • It’s time to rethink your “use of proceeds” slide in a pitch deck to investors; investors appreciate founders who have clear plans and timelines for the use of proceeds and know how to communicate them.

  • Most founders communicate their use of proceeds, and the milestones they expect to achieve with the capital they’re raising, with a combination of pie charts and bullet points. Pie charts and bullet points fail to communicate anything about time

  • Instead, founders should use Gantt charts, timelines, and other visualizations to communicate how they will spend the capital they have raised. Most of the visualization should focus on the order of future hires. Founders should also include a product roadmap for the next year or two, and a revenue forecast built from the bottom up, based on the company’s sales funnel and accounts won. 

  • There is no need to forecast out the years in detail — seed VCs care about what you are going to do in the next 12 to 24 months with the capital they are furnishing. Your 2026E top line forecast will not matter.

  • As Dwight Eisenhower once said, plans are worthless, but planning is everything. Communicating your use of proceeds, hiring plans, product roadmap, and revenue growth in a visual format incorporating time as the main factor will allow investors to understand your plans in more detail, to ask better questions, and to arrive at decisions more quickly.

The way you present your hiring plans can tell different stories

Simple solution: use timelines to show your hiring intentions.

Startups very often raise capital with the intent to increase headcount at their company. However, not all founders have a clear plan for their upcoming hiring schedule, which can raise questions in the mind of an investor. Oftentimes, a founder will have something like this in their pitch deck:

Intended use of capital:

  • Server costs - 5%

  • Overhead (rent, etc.) - 5%

  • Full time hires - 90%:

3 engineering

2 marketing

4 sales

1 product

1 customer success

Founders will often display the hiring information as a pie chart, to convey the relative importance of each category of spending.

Pie chart of hiring plans:

Pie chart of hiring plans.png

Here’s the problem: these charts keep the investor guessing. When we review decks, and we see pie charts and bullet points on the use of proceeds slide, we have to ask a number of basic questions to get to more meaningful discussions. Among the questions that the typical format leaves unanswered:

  • Which hires are the most important for the startup’s short term goals?

  • Are you hiring the right mix of individual contributors, and management, and in the right order? For example, we often see startups hiring a VP of Sales before hiring any account executives, and we usually favor inverting the order.

  • Are you investing early enough into critical roles like marketing, that some seed startups defer for too long?

There’s no reason to ever leave an investor guessing. Your plans for the company should be super clear. You are steering the ship, and an investor needs not just to know your plans, but that you know how to organize and communicate them effectively.

Now, let’s take a look at what happens to this information when a Gantt chart is used that shows clear hiring timelines and intentions.

Gantt chart of hiring plans:

Gantt chart of hiring plans.png

This chart tells a very different story than what was shown by the list and pie chart above. According to the Gantt chart, given that the very first three hires out of 11 are all engineers, it immediately becomes clear that this startup’s focus at present is expanding the technical product. Investors will then be able to ask well-informed questions. Among them:

  • I see that you’re hiring a VP of Engineering nearly simultaneously with your iOS and infrastructure developers. Would it be better to let the VP of Engineering make those hires, and assume they come online a month or two after the VP?

  • You’re investing into content marketing much earlier than most startups do. I like that. What’s the profile of the person you’re looking for, and what kind of content do you think will be most impactful for you in the short term?

  • Your plan shows only one customer success hire for the foreseeable future. What do you think is the right number of accounts for any one CS person to handle?

Why does this matter? The same information, shown in a pie chart, may have made an investor think that the startup was focused on sales and marketing. However, the Gantt chart tells the opposite story: sales and marketing will be the focus later, but right now the focus is engineering. Startups must get the order of operations right in order to find product market fit. Showing investors how you think about the order of operations will allow you to stand out relative to other founders whose planning has not been nearly as rigorous.

One more note: if you’re working on your “use of proceeds” slide and you’re arbitrarily coming up with numbers regarding hiring plans, it’s probably time to do some thinking about how new hires fit into your trajectory for your company. You should be prepared for an investor to ask you why you’ve prioritized hires in the way you have, and if you don’t have a well-thought out answer to this question, it might mean you’re not ready to raise money. Presenting your plans in charts that account for time preempts these more basic questions, and allows you to jump right into nuanced, thoughtful conversation with investors — conversations in which you will really shine.

Now that we’ve taken a look at how a founder can refine communication about their hiring plans, let’s take a look at the most effective way to communicate a company’s product roadmap.

No more lists of products: your product roadmap should be a Gantt chart to demonstrate prioritization 

Oftentimes, founders list the features they intend to build in the coming months. The list commonly looks as simple as: 

Product plans:

  • Android updates

  • iOS launch

  • Salesforce integration

  • Website expansion

While these might all be reasonable and important product plans, a simple list like this does not tell an investor what the founder is prioritizing. Based off a list like this, it is completely up to the investor’s imagination as to what is most important to the founder. As discussed earlier, a founder’s goal should be to show an investor that they have clearly thought about the plans for scaling their company and that they know how to communicate these plans. A Gantt chart for a product roadmap can be an effective way to do this.

Gantt chart of product roadmap:

Gantt chart of product roadmap.png

It only takes a quick glance at a product roadmap organized in this way to get a sense of what the founder is prioritizing. In this example, it is very clear that the Android update and website expansion are the highest priorities, while the iOS launch and Salesforce integration are longer-range projects. Reading a chart like this, investors will be able to ask you thoughtful questions about how and why you have made the choices that you have.

In conclusion: stand out from the pack by being specific and using timelines on your “use of proceeds” slide

We’re hoping that this post has helped you rethink your next “use of proceeds” slide in a pitch deck. It’s not only one of the most important slides to many investors, but also one of the most underutilized opportunities for a founder to demonstrate their plans for their company. By using Gantt charts and specific timelines, you can stand out from the pack and show an impression that you have clear plans for your company and you know how to communicate them.

Thanks for reading. We’ll be back with another blog post in a few weeks so stay tuned.

About the authors: Alex Rubalcava is the founder and managing partner of Stage Venture Partners. Chuck Isgar, a 2020 graduate of Brown University and a 2021 Schwarzman Scholar, is an analyst at Stage Venture Partners.

Alex Rubalcava