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Neil Patel

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How do you send a pitch deck to friends and family?

Friends and family will be an incredibly pivotal part of your journey as an entrepreneur. This is true whether you actually directly raise money from them or not. If you can raise from them, it can be some of the best capital you can bring in. Here’s how to approach it.

The Pitch

There are three reasons to pitch and send a pitch deck to friends and family:

  1. For practice ahead of pitching angels or VCs
  2. For raising from them before going onto other rounds
  3. For gaining introductions to their friends and family who may fund you

Even if you don’t raise from them, this is your core support group. Entrepreneurship can be lonely. You are really going to appreciate having them in your corner on this journey. For them to do that it really helps them to get what you are doing, get excited about it, and understand some of your challenges.

Just practicing with them can really help you find holes in your pitch, polish it and perfect it, before approaching the investors you really want. 

You may also be surprised at what introductions they can make for you too. The network around this group is hundreds and thousands of people. They may be able to open many doors for you, far beyond just the money.

The Place Of The Friends & Family Round

When it comes to the series of fundraising rounds the friends and family round comes first. This is typically your pre-seed round.

If your family is well off, then they may have the financial capacity to participate in your Seed as well. The majority don’t. 

Whatever their level of participation, official or not, raising money from friends and family is significant to future investors. It shows that others believe in you, your mission, and your business. It shows that those who know you best really believe in you. You can imagine the opposite is true too.

Who Are Friends & Family?

Who counts as friends and family?

  • Immediate and extended family members
  • Coworkers and former coworkers and bosses
  • College classmates and professors
  • Strong social media connections
  • Friends of friends, family of friends, and friends of family

Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

The Pros & Cons Of Raising From Friends And Family

There are both potential pros and cons to raising from friends and family.

The most obvious advantage of raising from this group is that it can be the fastest and easiest money you can raise. They should already know you, like you, and trust you, and that is 90% of the battle.

In many cases, this group may also be the most lenient when things aren’t going according to plan. They may be more patient and hands off. 

The opposite can also be true, and that can be one of the biggest cons of raising from this group as well. If the business isn’t going well then these relationships can be strained. Your business is important to you, but these relationships can be even more valuable. 

If these raises are messy, they can complicate ownership structures and make future raises more complicated and expensive than they need to be.

Curating Your Pitch Deck

If you are serious about raising from this group of potential investors then it is worth curating your pitch deck for them. 

Consider what may be most important for them to learn, and less so. Since you already have a personal relationship with them, or at least a very warm introduction, this is much less about proving your individual capability, and even track record or returns, as it is telling a story that resonates with them personally, and selling them on the dream. 

How To Share & Send Your Pitch Deck To Friends & Family

If this is a test run for raising from more professional investors then you may want to do a full trial run with how you plan to share your pitch deck with them. That may be via email or Google Drive. 

Whenever possible you also want to be presenting this in person as well, just as if you were meeting with any other investor. You may also use a video chat service with screen sharing capability or this. Like Google Meet

If you want to send a pitch deck to friends and family networks then it is also smart to reach out using the ways you normally communicate with them. Or at least through the mediums they use most. That may include texting, WhatsApp, or by sending private YouTube or Vimeo slideshow links. 

Next Steps

After sharing and presenting, collect, and evaluate all the feedback you get. Tweak your pitch deck and presentation as you see fit to optimize it for future pitches.

If you still need to raise from other investors, then get busy building your target list of ideal investors. Then begin repeating sharing and pitching for real this time. 

Then it is about getting to work and delivering on the results you promised. Put that money to great use achieving the next milestones you vowed to conquer. Once you do that more capital will open up to you. Your initial investors will want to put in more capital, and they will tell others that you did what you said and were able to execute. Future investors will also now have references to check-in within. But, start by understanding how to send a pitch deck to friends and family.

You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.

I cover this topic more in detail in the video below.

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FULL TRANSCRIPTION OF THE VIDEO:

Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about how to send a pitch deck to friends and family. Before we get started, make sure that you hit that subscribe button, and this way, you will never miss out on any of the videos that we roll out every week.

Ultimately, friends-and-family, it’s going to be the first money in. It’s going to be the first people or the first potential investors that you’re going to be coming across. In today’s video, we’re going to be breaking it down as to how you’re able to get in front of them in a powerful way and close them. With that being said, let’s get into it.

Pitching friends and family. Essentially, the main reasons why you’re going to be pitching a friend or a family member is going to be because you want to 1) Practice, 2) Gain money from them, 3) Have them open the doors to other contacts that they have in their network.

The number one is to get money from them. It is the best and the easiest money that you can get. It’s essentially people that love you. It’s not going to be a full-blown due diligence that you need to go through in order to get that money, and it’s going to allow you to get that first trench in of cash that you can deploy to build something into something meaningful that later on, you can use to convince the more sophisticated institutional investors like venture capital firms or even angel groups.

