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The 12 Most Abused Words in VC Pitch Decks

Apr 15, 2021 9:57:00 AM | Different Funds

 

Pitch decks are a critical material in venture capital fundraising — but some words have become so overused by GPs that they’re starting to lose meaning. Here’s our take on the most abused words in VC pitch decks.

When a VC goes to raise a new fund, undoubtedly they’ll spend hours crafting and refining their pitch deck. Often the first marketing material an LP will see, it sets a first impression and (done well) can kickstart a relationship that successfully leads to investment.

At Different, we see a lot of VC pitch decks — over the last couple years, we’ve had hundreds come across our desks. And when you see as many pitch decks as we do, certain words and phrases start sounding repetitive. What might seem to the GP as the perfect way to encapsulate their strategy and vision becomes devoid of meaning once an LP has seen that same phrasing a few dozen times. Eye-popping sections morph into glaze-over sections.

Of course, there’s natural tension in deck design and fundraising positioning. GPs are expected to be ‘differentiated’ but are also judged by whether they ‘talk the talk’ and hit key soundbites that LPs are looking for. It’s a tightrope-walking exercise reflected in the ever-recurring question: what makes a great deck?

With this in mind, we decided to try to quantify just how over-used the most abused words in VC pitch decks are, and shed some light on an opaque topic. We extracted the text from every VC deck we collected through the end of 2020, split out every unique word used, and tallied the number of instances of each. In total, this encompassed tens of thousands of words across thousands of slides.

In this post we’ve pulled out some of the most interesting abused words, ignoring common but necessary words (e.g. “venture” and “capital”) and basic articles and prepositions (e.g. “the”). This isn’t meant to be super scientific (we didn’t search for all synonyms of each word to get a fuller picture of the over-use of each concept, we only took moderate steps to clean the extracted text, etc.). However, it nonetheless offers a fairly robust picture of the most commonly leveraged words and provides an (underestimated) sense of just how abused these words are.

1. Tech

“Tech” (and its long form “technology”) is one of the single most used words we found in VC pitch decks. Only “fund” and “invest” are used more frequently. On average, it appears nearly 20 times in each deck

Of course, we weren’t surprised tech is used frequently, nor do we suggest it should be eliminated from decks. But the sheer frequency with which it’s seemingly tossed about to amass 20 mentions in what are often 20 slide decks is stunning. 

It’s also worth noting the nondescript nature of “tech.” For some, technology represents the cutting edge (quantum computing, nanotech, synthetic biology), while others use it to describe dog walking marketplaces and websites selling unbranded consumer goods. These widely differing connotations means “investing in tech” is an extremely ineffective phrase for conveying what a fund actually invests in.

2. Global

Sometimes used in reference to deal flow, other times the geographic distribution of the portfolio, and yet other times the scope of the VC’s network, the words “global” or “world” average more than 8.5 instances in each deck.

Take a second to think about what claims of “global” mean: if a GP purports to source startups across the globe, they’re implying they have connections in and vet investments from Slovakia, Vietnam, Kenya, Chile, and 190 other countries. Such a claim (made 8.5 times) seems slightly misleading if the reality of their portfolio spans Silicon Valley, a few states, and Canada. 

Although there are merits to communicating an openness to deals regardless of geography (if it aligns with the thesis), in many cases, assertions of “global” are simply too grandiose. This is best reserved for VCs that have a unique advantage or background that results in truly global deal flow, instead of stretching the claim to apply to everyone.

3. Network

Every VC touts the strength of their network. It’s often described as the number one asset of the firm and the primary driver of deal flow (a viewpoint which itself warrants re-examination in light of it being a driver of homogeneity and inequality in capital access). While networks absolutely have value, bear in mind that savvy LPs are quick to discount them and hunt for more credibility, in part due to its overuse and overemphasis (see our 19 Tips for Emerging Managers report for more).

Considering this, on average, a pitch deck uses the word “network” just under 6 times. 

It’s certainly valid for a GP to show an LP why their network brings value to portfolio companies or demonstrate how their firm is a thought-leader in its field, but excessive references to some ethereal “network” without concrete examples of who’s actually in that network can be a turn-off.

4. Data

Averaging over 5 uses per deck, “data” is another term VCs can’t stop referencing.

Data certainly matters, and for funds with AI/ML centric theses there will naturally be a lot of instances of “data.” But given the broader trends around the growing (mis)use of “AI” and “machine learning,” the prevalence of this word might also be a reflection of bandwagon buzzword-chasing.

