Latest / The Series A Show with Fexingo: Early-Stage Funding, Pitch Decks, and Startup Milestones / How Series A Decks Are Adding a Founder Liquidity Slide
Transcript
- Lucas: So there's a new slide showing up in Series A decks lately, and it's not about the product or the market or even the team. It's about the founder's personal bank account. Luna: Wait, founders are putting their personal finances in the deck? That sounds like a privacy nightmare. Lucas: It's more nuanced than that. I've seen three decks in the last month with what I'd call a founder liquidity slide. It's a single page that outlines whether the founder has taken a salary, how much equity they've sold in secondary transactions, and what their cash runway looks like personally. The message to investors is basically, 'I'm not desperate, and I'm not going to panic-sell the company at the first offer.' Luna: But isn't that a bit like showing your cards before you sit down at the poker table? Lucas: It can be, if it's done wrong. But the investors I've talked to say it's actually a credibility signal. When a founder is willing to say, 'I've got twelve months of personal runway, I'm not taking a salary, and I haven't cashed out any equity,' it tells them this person is in it for the long haul. And in a market like this one, where we just saw the S&P 500 up about four percent on the week, investors are looking for founders who won't get spooked. Luna: I get the confidence angle, but what if the founder is actually struggling? Like, they're living off credit cards and hoping the raise closes before the rent check bounces. Lucas: That's the risk. If a founder is desperate, a liquidity slide can expose that. But I've also seen founders use it to flip the power dynamic. There was a case last year where a founder had already sold a small slice of equity in a secondary, enough to have a year of runway, and he put that on the slide. The message was, 'I can walk away from this deal and be fine.' That changed the negotiation entirely. Luna: So it's like a power play wrapped in a transparency slide. I can see why some investors would love it and others would hate it. Lucas: Exactly. And the debate is getting more urgent because of the macro backdrop. The IPO window is cracking open again, we're seeing late-stage companies get real liquidity events, and that's trickling down to earlier stages. Founders are starting to realize they don't have to wait ten years to see a dime. But that also means investors are more cautious about founders who might jump ship at the first exit opportunity. Luna: Have you seen any data on how common this slide is becoming? Lucas: I don't have hard numbers, but I've talked to about a dozen partners at early-stage funds in the last month. The general sense is that maybe ten to fifteen percent of decks are including it now, up from virtually zero a year ago. It's still rare enough that it catches attention, but common enough that it's becoming a standard option in the pitch deck toolkit. Luna: Interesting. And what does a well-done slide actually include? Is it just a screenshot of their checking account balance? Lucas: No, nothing that invasive. The good ones are more like a summary table. They might show founder salary history, any secondary sales, sometimes a rough personal runway estimate. And they'll often frame it in terms of alignment: 'Here's my personal liquidity position, and here's why it means I'm fully committed to this company for the next five years.' It's a commitment device. Luna: That actually makes a lot of sense. If you're a founder who's already taken a big salary, investors might worry you're more interested in the payday than the mission. But if you show you've been frugal and have your own runway, it proves you're not just in it for the money. Lucas: Right. And there's a flip side where some investors actually want to see that the founder has taken some money off the table. There's this idea that a founder who's been grinding for six years with zero liquidity might be more likely to make irrational decisions later, like selling too early or taking a bad term sheet just to get some cash. A small secondary sale can show that they're not desperate. Luna: So it's a fine line between showing you're not desperate and showing you're not distracted by money. Lucas: Exactly. And that's why the slide is so controversial. It's deeply personal. But in a market where trust is at a premium, some founders are deciding that radical transparency is the best way to build it. Luna: And you mentioned this is tied to the broader liquidity environment. Are we seeing more secondary markets opening up for private companies? Lucas: Yeah, there's definitely more activity in private secondary markets. Platforms that let employees and early investors sell shares before an IPO are getting more mainstream. And that's giving founders a legitimate way to create personal