Some people think that you need a pitch deck to only snag investors. In my opinion, that’s false.
From the initial stages of finding a cofounder to your series funding rounds, it is your most effective way of convincing someone that your startup has value. A great pitch deck could help lead you to a partnership, an advisor, or an investor (and their money, of course).
In my experience, developing your pitch deck is an essential part of building a startup. I’ve already mentioned their importance, particularly in my article ‘Raising Capital: My Method of Breaking a Pesky Catch-22.’ I think it’s time I went into more detail about them.
In this post, I’m going to give you a general overview of pitch decks: what they are, general rules of thumb, and the essential slides you need to include.
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|DEFINITION||A pitch deck is a presentation intended to convince potential investors and co-founders that your startup has value. It’s a means of demonstrating how you’ve done the utmost to reduce risk.|
Before you even have a business, a pitch deck serves as a conversation starter/idea bank. You should be iterating on it over time, as your startup continues to grow. Not only will this save you time when you’re preparing to pitch but it also helps to keep the purpose of the startup clear.
Your startup will probably go through many changes, and it’ll be hard to keep track of all the evolutions if you don’t document them somewhere. You might create a slide that doesn’t necessarily fit your pitch deck but might answer a question one of your investors has.
Don’t delete any slides. Keep everything neatly organized in an appendix, so you can pull it up while you’re in the Q&A portion of the meeting. I’ve noticed this goes over well with investors because it speaks to how well-prepared you are.
Before you start guns blazing, here’s some general advice that you should consider applying to every pitch deck you create going forward.
From the pitch deck’s design to its focus, you want to keep everything as simple as possible. You’re not there to show off your graphic design skills. You’re there to convince people to invest their hard-earned money on your startup.
Nobody, including investors, is able to remember the 400 problems your startup addresses. Try to keep each slide to one idea, so your audience can clearly follow and remember your most salient points.
Keep it simple, stupid (no offense).
Any less than 10 slides and your pitch deck probably doesn’t cover the necessary information. Any more than 20 slides and your pitch deck will probably test the patience of investors.
Again, think of K.I.S.S. The goal is to dynamically communicate enough information to capture the attention of potential investors. You’ll have a chance to bring up more points when the investors use the rest of the meeting to ask you questions about your business.
A pitch deck isn’t meant to be an essay or report. If anything, it’s much more akin to an executive summary.
For the most part, your pitch deck bolsters your oral presentation. When you copy and paste everything you’re going to say on your slides, the investors are going to just read what’s on the screen. You lose their focus. In fact, you and your management team are supposed to be a major selling point of the startup.
Keep the text short, bold, and large (30pt and above) and use visuals (images, charts, graphs) when applicable. The well-chosen visual can have a visceral effect, generating an emotional response and connection from your audience.
The following list includes the must-have slides in your pitch deck. For the most part, the order isn’t set in stone, so feel free to switch the slides around. You’re obviously not going to want to put your ‘title’ slide at the end, but experiment and see what’s most effective for your startup.
FYI, I used Canva to create the sample slides. You can use any presentation software that you’re comfortable with. Just remember that the pitch deck is there to boost you and your team. Don’t make it distracting or showy.
As the saying goes, first impressions are lasting impressions.
While this one seems like a no brainer, the title slide isn’t one that’s always easy to get right. You should obviously include introductory information: your startup’s name and tagline/value proposition. You can put your contact information here, or create a separate ‘contact us’ slide at the end.
Distilling exactly what your startup does in a clear yet persuasive sentence or two takes iteration. You don’t want your presentation to fall flat right from the start, so consider how you can say just enough to capture the investor’s attention.
Although both ended up as part of successful pitch decks, here are two examples (one mediocre, one good) you can reference:
Uber: “Next-generation car service.”
“Next-generation” can, perhaps, read a bit salesy, and is thrown around often enough in the tech world. ‘Cutting edge,’ ‘innovative,’ and so on, we’ve all heard those words too frequently for them to mean much. So I’d avoid describing your product with ‘trigger’ terms (often vague and grand) that may get investors even more skeptical than they already are.
I do think, though, Uber had a strong case to use the term, and they definitely backed it up with the rest of their pitch deck. Just make sure you can actually deliver on your claims.
AirBnB’s: “Book rooms with locals, rather than hotels.”
It’s blunt and addresses one of the selling points of the business. That being said, AirBnB manages to communicate a great deal with one sentence. “Rooms with locals” makes me think travelers will gain a personal connection within a potentially unfamiliar city. I know many people feel detached from a city when staying at a corporate, uniform hotel chain. A room with a local is not just one hotel room of hundreds in some massive skyscraper.
Your startup could be addressing a problem or providing pleasure. Either way, you are capitalizing on opportunities. If you haven’t found that opportunity, you definitely don’t have a business.
You don’t need to list all of the problems your startup fixes. Think about narrowing down the pain points to three or fewer. You could even go with the major problem/pleasure to keep your pitch deck as focused as possible.