The next one is, obviously, to practice. The last thing that you want to do is to go to a very sophisticated venture capital firm or an angel that has invested in hundreds of startups that could make it or break it for you, and you’re not buttoned up. So using your friends and family as a way to crowdsource the process, to get them to give you feedback, to get them to help you uncover those holes that were there, that you didn’t even know were there, is going to be a great way for you to practice, for you to optimize and iterate the story, the packaging, the positioning. Then, being in the position of strength when you get in front of people that perhaps don’t know you, they’re not familiar with your story and don’t really care about you at all. So your friends and family are going to be really helpful in terms of thinking how to package this and position this in a better light.

The next thing, at the end of the day, is that they can have a great network. Maybe your friend or your family member has access to someone that could be a gamechanger for you, someone that can help you with access to distribution, to subsequent rounds of financing, to an M&A opportunity of someone else looking at acquiring you. So you want to take a look at who can they introduce you to that can come in and be a gamechanger for your business?

In terms of the place of the friends and family round, this is going to be the very initial trench of money that is coming in. Before you even think about a seed round, a Series A round, where you have angel groups, angel investors, and venture capital firms, friends-and-family is really the first money in. That’s before anything. 

Again, this is going to be small amounts for the most part. It can range between maybe like $100,000 or $50,000 all the way up. I’ve seen friends and family all the way up to 1 million or 2 million. Essentially, those are the amounts that you’re going to keep in mind. Again, this is the absolute first round of financing that happens. 

Remember that typically, rounds of financing are going to happen every 18 to 24 months, and as you mature as a business and you unlock certain milestones, then also, you’re graduating to a different financing cycle. In that other financing cycle, you’re going to have a completely different set of expertise, skillsets, and profiles that are required from investors.

Who are friends and family? Friends and family are, obviously, immediate family members. This could be your parents; it could be your cousin, your brother, your sister; it could be college classmates; it could be high school classmates, maybe people you used to work with like your former boss. In many instances, I’ve seen a former boss giving a lot of money to the entrepreneur when building the business. And it could be people in your social media environment. It could be people that you are connected with on LinkedIn, Facebook, Instagram, whatever that is, but there’s that direct type of relationship. This is your first and perhaps even second degree of connections.

When it comes to the pros and the cons of friends and family, the pro is ultimately that these people love you, they trust you, they care about you, and they want you to succeed. They’re not going to ask for a lot of due diligence, a lot of questions, a lot of documents because they already trust you. Trust is present. And believe it or not, trust is everything when you’re looking to raise money. That’s definitely a pro that is going to allow you to get that money in quickly so that you can deploy and execute very fast.

When it comes to the con, your Thanksgiving dinners and your Christmas dinners are going to be all about conversations around the business; they are going to be all about following up on how the valuation of your business is growing over the course of time. Don’t forget that if you’re not able to deliver on your promises, and the business doesn’t perform, and perhaps it’s even failing, some of those relationships may be hurt and affected. So you want to be very careful and really consider this when you’re taking money from your friends and family.

Curating your pitch deck for your friends and family. When you’re curating your pitch deck, keep in mind that you’re going to be keeping it from 15 to 25 slides, so it’s going to be very straightforward stuff. You can even use the pitch deck template below, that you can see on the comment section below. It’s for free, and it is used by founders all over the world to raise millions. You can literally grab that and optimize it to whatever you’re looking to accomplish. 

Remember that those friends and family members are people that you know very well, that you understand their interest, what drives them, what motivates them. Perhaps you can package that pitch deck with a story that really enrolls them in that you’re putting some of that magic that is going to get them super excited to jump into this and share the journey with you.

When we’re talking about how to send and how to share your pitch deck with friends and family, what you want to do is avoid putting that file into an email as an attachment because then that could be super big from a size perspective. That could trigger a certain flagging from some of those email providers, and that could land you on the spam folder of those friends and family members.

What you want to ultimately do is put it on Google Drive or Dropbox and grab a link and use that link in your email to be what you share. Maybe it could be something along the lines of, “See below or here’s the link to my pitch deck,” and whatever you want to put in the email, rather than just attaching it.

The next thing that you want to do is, remember that this is sales, so you’re never going to close it on that first touchpoint. You always want to constantly follow-up. Follow-up because the sale always happens in the follow-up. What you want to do is, rather than continuing on the follow-up via email, take it to text, MMS, or WhatsApp, because those are underused methods and channels. This could be a way for you to filter through the noise on their inbox so that you are always on their top-of-mind, on their priority. That could be something to push things forward and to share the important document with them.

In terms of next steps, once you’ve gotten that money from your friends and family, you should never go out to celebrate and have a tremendous party because raising money is never a milestone. Raising money is a stepping stone. Now you have the people that love you that are trusting you with their money. What you need to do is work on delivering on your promise, on providing returns for them and their family. They believed in you. You owe it to them to really give it back to them. To give them that money back with returns.

I would love to hear on the comment section below how you’re thinking about sending your stuff or dealing and interacting with your friends and family. Hit a Like to the video as well, and also subscribe to the channel so that you don’t miss out on the videos that we’re rolling out every week. And if you need help with your fundraising efforts, send me an email at alejandro@pantheraadvisors.com. Thank you so much for watching.

 

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Neil Patel

I hope you enjoy reading this blog post.

If you want me to help you with your fundraising, just book a call.

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