Here's a controversial opinion: I think copying is good! There, I said it… Especially when it comes to pitch decks, it's good to learn from the best and emulate them to the extent it applies to your startup/industry. Especially useful to perform a pitch deck analysis for really tough problems.
So, I copied the pitch deck that Brett Adcock used to complete a $215M fundraise on Aug 10th this year.
Who is Brett, you ask?
Brett is the creator of Figure, a company that specializes in AI robotics and is currently developing a versatile humanoid robot powered by AI. Before starting Figure, Brett founded Archer Aviation, a company that focused on urban air mobility and went public with a value of $2.7 billion. Additionally, he created Vettery, a talent marketplace that utilized machine learning and was purchased for $110 million. Brett's upbringing was humble, as he was born and raised on a third-generation farm in Illinois. Does not get more Midwestern than this. He has had 20 years of experience as an entrepreneur and is, in my view, a quieter and better version of Elon Musk and is tackling equally big problems facing humanity. I expect we will hear more about Brett in the next few years.
Urban air mobility is a tough space to start a business in and is not for first-time founders. Brett is a successful ex-founder and has earned the right to play in this space.
Key learnings from his pitch:
1. Solve BIG problems: Urbanization is on the rise and will only grow. As urbanization grows, the problem of transportation in cities is going to become even more acute. People don’t enjoy being stuck in traffic jams. If your startup can solve that problem in a BIG TAM, then you'll be able to hire talented people, secure VC funding, and generally get large corporates and governments excited to partner with you.
2. Establish the size of the problem in dollar terms, if you can, to emphasize the issue. Brett quotes a Morgan Stanley report that sizes the market at $1T –Now, that's a problem worth chasing.
3. It's often-repeated advice: Give the customers a painkiller rather than a vitamin. Pain compels us to seek solutions, while vitamins are just nice to have. Customers will pay to solve the problem of wasting their time in traffic.
4. Make your product the hero of your pitch: VCs want to see the product in action; show them real pictures or videos of its intended use. Archer was founded in 2018; investors will want to know what has been achieved since its inception. So, show them. The business isn't just a concept at this stage; there are working prototypes of the vehicle. Brett details the factory, the team, and the certifications achieved with nearly $1BN raised to date. On slide 11, Brett showcases his launch vehicle, Midnight, with detailed specs and a list of advantages, illustrating why it will be chosen by end-customers. An element of sales is crucial – you must sell the product to the VCs before selling equity in the startup.
5. Cash is King and Queen: In such a capital-intensive business, cash is vital. Brett starts with the current cash position and details what new investors are bringing to the table. He has also clearly outlined the use of the funds. Investors want to know who else is investing (Stellantis, in this case) and precisely what you'll do with the funds raised. Provide them with that information clearly.
6. Wars are won on logistics, as is in manufacturing: On slide 10, Brett indicates that the supply chain is in place, the manufacturing facilities are ready, and the critical milestones for an aircraft's flightworthiness are being met. This shows traction that has been achieved and should be displayed to give confidence to both existing and new investors.
7. Proof of the pudding is in the Selling: Secure an LOI from a prospective client or, even better, get an advance deposit. Ultimately, money is the best indicator of future purchases – better than hundreds of customer interviews that say that they will buy when you get the product ready. On slide 22, Brett reveals that United Airlines has already placed a $10M deposit on the first 100 aircraft. He has clearly announced the future routes, securing intent and commitment from United. The icing on the cake: former United CEO, Oscar Munoz, sits on Archer's board. United has announced a $1.5BN commercial deal. Nothing beats securing an advance sales order even while building the product. Founders are usually hesitant to ask for a deposit /advance sale, but you'll find that customers are willing to place an advance order, if you focus on addressing their BIG problems.
8. Valuation is relative: On slide 32, Brett compares Archer's valuation to publicly traded peers. He has priced Archer midway between Joby, a highly valued peer, and Vertical, which holds the lowest valuation of the group. He justifies the current valuation and simultaneously showcases the cash on their balance sheet. In this high-interest rate environment, having liquid assets is beneficial. A lesson for founders is to be frugal with their startup’s expenses and to avoid overvaluing their company. High valuations induce high-pressure, short-term behaviors and generally get you investors that are “dumb” money. Attracting smart investors who can liaise with regulators and facilitate sales (such as with United Airlines) is more valuable than the amount of money raised.
Are these insights applicable to your startup, or do they seem irrelevant? I welcome your thoughts. I host a 30-minute free session for founders looking to sharpen their pitch decks, gained from my own startup investing experience and from studying hundreds of pitch decks and helping scores of founders in raising funds. Use the link: https://linktr.ee/renjitphilip to book time with me.
If you'd like the full copy of his pitch deck annotated with my detailed notes as a ready reference, please leave me a message at info@renjitphilip.com, and I'll be happy to send you the deck.