liquidity without leaving the company. It's not just for the unicorns anymore. Even Series B and C companies are seeing secondary transactions. Luna: That's a huge shift from even five years ago, when your money was locked up until an exit, period. Lucas: Exactly. And that's driving the interest in this slide. If a founder has done a secondary sale, they want to highlight it because it proves they're sophisticated about their finances and that they've already been vetted by another investor. It's like a pre-validation. Luna: So, if I'm a founder getting ready to raise, how do I decide whether to include this slide or not? Lucas: I'd start by thinking about what story you're telling. If you have a strong personal liquidity position, use it to your advantage. If you're living paycheck to paycheck, maybe you don't want to highlight that. But even then, you might want to address it preemptively to avoid the assumption that you're desperate. It's a judgment call. Luna: And what about the flip side, where investors might see it as a red flag if you've taken too much money off the table? Lucas: That's a real concern. If you've sold a huge chunk of equity, like more than twenty percent, investors might question your commitment. But a small secondary, maybe five to ten percent, is generally seen as a positive. It shows you're not all-in on paper, but you're still deeply invested. It's about balance. Luna: I can see why this is such a hot topic. It really gets to the heart of the founder-investor relationship. Lucas: It does. And it's fitting that we're talking about this on the same week that a headline came out about Andreessen Horowitz's Vijay Pande saying they're not doing '30 bets a year' anymore. The industry is shifting toward fewer, more deliberate bets, and that means investors are spending more time getting to know the founder personally. The liquidity slide is just one way to accelerate that trust. Luna: That's a great connection. And it's not just about the money, it's about the founder's mindset and long-term vision. Lucas: Exactly. So if you're preparing a Series A deck this fall, it's worth asking yourself: is my personal financial situation a signal of strength, or a potential weakness? And how can I address it in a way that builds trust? Luna: Before we wrap up, I have to say, this episode was packed with useful insights. It's rare to get this kind of candid talk about founder finances. Lucas: Glad you found it useful. And on that note, a quick honest thing. We keep this show free and ad-free, and that's only possible because a small group of listeners chips in a few bucks a month. If you've been getting value out of these conversations, you can support us at buy me a coffee dot com slash fexingo. It genuinely helps us keep making episodes like this one. Luna: Yeah, it's such a low-key way to keep the lights on. And no pressure, but if you can, it means a lot to us. Lucas: So, back to the slide. One thing I didn't mention is that the best liquidity slides I've seen don't just list numbers, they tell a story. For example, one founder had a slide that showed he'd taken a modest salary but had also invested a significant portion of his savings back into the company. That showed he had skin in the game in a very literal way. Luna: That's a powerful narrative. It's not just about the money, it's about the sacrifice and commitment. Lucas: Right. And I think that's the key takeaway. The liquidity slide is less about the actual numbers and more about what those numbers say about the founder's character and alignment. As we see more of these, I expect we'll see more nuance in how they're crafted. Luna: And for investors, it's a new lens to evaluate founders, something beyond just the product and the market. Lucas: Exactly. It's a way to assess the person behind the pitch. And I think it's a positive development for the industry overall. More transparency, more honesty, and a better understanding between founders and investors. Luna: I'm curious, have you seen any examples where the slide backfired? Lucas: Yeah, one founder I know of tried to use it to signal strength, but the numbers just showed he had a lot of personal debt. It worked against him. Another founder revealed that he'd already sold a significant chunk of equity, and investors started questioning whether he was still hungry. So it's a double-edged sword. Luna: So it's not for everyone. It really depends on the founder's individual circumstances. Lucas: Definitely. And that's why I'd advise founders to think carefully before adding it. If you're going to include it, make sure it's telling the story you want to tell. Luna: Great advice. Thanks for covering this, Lucas. I feel like I have a much clearer picture now. Lucas: Anytime. And for our listeners, if you're raising a Series A, this might be a slide worth considering. Just make sure it's authentic and aligned with your narrative.