The Search Fund Pitch Deck

April 17, 2017

by a searcher from Valparaiso University in Paris, France

One of the things that has been interesting to me as I’ve started exploring the search fund space is that PPMs seem to be the primary tool through which search fund entrepreneurs tell their story to potential investors. Coming from the VC and early stage technology world, I’m very used to both startup founders and people raising their own VC funds (example here from Notation Capital) using pitch decks of some sort as the basis for discussion with potential investors.

Obviously, a PPM plays a role in the fundraising story for VC funds…but even as you move up the stack further from small early stage VC funds to large, established PE firms, the pitch deck seems to be the primary interface for potential investors. I was speaking this past week with someone who runs investor relations at a large PE firm that has raised half a dozen funds and he confirmed this to be true at his level.

Curious to hear the thoughts of people here on using approaches other than the PPM on the fundraising trail. Have you build pitch decks for your funds? Have they been successful? Why has the search fund space been more reliant on the PPM as a storytelling tool than other areas? Or has it not been?

Thanks!

Reply by a searcher
from The University of Chicago in Chicago, IL, USA

Before starting my fundraising efforts I thought the same way. So accordingly I put together an investor presentation, had a bunch of copies printed, and brought multiple books to each meeting. I honestly only opened it at most 3 times over 20+ meetings so in the end I wasted a fair bit of money on unnecessary printing. As a former investment banker I still felt more comfortable having a deck in my hand when walking into a room but it seemed to provide little additional value beyond being a security blanket for me. My meetings with investors were way more job interview than sales pitch, investors have the questions they like to ask and even if the answers corresponded to a page in the deck most showed zero interest in opening the book. However, if I was meeting with investors outside of the standard SF investor universe I think an investor pres would be much more important.

Reply by a searcher
from Babson College in Boston, MA, USA

Hi Brett, I'm of the opinion that a pitchbook is more appropriate when soliciting anything, especially a person/institutions money. A PPM serves as necessary tool that helps tell your story, but the format is questionable for a sales situation. I try to think as though I'm the one getting sold and being able to explain the pitch clearly/concisely, telling them who you are, why you're doing this and what's in it for them is always better given the average person's attention span. The PPM should already be memorized in the event of questions and just by simply believing in your offering. In my opinion, pitchbooks just have a better flow to them for your average retail investor. Knowing your audience is key and might determine which document you put down. Sound like your friend at the PE group has some additional data backing pitchbook over PPM.

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