5. Unique

On average, the words “unique” or “only” are used 5 times in a deck. While it’s obviously important to sell an LP on the “uniqueness” of a fund (after all, if a VC isn’t offering something unique, why wouldn’t an LP invest elsewhere), too often we see unfounded claims of uniqueness that simply undermine confidence in the GP’s market knowledge. 

There are more than 1,600 VC firms in the US alone, spanning the full spectrum of sectors, stages, and geographies. To claim status as the “only VC doing x” will more likely signal a lack of market awareness than true differentiation.

6. Win

VC pitch decks average 4 instances of “win” per deck, an interesting reflection of the competitive stance with which firms market themselves. Perhaps that’s why some LPs have been known to screen for GPs that were college athletes (seriously…).

But what’s more interesting is the dichotomy between the excessive use of “win” and the simultaneous insistence on a vast network of “coinvestors” (a word which itself appears 2.5 times per deck). It’s a peculiar combination that a fund can position itself as both competitively better than its peers and cooperatively on-par when it comes to selecting portfolio companies.

7. Expert

On average, “expert” is used 3.1 times per deck. While the GPs being experts (or having access to experts) is certainly appealing for specialist funds, the connection for the 30% of US funds adopting a generalist thesis is less clear. What exactly is an expert in generalism?

Joking aside, we understand LPs are looking to back experts of some kind, and recognize that an average of 3.1 instances per deck may be fairly reasonable. Just ensure there’s actual proof of expertise when “experts” are referenced, and deliberately select experts that align with your thesis.

8. Innovation

Averaging 2.5 instances per deck, “innovation” is understandably a term VCs like to leverage. The entire venture capital industry is designed under the pretense of funding and fueling innovative new companies bringing radical change to replace incumbents.

But too often, the “innovation” a firm references isn’t actually, well, innovative. Like with many words on this list, when “innovation” is used as a buzzword in lieu of actual examples, it carries significantly less weight.

9. Certain

“Certain” appears more than 1.5 times per deck, while the slightly less assertive form “confident” appears an additional 2 times per deck. Given the extreme uncertainty inherent in VC and early stage startups, excessive insistence on certainty and confidence can sometimes have the adverse effect of appearing blind to the natural risks associated with the asset class.

10. Proprietary

On average, “proprietary” is used 1.3 times per deck. It’s interesting to see just how ubiquitous “proprietary” (often in the phrase “proprietary deal flow”) has become in the world of venture, given it’s almost never used in any other context.

Assertions of “proprietary deal flow” come across particularly hyperbolic when followed up with a slide proudly displaying a hundred coinvestor logos — proprietary deal flow, by definition, doesn’t result in the same investments as a hundred other VCs.

11. Value-Add

“Value-add” appears 0.64 times per VC pitch deck. We note this term in our list of abused words not because it’s necessarily over-used, but because it’s often unsubstantiated when used.

A recent report out of the UK firm Forward Partners found 92% of VC firms describe themselves as “value-add” investors, yet 61% of founders feel VCs under-delivered on value-add and 47% believed their investors had little knowledge of the sectors they were investing in. Providing capital and a couple introductions isn’t sufficient for the title of value-add investor.

12. Top Quartile

Some LPs have joked with us that apparently every VC is top quartile. Although a bit dated, a 2007 Peracs report found 77% of the 500 PE and VC firms they studied claimed top quartile performance. Our analysis found “top quartile” or “top decile” appeared 0.55 times per deck, suggesting at least half of decks are making such a claim. Considering Fund Is account for about a quarter of the decks we analyzed (and so likely have no prior performance to point to), it’s reasonable to assume about three-quarters of funds with prior performance are still claiming top quartile returns in pitch decks.


This post was obviously intended to be lighthearted. But on a serious note, empty clichés (despite sometimes working for large established VCs) are an easy way to lose prospective LPs that are already searching for an excuse not to back a new emerging manager. 

Also, many of the abused words in this list are actually reflective of critical topics to cover in a pitch deck. Our point isn’t to grab a good thesaurus and avoid these words at all cost — rather, it’s to be intentional in your language and to simply follow another age-old cliché: show, don’t tell. 

Bear in mind the scope of the VC market, and remember that LPs see a ton of decks. Specificity, concrete examples, and unique explanations are much more likely to catch an LP’s attention than are buzzword-heavy grandiosities that become quite quotidian when they’re in every deck.

 

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