We know how much effort goes into preparing your deck. More than that, we know that behind every deck is a dream, not only to build a company, but often to change the world. That’s why we are committed to reviewing and responding to every one of the several thousand we receive each year.
In the post, we look at what happens when you submit your deck to us, shining a light on the different stages it goes through and attempting to demystifying the VC decision making process at the same time.
We use an internal tool called Affinity to manage all our dealflow and progress companies through the nine key different stages. For anybody who has run a sales team, we move companies through these stages in the same way you would move prospects through a sales pipeline to ‘closed’ or ‘lost’:
The two end states
All deals will eventually end up in one of these:
Also self-explanatory ?
To get a better understanding of what we look for, please check out this post.
The journey to get there
Every deck starts here — obviously.
It does not matter whether the deal came through our pitch form, or from another source, they all start in this status.
One of the team will review the deck and assess whether the opportunity is a fit for Playfair. We aim to do this and get back to you within a maximum of two weeks, but normally it is a lot faster, and typically within a week.
A number of decks will not pass this stage.
Typical reasons include:
- not a tech business
- too late — we are a pre-seed/seed stage fund
- no discernible competitive advantage/USP/differentiation — also referred to as ‘me too’ companies
- the deck is incomprehensible/nonsensical
If we pass at this stage, we will email you to confirm our decision and refer you to some resources that we believe will be helpful to refine your approach.
If on an initial review of a deck it looks like a fit for Playfair, one of the team will contact you for a call to find out more about your company.
This can be any member of the team. We do not run a typical hierarchy so you should not read anything into which member of the team takes the call. From Analyst to Managing Partner we are all equally involved in managing deals.
The call will typically last up to 45 minutes and the aim to find out more about you, your story, why you founded the company and then to fill in any gaps from the deck. Whoever runs the call from Playfair will also tell you about themself and the fund. Ensure you ask us any questions you need to as well.
If a Screening call is successful, the deal moves to Team Screening. If it is not, it will move to Passed and you will receive an email from us. In this email, we will give an explanation of our decision not to move forward.
During the Team Screening phase, you will be invited to calls with different members of the team. These calls will feel similar to the first screening call—and include the usual introductions and background — but will often focus on specific areas of your business, such as financials, technology and IP, team and hiring strategy, sales and go to market strategy, etc.
The aim is for us to get to know your business better and to start collating the information we need to write our investment memo, an internal document which is required for every deal before we go to Investment Committee.
From Team Screening, the deal can move to Deep Dive or Passed. If it moves to Passed, you will receive an email from us. Where we have had several calls and started to build a relationship, we may schedule a short call to give feedback where we think it can be useful.
This phase of the process is unique to each company but includes:
- Further calls with the founders to go into detail on specific topics or issues
- Reference calls: these can be commercial (i.e. with customers) or personal (i.e. with former employers or people who know the founders well)
- Research: as investors, we do a lot of research into markets and the competitive landscape to make sure we fully understand the wider context
If a deal has reached Deep Dive, then it will be put in front of the Investment Committee.
Investment Committee is such a grand term — it conjures up images of oak paneled rooms with oversized board tables surrounded by men in grey suits who are going to decide your future on the basis of a single pitch.
We have heard some horror stories that are not too far from this.
Our IC is really not like this at all.
First, our entire team is invited to IC meetings and everybody has an equal right to contribute — this leads to lively debates and better decisions.
Second, our IC comprises the same people you will have met during the earlier part of the process, so we are all fully aware of what your company does. We are not just flicking through some notes and a deck at the last minute.
Third, we work extremely hard — and probably overcommunicate with founders — to make sure there are no surprises. If we have concerns before an IC, we share these with founders to make sure expectations are aligned.
Like most ICs we do have a weekly meeting slot, but we also meet at short notice whenever necessary. Team members have previously joined IC calls from Rio and Bryce Canyon where we have agreed to issue a term sheet !
After an IC meeting, we will either move to Offer/Negotiating and issue a term sheet or move to Passed. If we moved to Passed, we will have a call with the founders to give our detailed feedback.
We’ve issued a term sheet
The final stages before Invested, which includes legal due diligence — to check everything is in order — and negotiation of long form legal documents.