Last week, I wrote About Ergeon, the fence-building startup founded by a licensed contractor and co-founder of Upwork. It employs more than 350 people in more than 40 countries and raised more than $53 million to rock the art of fencing, building driveways and more on its way to “ultimately build entire homes.” In a world where homeowners need—but often can’t afford or prioritize—a general contractor for even the smallest jobs, Ergon swoops in, and it’s easy to see that such a thing. How is there a huge market for
Wondering how Ergon was able to fly under the radar for so long, only to announce that it had raised an impressive amount of money in a hypothetically useless market, I asked the company’s founder, Jenny Hay, if I was too much. A term sheet at the top, with Be Happy, takes a closer look at the pitch deck it used to raise the company’s $40 million Series B. To my pleasure, and for your benefit, he said yes – so let’s dive in and find out what it takes to raise a beefy round in today’s fundraising environment.
We’re looking for more unique pitch decks to tear down, so if you’d like to submit your own, here’s how you can do so.
slide in this deck
Ergeon’s slide deck is from April 2022 and includes a lot of commercially sensitive data — but the company’s CEO was happy to leave all the slides in the deck. he removed some of the most sensitive Company data from some of the slides, but I think we can still learn a lot from this deck, especially when it comes to showing how a growth-stage company differs from an earlier-stage company’s deck.
- cover slide
- Name Explanation (ERG + EON)
- We’re obsessed with transforming work – Team Slide
- Reached $XX Annual Run Rate Revenue — Traction Summary Slide [with some redactions]
- Our Vision – Value Proposition
- Our flywheel is working — Market Dynamics Slide
- The residential construction market is very small – the problem slides
- Scalable for the first time — Solution Slide
- #1 California Outdoor Home Construction Company in 2.5 Years — Success Story Slide [with some redactions]
- Strong Local Brand — Marketing/Development Slide [with some redactions]
- Make XX on the first purchase of CAC – Unit Economics Slide [with some redactions]
- Increase Profit Per Project to XX – Unit Economics Growth Slide [with some redactions]
- $xx Million Annual Run Rate — Traction Slide [with some redactions]
- Launch remotely anywhere — slide to market
- We are on our way to become the largest national outdoor home construction company in 2 years – CAGR & MARKET SLIDE [with some redactions]
- Clear Path to $10 Billion Revenue Top Line in 5 Years – Growth Trajectory Slide [with some redactions]
three things to love
Ergeon is in a slightly weird industry — my first impulse when I heard about its funding round was to ignore it. just, Company homepage At the top it says “Fence Installation Service”. In a world where I write about hovercraft, nuclear fusion, and weird little robots from Amazon, it’s hard to imagine that fence-building rises to a level of interest that’s understandable.
But to ignore Ergeon would be a very stupid mistake. The team is exceptional, they have amazing traction and the company has a way of cornering a fantastically valuable market. From the pitch deck, it’s clear that the company knows what it’s doing — and can paint a picture of a future where it’s unlikely it won’t succeed as wildly. As an investor, this is a page from my favorite hymn book.
Team-ing with strong potential
I’ve said it before – Encore didn’t quite make it work, for example – but if you’re going to open your pitch with the team, the team will be really exceptional. That’s exactly what is happening here. Odysseas Tsatalos created Upwork (which IPO’d) and Intacct (bought by Sage) and then rocked the lawn care and other home maintenance worlds with ezhome. The company did not work out, but Tsatalos hired Jenny Hay as its operations manager – and she was later promoted to CEO of the company. Together, it tells an extremely compelling story.
Slide 7 is a flippin’ masterpiece… Without a single word of sound, it tells an exceptionally good story.
That, in turn, is a hell of a background in its own right: running Ezom, a Ph.D. From Princeton and at McKinsey for many years, as well as being a licensed contractor. This is a highly competent technical co-founder and experienced operator combo for the right direction. The thing this slide doesn’t show is what it’s like when it pitches. I didn’t have the privilege of hearing him do it, but I interviewed him for a Meczyki.Net excerpt a few weeks ago. She is smart, quick on her feet and understands the market from the inside.
