Since we’re in the last throes of summer and many investors unplug at this time – not all, mind you, but this is the last hoorah of summer, so not the best time to send out that pitch deck, unless you happen to know the investor or someone in the fund. Then you’re more likely to get a response, which will most likely be, “looks interesting. Let’s revisit this after Labor Day.”

Been there, done that and tis the season.

That other season.

We’ve reviewed what goes into pitch deck ad nauseam, and as a reminder/late summer reading: this is what goes into a deck, points are here and here.

What about investors? You can have the greatest pitch deck in the world – although most of you don’t, trust us – yet many of you continue to miss the forest through the trees: that you are every bit the product as is the technology that you’re working on, if not more so and as a reminder, more late summer reading here and still, snake-eyes from investors, even those who invest in your space.

At this juncture in the tech funding landscape, traction and revenue count.

But terms – in this case, meaning how funds define themselves – are unclear. Many VCs who contend that they are ‘early stage’ are not, speaking in the strictest terms. An early-stage startup, with traction and month over month recurring revenue, yet has never raised outside funding, may be too late for a pre-seed fund, and too early for some of the so-called early-stage VCs who wants to see more, more, more. In other words, they want some sort of assurance that you’re going to get them to an exit, and preferably a many-fold one.

We feel that they’ve been spoiled by their investments in later-stage startups and apply the same bar to early stage. Fair enough, but there’s a big difference between raising the bar a bit – and asking for the broomstick of the Wicked Witch of the West.

There are no rules in the investment world – any more than there are rules for entrepreneurs, again, strictly speaking. There are founders who’ve raised fortunes and where are the companies now, Elizabeth Holmes being a prime example? And founders who were unable to raise funding for whatever reason – and still managed to build successful companies, Mailchimp being a great example, as is, ironically, GoFundMe.

Founders should read the Mailchimp story. It’s a good one. And note that Mailchimp still maintains its freemium model – as well as paid versions.

Do investors know everything? As yahoo!finance (via Bloomberg) reported, “In the early days of building his email-marketing startup Mailchimp, Ben Chestnut was warned by venture capitalists about the company’s imminent demise should he not take their money and advice.”

But the article’s headline says it all: Investors Predicted Mailchimp’s Demise. It Sold for $12 Billion

Oops.

Investors go through decks quickly – in just a few minutes, truth be told. If that. They have a lot of decks to go through, which is why we always tell you not to bury the lead. You need to get them in the first slide or two, or you’ve lost them forever.

But you also need that outlier, and good idea to put it front and center and grab them immediately.

If you’re in a so-called ‘crowded space’ and have a special sauce that is a potential game-changer – and note that many spaces are crowded because chances are no one figured out that magic formula. If you did, include it in the deck! You don’t have to give away the IP, but good idea to acknowledge the problem that seems to be the stumbling block in that space – that investors in the space no doubt know is there – and intrigue them sufficiently to get to the meeting. Then you can tell them more. Without giving away your IP until the money’s in the bank.

Things are changing in the investment world, and in case you missed it, SEC makes biggest overhaul of $20T private equity, hedge fund industry in years. That means VCs, too. In short, said MSN, “The new rules require private funds to issue quarterly fee and performance reports and disclose certain fee structures while barring giving some investors preferential treatment over redemptions and portfolio exposure … The newly approved rules (also) require fund managers to disclose so-called “side letters” – an industry practice through which funds can offer some investors special terms – when they are financially material. Offering some investors special redemption terms or detailed information about portfolio holdings was prohibited.”

We don’t know how this will affect investments and investors going forward, and only time will tell. But transparency is always a good idea, on both sides of the table.

Aside: we’ve no doubt certain investors will find ways to circumvent the new regulations. Case in point: “Game Of Thrones’ Kind Of Thing”: Tech Billionaires Buy 55,000 Acres Outside San Francisco To Start New City . Don’t like the hub? Build your own. Don’t like the regulations? Wonder how long it’ll be before they move offshore and found their own sovereign nation…

As we said, this last week of August tends to be a quiet time for investors, which isn’t to say that you should stop working, but do use the time wisely, and keep in mind that Mailchimp was a pivot from their original business – building websites for clients – and they moved into the very crowded email marketing space because their passion was helping small businesses grow, and as we know, when the focus is on small businesses, investors tend to view it as a lifestyle business.

Investors can’t always see the forest through the trees and given Mailchimp’s journey, our advice would be to focus on your passion, make it something that a sizeable segment of the business market can use and would be willing to pay for, and keep in mind that – those early potential investors warnings to Mailchimp aside – $12B can bring one a fairly nice lifestyle, as we go onward and forward.