Carta’s headlines were better than this one

(Originally eShares)

Source: Carta itself.

Date: Early 2015

Outcome: Raised $7M. Raised $17M later in 2015 and another $42M in 2017.

Here’s a common error that founders make on their decks: They write lazy, boring headlines. Yes, investors have a real list of things you need to hit in your deck, but they’re not learning to read. Literally title a slide “Problem” and you’ve just wasted 30% of your visual space. And because you won’t be there to walk them through the deck the first time, you’re forcing them to understand whatever complicated or abstract visual you use with incomplete context.

There aren’t enough hours in the day. They’ll either pass without a second thought or you’re going to have a single unproductive meeting with them and that will be that.

Carta (again, formerly eShares) shows us how it’s done. This thing is a masterpiece of headlines. Watch this.

What is eShares?

eShares is capturing the next generation of IPOs. We are an SEC registered Transfer Agent. We issue electronic shares, options, debt, and derivatives. We automate their approval and compliance and track the shareholder registry.

How do you make money?

We charge $20 per transaction and everything else is free. Then we add bundle-on services such as 409A.

How are you doing?

We are growing revenue 40% month-over-month. Cohorts continue to contribute over time. Our customers love us. I mean, they *really* love us. And they are getting larger and larger and getting traction with the law firms. Our product is beating Solium head-to-head. Perkins Coie chose eShares after an in-depth evaluation.

We are lean and mean. We are a small product focused team raising $6-$8M Series A to converge private market.

That is all in the headlines. I changed nothing and omitted nothing. With this deck, an investor can understand this company in less than 60 seconds. It directly hits everything on the list except the specific customer problem, and that ends up addressed later on. In any case, their demonstrated growth and traction implies the existence of a real problem that the team understands very well.

Because the full story is told in the headlines, the rest of the content carries much more weight — when an investor has a question, it’s usually addressed somewhere in the details. The deck essentially pitches itself.

So how does that square with CEO Henry Ward’s takeaways from this fundraising process? If the vision was so clear, why did so many VCs pass? (Read the whole post. It’s wonderful.)

It is hard to get investors excited about a problem that doesn’t personally hurt them. Even one degree of removal from the problem is too far for many VCs. If they haven’t personally managed a cap table for years because their lawyers are doing it or their founders are handling it, they were never going to fall in love with the problem. And if — as Henry suggests — their addressable market wasn’t large enough for dollar signs to trump all other concerns, then they needed to deeply understand and care about the problem and believe that the team could go all the way.

It’s a grind to make that happen until you find the perfect investor. And it can take a lot of no’s to get there. A good fundraising process can feel very slow… until it closes at lightning speed.

Other notes:

  • I’m not a fan of the visuals that are basically examples of what the product looks like. Especially in the first part of the deck where they’re showing off electronic stock certificates and SEC documents that don’t really mean anything to the investor. But I’m not sure what else I would put there. If I thought it was a real problem or I was looking to shorten the deck, I’d probably compress those slides 4-7 into a single, all-text slide.
  • Great use of the market landscape right at the beginning to illustrate where the other players in the market are and how Carta will land and expand.
  • Solid discipline on the revenue growth slide. They may have been able to display a very impressive paying-customer conversion rate — if it’s growing over time, that’s a great sign — but the slide was already cluttered and the revenue speaks louder.
  • Carta may be telegraphing a vision of a marketplace for private equity by practicing it on its own employees.
  • Okay, they’re practically trumpeting it.