How To Create The Perfect Pitch Deck That Attract Investors
Having a solid pitch deck when raising money is extremely crucial. We’ve heard about a lot of startups that never had a prototype at the time of their pitch, but they did have a pitch deck. A good pitch deck will attract investors and a good pitch deck should be able to convince the investor to invest in your startup. More often than not, you will be meeting with over 100 investors and usually only about 10 will actually wire you some money. As some of the top investors say, “Be prepared for last minute presentations.” You never know when a potential investor might ask you for a quick pitch in their office. In addition to that, most accelerators require that you have a pitch deck by the time that you apply for the incubator programs.
When you’re creating your pitch deck, keep in mind that you have to create it from your potential investor’s shoe. What I mean is that you should put yourself in their position and think about what they want to see. Do they want to see a long 2 page essay about why you’re passionate about the product? Probably not.
When starting off, gather as much information about your market, competitors, goals, technology as you can. This is a perfect time for brainstorming. Afterwards, you want to mark down the most important points from those category. These points will be your “main pitch.” The whole pitch deck shouldn’t be too long. Each slide shouldn’t have more than a few sentence. All of these sentences should be on target hit points that attract investors into believing in your company.
Related Read: How To Get Your MVP Funded By A VC
First Few Slides
As mentioned above, hit points are extremely important for the first few slides. A top VC once said that your entire pitch should be similar to a roller coaster that starts off high. The first minute of your pitch is the most important because it is the difference between a VC falling asleep or riding along in your boat.
Think about one thing that makes your company extremely attractive. If you have a few, pick one that is an instant win. It is also important to take your disadvantage and cover it up with your advantages in the first few slides. For example if you’re a first time founder, then it wouldn’t be smart to put the founders page in the first few slides. You might want to put something else like for example 2500 paying customers and 200,000 active users. These are numbers that Venture Capitalist can relate to.
Think about it, if someone approached you randomly and told you to invest in their startup’s team with just an idea, chances are that you will reject the offer. What if that person approach you telling you that they achieved 1 million dollar in sales and 700,000 in profit with a growing user base. Even if this startup does not have a strong team, you will still be interested because of the numbers.
If you don’t have the correct numbers, maybe you have strong founders with solid backgrounds. Use that as an advantage because investors believe in people and team. The whole point of the first few slide is to catch attention. Your first few slide should also include a brief description of your product. Make it simple and effective. Remember, if your product is so complex that you can’t even explain it, then it will be extremely hard for you to get funding unless it’s that good. Try to put it in easy and attractive words.
For the middle few slides of your pitch deck, you should be talking about your business model and future milestones. Remember, put yourself in the VC’s shoes. They want to see an exit that will gain return on their investment and they want to see a solid business model or at least a potential business model.
Since your first few slides will note your current traction, it is important to think ahead and label milestones for future success. For example, if your startup already closed seed round, you might want to talk about Series A or if you’re seeking Series A, then talk about Series B. The whole point is to make it attracting and show potential future growth. Entrepreneurs always recommend that you think big, for example where will you be in a year? Where do you see your startup in 5 years etc.
Look at your current growth rate and apply that to future growth. An example would be right now the startup is growing at 10,000 user per month. At this rate in 5 years we will be seeing 600,000 paying users per month. This gives the VC a clear image of where their investment will end up in 5 years.
We see a lot of startups without a definite business model. Matter of fact most startups don’t generate a lot of revenue, but notice how each time a startup releases a new press, they are speaking about their potential revenue model. Like Pinterest for example discussed about how they will start implementing paid and featured pins. Pinterest might not launch that model, but it is something that they will certainly include in their pitch deck.
If you are a SaaS based startup, the most frequently used business model is the freemium model. Where you limit the usage to certain free users and include other non-limited paid options. This is one of the most effective business model for a startup because it can gain a mass amount of traction, at the same time you can target big enterprises for your paid model.
For the business model slide of your pitch deck, include a projected growth number. Something like at 2 million users, we are expected to see 5 million in revenue etc.
Related Read: A Rare Look Inside A Failed Startup’s Financial
Add Key Stats About Your Market
We always hear VCs talk about the market size and your market advantage. Include a slide in your pitch deck that shows where your customers are primary coming from and what is your market size for that area. You could include some reliable statistics of your market’s growth rate. Has it been rising over the years? If so, by how much? This should all be written down during your brainstorming process, so you can pick it up quickly when creating your pitch deck.
Include the value you can bring to the market size. For example during Buffer’s pitch deck, a slide was dedicated to a key stat that said, “Buffer finds scheduling tweets can increase your click through rate by 200%” This allows the VC to understand why consumers will want to use your product. If your product is still relatively new or if there are a lot of competitors out there, create a slide in your pitch deck that will talk about why you are better than your competitors. In other words, what are your competitor’s edge.
Related Read: What is The Market Size For Your Startup?
A pitch deck isn’t complete without a team slide. This slide should include all the founders and advisors. If you are a first time founder, it is important to include a powerful advisor on the list. 9 out of 10 investors will ask you for an introduction when you are reaching out to them. Imagine if you had a successful and proven advisor on your team. This makes the whole conversation much easier.
Get some advisors on board for a low amount of equity. The more talented advisors on your board, the better your pitch deck. The whole point is to make the VCs believe in your product, your potential growth, and your talented team. One out of the three might not be enough for you to secure funding, but if you have all three in place, the chance of VCs investing are a lot higher.
Unfortunately most startups do not release their pitch deck until they have either failed or became highly successful. Nevertheless, there are a lot of resources for us out there and it doesn’t hurt to approach a successful entrepreneur and ask them about how they put their pitch deck together. Everpix released their pitch deck after their startup fail. You can find that deck on Github.
A great way to see examples of pitch deck and pitches is to look up demo days from known incubators. A lot of these resources are available on Youtube. Look into Y combinator or Tech star’s demo day and see how they constructed their pitch. When viewing their demo, try to think about some areas that they could have done better on. This will help you construct an overall better pitch deck. Nobody puts together a last minute pitch deck for demo day. All the teams work hard to prepare that pitch deck for demo day, so put yourself in their shoes and think about why their pitch deck is constructed that way.
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