The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company
The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company
Coinbase is a crypto unicorn reportedly worth around $100 billion and going public tomorrow. This is the pitch deck that helped them raise $600,000 in 2012.
Cryptocurrency exchange Coinbase is undoubtedly one of the hottest, biggest, and most important companies in the digital asset space today. Born in 2012, just three years after Bitcoin itself, Coinbase has been through many ups and downs.
Just like Bitcoin, it has survived the crypto market’s highs and lows, and today is the second biggest digital asset exchange in the world and one of the go-to platforms for people who want to buy and sell Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.
Therefore, it is not surprising at all that Coinbase’s Initial Public Offering tomorrow is one of the most anticipated and potentially the biggest IPO this year. Not only it’s the first crypto unicorn to ever go public, rather it’s a move that will definitely bring crypto markets to the mainstream (I’ve written more about this in my latest Weekly Blockchain & Crypto Digest).
If one would believe the Nasdaq Private Market data, Coinbase stock traded at an implied valuation of circa $100 billion. After going public, it would be the 6th largest publicly traded financial institution in the US. Just let that sink in…
Having in mind that the IPO is just around the corner, I think it is a brilliant time to revisit the original deck used by Brian Armstrong and Fred Ehrsam to raise $600,000 of seed capital in 2012 (to date, Coinbase has raised over $840 million).
It must be noted though that this is not a pitch deck per se. These slides were actually first presented at the Y Combinator demo day and later used by the team in their discussions with investors.
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The Perfect Pitch Deck
According to Y Combinator, at the core, every pitch deck has to be clear and concise. Thus, the founders should focus on the narrative and compelling story making it plain and simple as well as brief so you could get the investors hooked instead of lost.
Everything, and a bit more, can be found in Coinbase’s pitch deck.
Title Slide
This is a perfect example of how the title page should look like. Not only it has neatly incorporated branding and a logo. Rather with only 5 words, it has the name of the company and a one-line description of what it does.
More importantly, it showcases the product, both desktop, and mobile, to illustrate what Coinbase does. It’s a brilliant way to show that the company has a live and usable product.
Bitcoin
On the second slide, Coinbase talks about Bitcoin. It’s a great transition from the first slide as Coinbase presents itself as “Your hosted bitcoin wallet”.
Even today, most people don’t really understand what Bitcoin is, not to mention thousands of other cryptocurrencies, ICOs, NFTs and etc.
Coinbase does that with 3 icons and 9 words.
Then he looked at wisdom and appraised it; he confirmed it and tested it. (Job 28:27)
Bitcoin Growth
Back in 2012, Bitcoin was just 3 years old. It was a completely new technology primarily used and explored by geeks and computer scientists.
Hence, showing a daily transaction volume on the 4th slide is a great way to capture the growing interest and acceptance of a nascent digital asset.
For the perspective, the current Bitcoin trading volume is close to $64 billion for the last 24 hours (what a ride it was!).
Associations
On the fifth slide of the pitch deck, Coinbase has shown some seemingly random words. Yet, they are completely the opposite.
They most probably served two purposes. First, the most common keywords associated with Bitcoin and cryptocurrencies at the time. Second, industries that might be disrupted by Bitcoin and other digital assets.
Again, with only 13 words, the slide captures attention and shows how huge of a market they are after.
Fast forward to 2021, it looks like they not only predicted the future but were building for it all along. And that’s pretty crazy!
Problem & Solution
It is usually advised to have the problem and the solution on separate slides. Yet, when both the problem and the solution are clear, you can just cut to the chase. And no words are needed.
This is exactly what Coinbase did on the 6th slide. It’s self-explanatory, and this is what every company should be striving for.
Your solution should speak for you.
The Solution. Again.
To emphasize the beauty of the proposed solution as well as strengthen the impression, slide 7 is used.
It’s a great transition from the previous slide, with an emphasis on the solution as well as a reminder of what Coinbase is all about.
Analogy
Slide 8 is especially interesting because it’s an analogy. And analogies are a very powerful way to understand, organize and make sense of information. In fact, some might argue that analogies are the foundation of learning from experience
What has been said here is that Coinbase is to Bitcoin what iTunes was to MP3.
We all know how disruptive and revolutionary Apple iTunes was to the music industry and digital entertainment as a whole.
Coinbase wants to be part of another revolution, this time - in the cryptocurrency/digital asset space.
If not until now, this was definitely the slide when VCs started writing checks and it was clear they want to invest in the revolution.
Traction
It’s very important to show off your traction if you have it. And if you do, you got to make sure the numbers are clear and meaningful.
Coinbase does more than that in slides 9 and 10.
20% growth in daily signups is a brilliant illustration of the product/market fit. More importantly, it has been achieved with a small team and in the early days.
Growth in transaction volume is an even more powerful metric. It shows the engagement and revenue potential, given that Coinbase charges a % for every transaction.
Put it all together, and you have FOMO (fear of missing out). And that’s exactly what every startup should strive for when it comes to fundraising.
Lessons
If there’s something to take away from Coinbase’s pitch deck, it’s this.
First and foremost, pitch decks are all about the narrative. Tell a compelling story and make it both clear and concise. Be subtle in using analogies and share numbers if you have them.
Second, I’d like to cite Brian Armstrong (co-founder & CEO of Coinbase). This is what he wrote after originally sharing the pitch deck on Medium back in 2017:
Great things start from humble beginnings. Most of what you see around you started as nothing more than a simple idea and a crude prototype. It’ll take 5 to 10 years to turn it into an “overnight success”, with dozens of setbacks and course corrections along the way. So pick something you’re passionate about and get started.
It took Coinbase 9 years and $840M+ in venture capital to come to where it is today. But everything started with a simple idea and a 12-page pitch deck.
Think about that for a second the next time you will be looking for an excuse why not to start something you’re deeply passionate about.
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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.
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