Some of the most important slides for an early stage startup, that often get overlooked are the Sales and Marketing Pipeline slides. And I get it, as a founder, you’re under a lot of pressure. In the short time you have with an investor, you need to position the opportunity in the market, define the problem your product solves, talk about the current state of the business, and build conviction that you are the team to “win” in the market. It’s not easy. But still, I can’t stress how important it is for an early stage investor to understand what’s happening with, what I call, “The Growth Machine.”

The Growth Machine

The moment your startup begins generating cash, focusing on the levers that cause your growth machine to purr and the levers that cause the machine to choke and sputter are key. The better acquainted you are with these levers, the greater conviction a Venture Investor will have that you’re ready to accelerate growth.

So how do you show that the machine is ready for gas? Here are the slides you need.

Pipeline Slide #1 — Big picture

While you certainly don’t have to get as granular as the graphic above suggests, I do tend to like to see an understanding of New Opportunities→ Pilot/in Negotiation → Closure. Having the conversion percentages is great, but I also like to see the raw numbers moving through.

Now every company has their own stages, and many early stage companies put extreme focus on different sales stages. I think that’s great, but the problem is that it becomes quite difficult for investors to actually understand what your stages actually mean. So always include the definitions of what the different stages mean to you.

Pipeline Slide #2 — Quarterly Breakdown

Here, I like to see a list of companies in the Sales Pipeline broken out by current stage. In most cases, you’ll want to anonymize the company name — that’s completely fine! Most investors will understand. But having an understanding of how the pipeline is evolving is really important in understanding the general health of the pipeline.

Note: The only thing that’s missing from the picture above is days in the pipeline.

If you want to access the template for the above pipeline, you can find it for free here.

Weighted Forecasts

You’ll notice in the Sales pipeline that there’s a column that reads “Weighted Forecast.” Essentially this is what you get when you multiply the expected deal size by the probability the deal will close. It tells you how large your pipeline is. One thing to note here is that in the real world, you don’t actually close a % of a given deal, it’s actually binary. Being transparent about these percentages is extremely important, and in-fact many early stage investors will assume a more conservative (i.e. lower percentages) to hedge against some of the risk.

And that’s it! Adding these two slides will 1) Show that you understand the nuances and the levers of the growth engine and 2) make your time with investors much more efficient!

Digging in

You’ve now beefed up your pitch deck. Congrats! But what do you do once an investor is interested and wants to dig into the pipeline. Given the number of different definitions that exist out in the world for stages, we keep it simple. We look at new opportunities that enter the pipeline, what’s being won and what’s being lost on quarterly bases. This gives us a sense of “how good” the pipeline is, how long it takes deals to close, and whether or not the company is getting better at closing deals over time.

Here’s how the analysis ends up looking (With random numbers):

Lastly, as investors, we look into whether or not the pipeline is large enough. For that we use something called “the pipeline conversion ratio.”

Tae Hea Nahm has a great post on this which you can find below.

GTM Metric #1: Will I make the quarter? Do we have enough pipeline coverage?

And now you’ve got what it takes to present your sales and marketing pipeline, to dig into what’s going on with it over time and a way to decide whether or not the pipeline is healthy!

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