Never express your “use of funds” slide as percentages

When investors look at a startup slideshow, they're looking for something very specific. Yes, they want to know if the team is great and if the market is huge and if the problem is worth solving and if the solution makes sense. Of course. But another thing they are looking for is whether the founders understand the journey they are on.

If you step onto the VC treadmill, you are signing up for rapid and explosive growth. You must: If you don't, you don't fit the business models of venture capital. And that's okay: Not all companies are suitable for venture capital funding.

The other truth is that your funding amount includes a very literal deadline: if you run out of money, your business is over. So, before you run out of money, one of three things must happen:

You have an exit event, which usually means being acquired or going public via an IPO. The latter is more predictable than the former, and start-ups usually don't have this option. You break even and are able to run the business from cash flow. In other words, you make more money than you spend. You collect another round of funding.

For start-ups, the first two options are out of the question, which means you need to build a compelling picture for another round of funding. This is where startups often fail. Here's how to fix this problem.

This slide features two Texas-sized red flags. Can you tell what they are? Also: Yes, I "designed" this slide. That's why I'm getting help for the example how it should be done below. Image credits: Haje Kamps/TechCrunch+