Lessons from Pitch Deck Mountain.
There’s plenty of chatter these days about the dreaded “growth-stage gap” in climate tech and hardtech — the Bermuda Triangle where many promising startups vanish before they can raise that coveted Series B. As you can imagine, with over 120 portfolio companies, and a couple billion dollars under management for the broader ecosystem, Lowercarbon sees a LOT of Series B action. Most of these companies land on my desk, and trust me, I’ve sifted through enough pitch decks to wallpaper the Earth (not that I would, of course — paper waste and all that.)
So, you can imagine the death and value destruction I have witnessed with the countless companies that stumble on their way from Series A to B. But I’ve also seen a lot of companies flat out nail that Series B raise. There’s no one-size-fits-all answer, but here are three rules of thumb that are always the case when a successful B comes together.
Rule #1: Show me the traction.
One of the biggest mistakes that founders make is not evolving their pitch to match the changing expectations of a late-stage investor (you’re not in YC Land anymore!). By the B, the goal is to highlight your actual deals and paying customers right up front. Instead of a long windup starting with the entire addressable market and high-level TAM, show us who is actually cutting checks to buy your stuff. Don’t make investors hunt through some sleepy consultant’s slides for your traction.
An example of a company that did it right was Formo, a food tech startup focused on producing animal-free dairy products using precision fermentation. When we first got on board in 2021, we liked the tech and felt that founders Roman and Raffael had a lot of potential. But by the time their Series B came around, their pitch to external investors had to hit a new gear. A dissertation on the size of the overall food market would’ve been a distraction. They didn’t have to remind us that, you know, everybody eats.
Instead, the focus was on their retail scale-up contract with Rewe, a supermarket chain with 15,000+ stores in 21 countries across Europe, including Germany, Austria, Italy, and Switzerland. Even more important, the team had a list of 10+ retail partners lined up to follow, with velocity that pointed up and to the right. Based on that list, we could map the real market from their existing traction.
The lesson here? Even if it worked at the seed or A, don’t start with background explainers. Hook us right away with how you’ve proven your worth to real customers, via real contracts, in the real, exchanging-money-for-goods-and-services world. Remember that whole getting into business to make money thing? Yeah, lead with how you are doing that.
Rule #2: Don’t short-change unit economics. (Not even you, hardware folks.)
Hardware founders, we can hear you shouting at us through the screen: “We can’t just hack together some code in a weekend and say that we’re scalable!” We get it. Hardware is hard. But no one’s handing out points for degree of difficulty. Hardware startups at this stage are under scrutiny from investors to show positive gross margins, just like everybody else. Make these numbers obvious to your growth-stage investors — and if the numbers aren’t where you want them to be, show us the clear path towards getting there. The deeper you move into growth rounds, the more intense the scrutiny on per-unit profitability. Your Series B pitch needs to prove that you can sell your product for more than it costs you to make it. I know, I know, I sound like a skipping record. Speaking of. Vinyl? Pretty good margins.
Let’s look at unspun, the fashion startup that moved from concept to execution at lightning speed. In just two years, the company developed a working prototype of a robot that weaves jeans with zero waste. Not only are the products cheaper than overseas alternatives, but they’re also made here in the U.S. (No need to worry about your pants getting stuck on a cargo ship.) So, it’s no surprise that major retailers like Walmart are already signing on. Clearly, this team is checking a lot of boxes, but what we love more than anything is their rock-solid business model. With strong margins, well-managed payback periods, and controlled hardware costs, unspun is proving you can scale fast, make clothes cheaper, and still make more profit than traditional fast fashion — with every pair of jeans they sell.
Of course, not every company has a working prototype at this stage. We’ve also seen startups raise successful Series B rounds with convincing modeling of their unit economics through digital twins. (I mean, what would a VC blog post be without at least one reference to AI?) Even if your scale-up means you don’t have a full-on factory by the B, there are ways to meet these expectations and demonstrate your profit potential.
Rule #3: Show how you’re building a great company, not just great tech.
If you’re a Ph.D. founder who has built a business from the ground up, there comes a point in your development where the work moves from lab-scale to commercial-plant scale. You don’t need to have all the answers — but to entice a late-stage investor, you’ve got to show you’re hiring the people who do.
Wouldn’t you know it, that’s precisely what thermal battery company Antora did. Founders Andrew Ponec, Justin Briggs, and David Bierman lived and breathed mind-blowing tech since their time doing pioneering work on advanced heat engines and energy efficiency at Stanford and MIT. So, it wasn’t a shock when they kept blowing through their tech milestones. But soon, they ran up against a problem, albeit a great one to have: Everyone wanted their batteries. So, ahead of their Series B, the Antora founders laid out a plan for their use of proceeds to include teaming up with battle-hardened ops folks who could guide them through growth and help them meet the demand of hundreds of millions in contracts — while maintaining their C-suite roles. Andrew, Justin, and David are growing into the business demands of scaling a company, and part of that is hand-picking the right team to help. Experienced management teams who can handle industrial scale-ups? Now, that’s my love language.
Here’s to making your B a W.
Obviously, there’s a lot more we could say about landing a Series B. But if you (1) lead with traction, (2) show clear unit economics, and (3) lay out a hiring-for-growth strategy, you’re well on your way to money in the bank. Successful companies show exactly how they will scale. You went from 0 to 1 with your tech after the seed, and 1 to 10 with your early sales after the A — and all that’s great. Now, tell us how you’re getting from 10 to 1000. The companies that knock it out of the park aren’t just good at what they do; they articulate how they’ll go from proving their tech to dominating a market. That’s what gets us (and other investors) fired up.
If this piece got your head nodding, and you want a partner who doesn’t just write checks but also helps companies scale — give me a shout. We’ll punch your Series B card in no time.
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