So what are the solutions? It’s rare that you’ve got the one and only fix. Unless you are certain that your solution is truly unique, avoid claiming anything of the sort.
Now’s a good time to show that you’ve done your market research. What are your competitors trying? Are they failing or delivering sub-optimal results?
Introduce your solution and provide a cogent case for why it’s the best one out there. It’s not necessarily something wholesale that will differentiate one solution from the next. Many small tweaks could make all the difference.
Money, money, money, money…MONEY!
In this slide, you establish the market you’ll be competing in. This is an opportunity for you to utilize graphs/charts to display the information in a quick and visually appealing way. You should include information such as the total market size, your addressable market opportunity, and the projected market growth.
If it’s less than $1 billion, investors may not want to take the risk because the return on investment (ROI) is not there. Nevertheless, if you’re operating in an emerging market, a graph of its projected growth would be effective in convincing that there’s a chance for huge returns two, three, four years down the line.
|NOTE||Most investors want to see how their investment will multiply tenfold over 5-7 years. Don’t overestimate the market growth, though. It’s better to exceed expectations than underdeliver.|
Show off your product/service!
Whether you’re a B2B SaaS startup or a luxury footwear manufacturer, you want to highlight what features have actually resonated with users. Quotes, in particular, hit home the positive response you’re receiving from your target customers, and/or investors, and/or experts. This, of course, requires your having tested your product/service out in the real world.
If you don’t have the budget to acquire marketing data, focus on the major features you think your users will love. For example, say you construct your boots out of some exotic snakeskin. You could concisely chronicle the journey of how you acquire the material while a physical sample gets passed around. I’m just riffing here, but you’re essentially highlighting the major selling points of your product/services with proof.
The traction slide shows the growth of your business, from users to revenue. Again, this is a great time to introduce charts/graphs to achieve that visceral effect. Plus, investors are much more interested in seeing trends, rather than a point or two. The spikes are great, but they want to see if your startup’s been steadily (or even exponentially) trending positively.
As I’ve stated multiple times before, a pitch deck should alleviate the audience’s feeling of risk. Your traction slide is one of the crucial moments where you can allay some of their fears and build trust. This is cold hard proof that what you’ve been doing has been successful so far.
Ok, so here’s the hard truth. You’ve probably already heard this before. I think I even mentioned this earlier in this post. It’s more than likely that you’re not the one creating the market. In other words, you have competitors vying for the same customers as you are. If you can’t acknowledge this, no investor will take you seriously.
Use the competition slide to establish how your competition is and how you’ve differentiated yourself from them. This is your opportunity to position yourself favorably within the market. On what terms are you really competing? Who is your true competition? Just because you’ve got a tech startup that doesn’t mean you are Microsoft or Apple’s competitor.
Do you have proof that there’s a demand for an alternative solution, namely your solution? I’m mentioning this again, but it’s important: you have to reduce the investor/cofounder’s sense of risk.
Your startup is run by you and your management team—people! With all of you, there’s no startup. That’s why, when you’re up there delivering your presentation, you are pitching yourselves as much your product/service.
To zoom out briefly, a pitch deck serves as exhibit a, b, c, etc. of your capacity to not only come up with a great idea but also successfully execute it. You need to persuade the investors that your team’s going to be part of the 10% of startups that succeed.
So, sell your team a bit. Who are the major players in your startup? What are their most impressive achievements (professionally, of course)? Choose two or three of them and create a short bulleted list for each person.
If only we all had a crystal ball…
The ‘financial’ slide requires extrapolation. How do you think your business is going to grow in the next three to five years? These numbers should be coming from a fully-fledged Pro forma (full financials). You should not include the document itself in your pitch deck, but bring it along to meetings as a way to have the data to address any hypothetical situations/assumptions an investor might bring up.
Investors obviously want to see massive returns, given that your projections are realistic. For me at least, it’s always a huge red flag when startups wildly overestimate their growth potential.
Again, just think about this from an investor’s perspective. If I don’t feel like you’re being accurate and honest, I’m going to be far less inclined to invest in you and your startup.
Investment is what you’re here for, no? Throwing out some vague ‘ask’ will ruin an otherwise stellar pitch deck.
Begin with how much you want. I would go with a range instead of giving an exact figure because you could price yourself out of a deal. Explain concretely why you need the money and how you plan to use it. Even better, what opportunities for growth and revenue will the investment open up for your startup?
If you were to leave this article with one major takeaway, I hope it’s that pitch decks are all about reducing risk for the potential investor or cofounder. You achieve that by doing your research and preparing well. On a final note, make sure you prepare a loose script and practice your presentation. It’s cliché, but you want to present your best self.
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I’d love to hear from you
What are your thoughts on my pitch deck essentials? Any essentials you’d like to add to the list?
While you’re here, I would like to mention that I’m currently searching for entrepreneurs with great business ideas and practical plans.
I’ve been fortunate to have worked as a startup CTO and technical co-founder for over a decade, and I’d like to offer my expertise to you and your startup. First-timers, I know, have a particularly hard time navigating an already difficult space. Please reach out if you’re having trouble building your business.