UK: Your Marketing Deck Is Not A Due Diligence Document

This story isn't actually about due diligence, or your marketing deck.

It's about you.

It's about you exploring uncharted territory in the hunt for the fabled lost city of El Dorado.

I am going to tell you some things you should pack, plus some things you should definitely leave at home.

But first, a little bit about me, and why I am telling you this story……

Hey there! 👋

I have seen a lot of big marketing decks. 💔

Huge, weighty tomes. 📚

Bursting at the seams with obtuse, arcane language. 🧙‍♂️

Some heavy enough to counterbalance a construction crane. 👷‍♂️

The only conceivable use for these decks is to brutally beat hapless LPs into submission. 🤜🤪

Why, then, are these monstrous presentations created?

At its heart, this is a problem about control and what happens when people who normally have control, lose it.

When you make a trade, or buy a company, or offer debt, it is a decision you make, on your terms. You are in control. You decide which deal information to consider, and whether you will participate.

Conversely, the investor meeting is something GPs often feel they cannot control.

It doesn't matter how aggressive or confident you are in the markets. Without control, you will likely adopt a defensive posture. 😨

You will probably write the deck with this thought in mind:

“I need to answer all possible objections the other party might have, thereby disarming them, and giving me control.” 🙄

Every LP is different. They all have a different set of questions and a different set of red lines. There are millions of potential combinations. Often there is hardly any information about which combination you will encounter.

Think of it as an explorer's expedition to undiscovered lands. You don't know if you will face polar bears, piranhas or pythons, scorpions, sharks or seismic activity.

What should you pack? 🧳 How could you prepare for every eventuality?

The answer is you cannot pack for every eventuality. If you bring everything you might need, you would be so weighed down, you would not make any worthwhile progress. You would not move forward. 🛑

The same will happen to you in LP meetings if you stuff your deck with bear spray, anti-venom, shark repellent etc.

You may have answers for everything, but you won't make worthwhile progress.

So, what should you do instead? 🤔

Firstly, you should definitely prepare to answer questions from LPs. But keep the answers in your head – not in your deck. And you should practise extensively. You should role-play. You should video the role play. Then you should iterate until you have confident answers to the questions you can expect to face. 😊

And what about the deck?

If you have a 70-slide deck with a filename that ends something like …”v84 FINAL FINAL SIGNED OFF FINAL”, please pay attention to the following:

Your marketing deck and your pitch have only one job. That job is to excite the LP. Get them excited enough to take on the professional risk of recommending a closer look. It shouldn't take 70 slides to do that.

How do you excite an LP? 🤔

Focus on one thing: telling a compelling story.

Why? Investors are humans. Humans respond to stories. They remember them. They get excited by them. Stories build relationships. Ordinary people are moved to take extraordinary actions through stories.

Remember (or imagine!) your wedding reception. You are with your partner and a distant relative approaches:

“Tell me how you two met”, they might say.

They want to hear the story. Nobody ever asks you: “Explain to me how it was you both decided there was no valid reason not to get married”.

Now you understand the importance of the story, what should your story say?

The answer is as unique as you and your Fund, but make sure your story deals with two things:

1. Why your offer is relevant:
   • the investment opportunity fits a current mandate,
   • and the GP is a group the LP could invest in i.e. it is likely to pass due diligence.
2. Why the opportunity is exceptional:
   • this is an exciting opportunity,
   • and the team/market/strategy are outstanding (can be any mix of these).

If you can do that, there is a good chance you will get a request for due diligence and, hopefully, an allocation.

Don't start with a defensive stance. Don't fumble for bear spray.

Tell a great story.

Be relevant. Be exceptional. Be you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.