The pitch deck is a presentation that entrepreneurs put together when seeking a round of funding from investors.
One version will be with a lot of text and information which will be shared with individuals via email. Another version will probably be the pitch deck that entrepreneurs pose to investors in person with much more visuals. Having more visuals will contribute to getting investors concentrated on you.
Essentially, the three keys to strong pitch decks that have funded are:
- Clear and simple
- Easy to act on
Regardless, below are essentially the slides which you want to include in your demonstration:
- Amount being raised
From their study which examined 200 pitch decks, investors spent the maximum amount of time reviewing the slides concerning financials, team, and competition.
The slip covering the issue ought to be a way that you explain what gap you are filling on the market. This should be a painful issue that individuals can relate to and that investors wouldn’t have issues with comprehension.
What’s more, you are simply resolving one problem. Not two or three. You want to come across as somebody that’s focused and persistent to resolve a known issue.
Normally I’d recommend startups to create unique slides to the issue and the solution as you don`t would like to conquer the investor in one slide.
Notice when an investor gets involved with your enterprise is either because one of the following matters:
They have experienced the same problem previously
There’s a clear sense of ROI down the line for them
Given their specialist expertise they know it (e.g. doctors with health care )
When an investor falls inside the three buckets of interest mentioned above at the exact same time, so you have your direct investor. This may result in you securing at least 20 percent of the financing of the whole round which you’re wanting to raise.
The solution has to be concise and quite obvious. Especially if you are a tech startup, your answer has to be scalable. Scalability is the capability of a method to boost its entire output under an increased load when funds are added. That is what investors basically want to see. A business in which they can invest to be able to have the wheel turn considerably faster.
What’s more, it seems sensible on the solution to outline why it is reasonable now. As you may know time is everything in business and being at the right time in history is what actually matters.
The same as Mark Cuban puts it, there are at least 100 people that have come up with that idea before you along with other businesses that may be handling that same problem with a different approach.
The sector will ascertain the possible flow of the investor. If you are operating in a small market and the returns could be affected by this.
Remember that any marketplace that is under $1B might not be attractive to an investor in hyper growth companies.
Ultimate investors, and particularly institutional investors, start looking for businesses that will not only change or disrupt their industry but have the potential to fundamentally reshape the way consumers interact with a market.
My recommendation is to reveal this slide a graph that outlines the market growth in the past and the future potential growth so that investors can measure the upside and potential ROI on their investment. Make sure you are including sources from research papers.
This slip is about showing screenshots of your product in action. To make it even stronger you might want to add some description about the product itself and some quotations of some of your present customers speaking about just how much they love your product.
Here is the slide where you would include hopefully the famous hockey stick that investors want to see every pitch deck they review. Getting to this form of”promise land” for startups is not straightforward.
In the event you are extremely early stage or your expansion isn’t that interesting I would avoid including it. To give you an idea, accelerator programs like Y Combiner anticipate at least 15% month over month growth.
The team is probably one of the most significant slides in almost any pitch deck. The investor wishes to know who’s driving the bus and making them unique to execute on that vision and mission. Note that there are 100 other people that have thought about your same idea. Because of this notion is 10 percent and 90% is from implementation.
In case you have the ideal people seated on the ideal chairs of the bus the corporation will end up discovering its direction to success. Unfortunately when you are investing in a first-time founder you’re also investing in that person’s education and all of the mistakes he or she will make during the first days. This is always a portion of the travel and there is no way to go about it.
The best way to flaunt the group slide is by simply describing the members of this leadership group (ideally cofounders). List in bullet points what are the three or two accomplishments from each member. Ideally those would be regarding the company that is seeking capital.
A diagram is a good idea to demonstrate the investor the opponents that you have executing in your area. How you compare to them and in which you land with your value proposition.
You would like to clearly differentiate yourself from the rest so the individual that’s reviewing the slide gets exactly what makes your business so unique.
Perhaps another slide that you want to include is one which describes how much capital each competitor has already raised previously and at what valuation. This could assist in providing some view of just how much the industry is paying. This may also play on your favor once the time comes to negotiate the terms of the deal or proceeding using a prospective investment.
Normally you wish to take for three or more years of projections. There are some institutional investors that ask for 5 years of projections but in my experience that these investors tend to be the least sophisticated ones.
Though projections are a shot in the dark once you’re dealing with startups, they do provide a fantastic idea of where the company is heading and possible outcomes. It also give a good idea to the investor as to how grounded the direction of this the company is.
This slip is more significant than entrepreneurs normally think. When you connect with an institutional investor they will request your pitch deck. 3 weeks later they will ask you on your next meeting where items are at and then they will make a decision. With this in mind, it is almost always a good idea to be more on the conservative side and also to over deliver. Worst thing that can happen is for you to completely miss the mark and beneath promise.
For this reason you do not need to go into much detail about the deck. All you need is to offer a summary.
9. Amount being raised
On the ask slide you would like to be strategic. Don’t put a specific quantity which you’re raising. Businesses have limitations in their investment which means that if you place $5 million into your pitch deck and that company has a mandate to not invest over $3 million, then you’ll probably need them pass. By adding ranging from $3 million to $5 million around the raise amount you are also including such companies. For this reason you want to be appealing to as many targets as possible, so go with ranges instead of specific quantities.
Most founders forget to include in their pitch deck their contact info. In case you have a sizable following on societal websites you should include the hyperlinks within the cover slide. I find this could provide social evidence. Interested investors will probably look you up and will even reach out to individuals in common in order to ask for references.
If you are seriously interested in your pitch deck it’s not a bad idea to ask somebody with a high-level understanding of earnings psychology to have a look at your deck. A couple of tweaks to pictures, positioning, and phrases could earn a multi-million dollar difference.