As an investor, I would struggle to describe a team that is better suited to take on a company — and even on this relatively simple slide, the founding team lays out the most important parts of the story. Tells. The story draws a parallel between Upwork’s success and how Argon is taking on a larger market, much less served by software startups. It’s skillfully done, and if your team is anywhere near as good as he and Tstalos, take notes.
I also like how the company used its cover slide to foreshadow the “Team” slide (you can see it as the cover image in this story). Pasting a pair of founders on the cover of a Series B deck shows that the company knows what it’s got: Founders as a ditch.
Why this market? Well lemme tell ya
Slides 1-6 include some important foundations: introduction, team, traction summary, value proposition, and a summary of how the market is performing. It lays the foundation for why an investor should lean in and pay attention. I also imagine that a lot of investors would find this pitch the same way I did: “Wait. You Building… Fences? What am I missing here?”
Well, the seventh slide rams that point to the house with enthusiasm and elegance. It would actually be a very clear investor willing to ignore the $1.5 trillion and $700 billion of TAM/SAM respectively. The front line of numbers draws out several other important aspects of this conversation: it’s a very crowded market without a clear leader (700,000+ firms), there is a dire shortage of skilled labor (1 million+ labor shortage), a There are tons of small independent contractors who are overwhelmed and cannot operate efficiently, and the industry as a whole spends more than two-thirds of its time on administration.
This slide is a flippin’ masterpiece of convincing an investor through numbers: without a single word of voice-over, it tells an exceptionally good story, and the numbers house the point the founders are trying to make. Are: That this market is too big, fragmented and for their taking.
easy to understand solution
If you reach Slide 8 of the deck with the founders still in place, you know it’s a huge, fragmented market. So what is the solution? Ergeon has you covered here, with some really clever, unique selling points. The company was founded by two computer science PhDs, and when you have a solid hammer, the problem starts to look like a nail. A mother-in-law-sized nail, in this case, is served by certain rules and algorithms that take much of the guesswork out of quoting, installation, customer service, and planning from a home improvement project and hand-waving. Personally, I found the zig-zagging user experience path to the right a bit confusing, but once I found out it went from left to right And From right to left, it made sense.
The company’s claim that building fences has never been scalable before is a bold one, but it’s not unreasonable — a software tool that includes local ordinances, regulations, permitting procedures, specs, pricing, materials and worker availability at a national level. have ambitions to implement. makes it reliable. This sounds like an almost insurmountable big software development challenge, and as someone who has to allow for smaller projects from time to time, I can only begin to imagine the multi-variable nightmare Ergon has to deal with. Will happen. And – as I’m imagining that nightmare – I can see how this tool, and the datasets that power it, become a vast and mighty moat; Once Ergeon has a good grip on the market, it finds contracting partners it likes to work with, and word-of-mouth flywheels, good luck, catches up with them.
This slide tells me that the company is harnessing the powerful network effect of, er. network effect, The more tasks it accomplishes, the better quoting tool it becomes because it can create more accurate and faster quotes, replacing large amounts of manual labor that carpenters really don’t want to do in the first place. This leaves the workers to do what they do best (build the fence), take two-thirds of the admin tasks they don’t really want to do and turn it into the tasks of a software platform.
As an investor, it becomes clear what the startup is trying to do here.
It would be very, very tempting to talk about traction in the “what good did the company do” section here, but I’m not going. The traction story the company is telling is truly incredible—suggesting it’s next to nothing for the number one ranked outdoor home construction company.
On Slide 9, it claims it’s already twice as big as its biggest local competitor and has caught up with Home Depot in just two years. It also reminds us that Home Depot has a market cap of $300 billion—larger than Airbnb, Uber, and Doordarshan combined. The company is painting an unprecedented picture through its market size and incredible growth trajectory. Unfortunately, the numbers themselves are modified – makes sense. You can see how fast the company is growing, but it’s hard to say exactly how much.
When you look at the full pitch deck, however, even with the revised numbers, you will get another Masterclass – How to tell the story of traction in a way that makes the Ergon feel utterly unbeatable. It is beautifully done and well worth checking out.
In the rest of this teardown, we’ll take a look at three things Ergeon could have done better or differently with its full pitch deck!