When you present your company to venture capitalists, you need to show slides with a quick overview of your business known as a “pitch deck.” It is an important fundraising tool, usually running 10 slides or fewer.
It’s not that you shouldn’t try something new, it’s that more often than not the tried and true methods for success are repeatable and familiar for investors. For example, here is a great report on pitch decks that raised $300M+ in capital: DocSend Fundraising Research.pdf
A pitch deck showcases a startup’s business model, value proposition, management team and financials (i.e. future projections), among other key metrics and milestones. It is good to spotlight accomplishments to date, provide timelines, give a peek into a go-to-market plan, and share a point of view about the competitive landscape.
The following are five best practices for approaching the development of a pitch deck:
- Keep it simple – Describe your business in as few words as possible. Use a large font on the slides. Don’t create overly busy slides. Have a clear message for each slide.
- Start with a strong intro to get investors to pay attention – Tell a compelling story or a “what if” scenario. Appeal to the heartstrings of people (investors are people, too). Humanize your business. You can also use analogies to help explain something new.
- Use a problem/solution structure to frame up your story – Be clear about what problem your startup is trying to solve. The size of the problem you are solving affects the way investors will look at you. You must maintain credibility–a problem you can solve.
- Use solid numbers – Tell your powerful story through verifiable numbers, such as growth metrics, user engagement, or online traffic. Focus on the most important numbers; don’t create eye charts full of numbers that mean little to venture capital firms.
- Convey a sense of traction – Give a sense that your company is gaining traction in the market. You can communicate a sense of traction by talking about customer adoption of your product or service, emphasizing how you have achieved key milestones and sharing how the experience of the management team has already opened new doors.
Pitch Deck Slides To Include
- Problem — Give a striking overview of the challenges that you address and solve. Company purpose, logo, tagline — What’s your mission? Condense your pitch to a simple, yet powerful sentence about the purpose of your startup. Consider the words of Simon Sinek (1): “People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe.”
- Validation — How did you reach this conclusion? Present data, primary and secondary market research. This shows you’ve done your homework.
- Market Opportunity— Show that you address an appealing market. You can touch lightly on the Total Addressable Market (TAM) and what percent of that you believe you can obtain.
- Solution — Reveal your product (or a prototype).
- How It Works — Show screenshots of your product in action – embed your demo
- Competition — A common mistake founders make is claiming that their company has no competition. There is always competition, direct or indirect. Even the customer’s refusal to buy (inertia) is considered competition. You need to stress clearly how the competitive landscape is differentiated and what makes you unique.
- Business model / How you make money — How will you earn money and who will pay for it? This section doesn’t need to be comprehensive at this state, but you need to show that you’ve addressed this question.
- Go-To-Market Strategy — The most important thing is to have a clear go-to-market strategy and a plan for how to acquire users. Demonstrate that your strategy is KPI driven, and what steps you’re taking to achieve those results.
- Vision, Financials & Exit Plan —Discuss your overall vision. What is the long-term goal for your startup? In 5 years or 10 years? IPO? Acquisition? Show your financial projections under your current business model.
- Team — Why is your team the best fit for this startup idea? Show that you have the relevant experience and skills for this business. If you have experience in working together, make this explicit.
Your pitch deck should proceed as a narrative rather than a dry business plan you’re submitting for an MBA class. As your startup grows, your narrative will change too. Don’t be afraid to adjust the deck depending on your target audience and what makes sense for your startup.
What should NOT be in your deck? Salary information, and any other information you wouldn’t want seen or known by your competitors or a larger audience.
In the end, investors care about only three things:
- Strength of the opportunity
- Strength of the entrepreneur
- Passion (enthusiasm & excitement)
Your pitch deck should be an aid, not a replacement, for that passion.
Pitch Deck Design Principles
Your pitch deck must communicate your points clearly in a manner that is visually engaging and compelling. Here are some principles that you should keep in mind for your pitch deck:
- Make it legible, simple, and obvious. Your sides should be legible, simple, and obvious. Don’t complicate your visual essay with too many slides – keep it less than twelve – and excessive words. Less = more.
- Use large type, with bold text, and a simple (sans-serif) font that makes good contrast with a clean background. Your audience needs to be able to read your slides in a quick and efficient manner. Remember that legible slides are ones that even old people in the back row with bad eyesight can read and understand. Ideally, use Helvetica, bold font.
- Simplicity is key. Keep your big idea simple so that everyone will understand. In other words, don’t intertwine your idea with other ones that convolute what you are pitching. This means that your slide deck express one single idea. That also means there is no room for several ideas in your pitch deck. Even if you are trying to express several concepts and ideas for your big idea, try to do so in a way that weaves it all into one core idea. Some examples: “we’re the Netflix of online video games” ; “we’re the Netflix of Mexican video content” ; “We’re the Uber of private jet travel”.
- Keep it obvious. Seriously, the more obvious your slides are, the easier it will be to convey your message at first glance. The notion here is that obvious ideas are easier and faster to understand. This is important for you, the entrepreneur, because you typically have a limited amount of time to present your idea and also because people have short attention spans. Investors are no exception to distraction. In fact, investors are more likely to get distracted because they tend to be more impatient and will veer their attention elsewhere the minute your presentation becomes confusing or boring.
As you develop your pitch deck, remember to think about your audience: investors. They want to make an investment in a good idea. If you want that to be you, then you need to make it easy for that investor to say Yes, and not No.