Last month I launched a blog series on capital raising with a diatribe about why money managers actually need a pitch book. I got several emails afterwards asking if I had any advice about what should go in an effective pitch book. Do I have any advice? Silly question!

As a result of those inquiries, I came up with my Ten Commandments for Pitch Book Salvation. Follow them or be eternally damned to limited AUM.

FIRST COMMANDMENT – Thou shalt not create a pitch book longer than 25 pages or shorter than 17 pages. If a pitch book is too long, you’ve probably gone too far into details that may not be pertinent during a first meeting. The goal of a good pitch book is to get you to a second date, not to show everything you’ve got on your first meeting. If, on the other hand, your pitch book is too short, you risk leaving out critical information that investors expect to get in a first meeting.

SECOND COMMANDMENT – Thou shalt include your contact information. There are a lot of sinners out there on this one and you know who you are. I’d call you to let you know for sure, but I can’t find your contact information.

THIRD COMMANDMENT – If thou can say the same thing about other funds, it doesn’t belong in your first five slides. Your first five slides are about you. What makes you unique? What makes this the right opportunity and the right team? When you include phrases like “Our goal is to generate superior risk-adjusted returns” or “The principal’s have their own money invested in the fund” my reaction is, “Yeah, and…?” Ubiquitous and obvious phrases don’t help you communicate your unique value proposition

FOURTH COMMANDMENT – Thou shalt remember Miller’s Law. Investors (and really anyone for that matter) can only absorb about five facts at a time. When you get more than seven bullet points on a slide, you run the risk of overwhelming investors with information. Plus no one really has the time (or the desire) to read all that.

FIFTH COMMANDMENT – Thou shalt learn to use the slide master in PowerPoint so thy slides are uniform. Nitpicky, yes. But there are investors out there who are crazier about uniformity and attention to detail than I am. Have someone who is good with spelling and grammar check it over, too. 

SIXTH COMMANDMENT – Thou shalt include sample positions if thy legal counsel permits it. Most of the information in the pitch book is theoretical. Sample trades let me see what you do in practice.

SEVENTH COMMANDMENT – Thou shalt have slides on position/portfolio risk management AND operational risk management/infrastructure. Because portfolio risk is only one part of the risk equation.

EIGHTH COMMANDMENT – Thou shalt have thy pages numbered. If an investor skips ahead and asks a question that is answered later in your deck, you should be able to tell them what page to turn to while you discuss the answer.

NINTH COMMANDMENT – Thou shalt ensure you articulate the following: who you are, what you do, why it’s a good opportunity, why you’re good at what you do, who you work with (staff, outsourced services and basic service providers), what your terms are, how you manage risk, and how you perform. You are trying to establish your value and uniqueness. Leaving out any of this information makes it hard to learn to love your fund.

TENTH COMMANDMENT – Thou shalt use graphics periodically to make thy presentation visually interesting. Including VAMI charts on performance, org charts, or graphics to depict the security selection process and/or the portfolio construction process can help make your presentation pop. Also, many people react more strongly to visuals than words, so a VAMI chart in the place of a simple monthly return chart can be quite compelling.

And of course, it goes without saying that you need explanatory notes and bios (preferably with pictures to humanize the presentation) within your presentation. But if you follow these simple rules, you are one step closer to pitch book salvation. 

AuthorMeredith Jones