Latest / The Series A Show with Fexingo: Early-Stage Funding, Pitch Decks, and Startup Milestones / Why More Startups Are Ditching Pitch Decks for Data Rooms
Transcript
- Lucas: So a startup raises twenty-five million dollars — and there is no slide deck. No Keynote, no Canva, no carefully designed fifteen-slide PDF. Just a data room and a two-page memo. That's happening more and more, and I think a lot of founders are still nervous about it. Luna: I've heard that pitch decks are dying, but I wasn't sure if it was real or just something people tweet. Do you have a specific example? Lucas: Yeah — the ex-Meta CTO who just raised a two hundred and fifty million dollar climate fund. That was a zig when everyone zags move, and reportedly they didn't use a traditional pitch deck. They put together a data room with their thesis, their team bios, and a few case studies, and that was enough to get commitments. Luna: Wait — two hundred and fifty million dollars with no slides? That feels like an exception, not the rule. Who is this person? Lucas: It's Mike Schroepfer, former CTO of Meta. He left a couple years ago and has been investing in climate tech quietly. The fund is called something like Gigascale Capital, and the whole pitch was basically: here's our network, here's our track record, here's our approach. Investors who already knew him didn't need the song and dance. Luna: Okay, so that's a celebrity founder. But what about an early-stage startup with no name recognition? Can they ditch the deck? Lucas: Great question. I think the answer is: it depends on your investor. But the trend is real. I've been tracking this for a while, and more VCs are openly saying they prefer a data room over a polished pitch deck. They want to see the numbers — ARR, churn, unit economics, cohort retention — not a vision statement. Luna: So what would a data room look like for a typical SaaS startup raising a Series A? Lucas: Think of it as a password-protected folder with maybe five to ten files. A one-page executive summary, a financial model, a customer acquisition cost breakdown, a product roadmap, and key metrics dashboards. No animations, no brand fonts. Just raw data and clear explanations. Luna: That actually sounds harder than making a pitch deck. Because if the numbers aren't good, you can't hide behind a nice slide. Lucas: Exactly. And that's the point. Investors are tired of being sold to. They want to diligence early and fast. A data room forces transparency from the start. If your metrics are strong, it actually speeds up the process — they can share the data room with partners without you having to re-pitch. Luna: I can see that saving time. But doesn't it also mean you lose control of the narrative? A pitch deck lets you tell a story, frame the market, build excitement. Lucas: You're right — a deck is a storytelling tool. But a data room doesn't mean zero narrative. You still have the executive summary, and you can include a two-page memo that tells the story in writing. It's just more concise and data-backed. And honestly, some investors say a good memo is more persuasive than a deck because it forces the founder to think clearly. Luna: I remember hearing that Sequoia famously asks founders to write a memo, not a deck, for some of their later-stage investments. Lucas: Right, but that's been true for a while. What's new is that earlier-stage VCs are adopting it. I talked to a partner at a top-tier fund last week — she said for Series A, she now asks for a data room before the first meeting. If the data room is solid, she'll schedule a call. If it's messy, she passes. Luna: That's a big shift. So what should a founder include in their data room to pass that gate? Lucas: Let me run through the essentials. First, a financial model that's clean and logically built — not just projections, but the assumptions behind them. Second, customer data: net dollar retention, churn, ltv to cac ratio. Third, a market analysis — TAM, SAM, SOM, with sources. Fourth, competitive landscape. Fifth, team backgrounds. And sixth, any IP or technology differentiators. Luna: That's a lot. How do you know if your data room is good enough? Is there a litmus test? Lucas: I'd say: if you can send it to an investor and they can make a preliminary decision within thirty minutes without talking to you, it's good. If they have to ask basic clarifying questions, it's not ready. The goal is to reduce friction for the investor. Luna: So it's almost like a pre-pitch. The data room does the selling before you even get on the call. Lucas: Exactly. And that's efficient for everyone. The investor saves time, and the founder doesn't have to do ten introductory calls with people who aren't actually interested. The data room filters for serious buyers. Luna: But what about the emotional connection? A lot of early-stage investing is about the founder's vision and passion. A data room can't convey that. Lucas: It can't. And I don't think the pitch deck is going away entirely. For some investors, especially ones who invest on gut feel or founder-market fit, the deck is still important. But for data-driven funds — and there are more of those now — the data room is becoming the primary artifact. The deck is just a conversation starter. Luna: If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. It's a small gesture that keeps us independent. Lucas: Yeah, no pressure at all. If you found something you can use in your own fundraising, that's what matters. And if you want to help more founders hear it, that link is there. Luna: So back to the data room — is there a risk that by removing the deck, you also remove the chance to wow an investor with a compelling narrative? Lucas: I think the narrative is in the numbers and the memo. A well-written memo can be incredibly compelling. It shows you can think strategically and communicate clearly. And the data room gives you credibility. When you finally get on the call, you're not defending your slides — you're answering deep questions about your business. That's a better use of time. Luna: I want to try this with a founder I'm advising. But I worry that if they send a data room cold to an investor who expects a deck, they might seem unprepared. Lucas: That's a valid concern. The key is to ask the investor's preference upfront. In your initial email, you can say: 'I have a pitch deck and a data room — which would you prefer?' Most will say data room now. And if they say deck, you still have it. You're not losing anything. Luna: Smart. So it's not about choosing one over the other — it's about being prepared for either. Lucas: Exactly. And I think the founders who adapt early will have an advantage. The trend is clear: investors want less fluff and more substance. The data room is the new gold standard for serious fundraising. Luna: It makes sense. If I'm investing my own money, I'd rather see a spreadsheet than a slide deck. Lucas: Right. And that's what's driving it. So for any founder listening: start building your data room now, even if you're not fundraising yet. It will force you to understand your business better. And when you do raise, you'll be ahead of the curve. Luna: Great advice. And a nice note to end on.