The investor pitch deck (or presentation) is frequently referred to as the most significant document an entrepreneur will develop for his or her business. Given the quantity of financing requests venture capital firms receive weekly, analysts only have a few minutes to examine the information, so you have little time to attract their interest and land that all-important meeting.
Striking a balance between including a lot of helpful information and keeping your deck punchy is no simple job, so it’s important to understand what an investor wants to see to call you in for a pitch.
We’ve compiled a rundown on the important sections that should comprise your pitch deck, along with some tactics and blunders to avoid.
And if there’s one bit of advice we can give you, it’s to be concise, clear, and accurate.
Tone and Style
The design of a pitch deck tells an investor a great deal about the type of person running a firm, as it shows their creative and intellectual thought as well as how they may approach the day-to-day operations of the organization. If your presentation is overly reliant on hard statistics, it may be regarded as dry and uninteresting, whereas a pitch that delivers valuable knowledge while demonstrating originality (and possibly humor!) is more likely to receive a positive response. It is always a good idea to learn as much as possible in advance about the investors you will be pitching to so that you can tailor the delivery of your deck properly.
Length
Three minutes and forty-four seconds According to research performed by DocSend, this is the average amount of time an investor spends reviewing a pitch deck. When constructing your paper, keep this in mind, as it should act as a guide for what material to include and how to structure it.
As a general rule, the length of your deck should be between 10 and 15 pages. Below 10 pages would be deemed too short for a firm that is not in its earliest stages, while 20 pages should be the maximum for any company, regardless of its stage. Try to keep each section (e.g., Market, Problem, Solution, etc.) to a maximum of one to two pages.
Which parts should I make sure to include?
Problem
Key to creating a compelling and captivating pitch is ensuring that your Problem slide is accurate. Here, you must precisely identify the challenge or obstacle that your organization intends to overcome and demonstrate the problem’s magnitude in terms of the amount of money and effort it costs users annually. You will appear more focused and attentive if you concentrate on tackling one issue.
This demonstrates to potential investors that you have a comprehensive understanding of the issue and can thus build and supply a more comprehensive solution. If you have well-researched statistics to support the severity of the problem, you should provide them! Finding the problem’s pain spots will also help you connect with the reader on a more personal level by drawing on their experiences. This will be of great assistance in obtaining funds!
Solution; What is the break-through technology?
It is essential that you demonstrate a direct connection between the stated Problem and the Solution your firm offers. This helps to demonstrate to investors that you have an in-depth understanding of the problems you are attempting to solve. You must provide a concise explanation of the product/service you are offering and how it directly answers the user challenges raised previously.
In addition, you must demonstrate why your proposed solution makes sense in this particular situation. If you are focusing on offering a better product then your competitors, or even disrupting a market, try to explain why the service is at least 10x better than the current market’s solutions.
How-It-Works
The How-it-Works portion of your investor pitch deck is an extension of the solution, but rather than focusing on what the product/service is, you should explain in greater detail how it operates and how it is to be used. As mentioned previously, photographs of your product or service in use might add more value to this part than words.
Describe the technology stack used to produce the product and/or deliver the service, the steps users must take to utilize the product/service to its maximum, and your monetization approach in detail (who pays what and when).
Potential of your Product (Market)
Investors are interested in the current size and expected growth of the Market that you are targeting with your product or service.
When making an investment, investors are already anticipating a possible exit. Investors want to know that there is already a significant market for your product or service, but they also need to be persuaded that the market’s growth over the investment period will result in outsized returns.
Are you able to disrupt a market, claim a first movers advantage, or do you recognize other opportunities in the market for your product? Is the timing right for your product?
Claiming a big share in a small market
A typically successful first step of startup’s., is that they are able to service a niche market. Amazon started with just selling books. And Paypall started by processing payments for Ebay merchants. What’s your niche, if any, and how will you transition from this niche market, to a much bigger market (if any).
Product-Market validation & Traction
Traction is a crucial piece of information for prospective investors since it proves that there is a market for your product or service. This section should provide information that validates the company’s business plan, such as month-over-month sales growth or endorsements from respectable target companies/users.
Metrics are the most effective method for demonstrating the traction your product or service has acquired thus far. Highlight elements such as the expansion of your user base and your growing profitability. You may also want to provide additional details such as partners and strategic investors, patents, certificates, awards, and media coverage.
Promotion could be a vital part of the success of your startup. Have you validated yet how to market and promote your product, and if so, has this marketing strategy already proven to be scalable?
Infrastructure and Funding
Your team is obviously an important part of your company presentation. Is there anything else you can share on the infrastructure? Is there a warehouse in place, patent-pending, or other input that proves you are moving into the right direction?
Is your firm already funded, or still bootstrapped?
What techniques can I use to distinguish myself?
Remember that, as an early-stage company, an investor will be very interested in learning about the management and technical staff. In the absence of considerable traction, you must persuade investors that your team is capable and experienced enough to accomplish the objectives you have outlined.
Having a firm understanding of the particulars and the ability to articulate the magnitude of the accessible market will put you in a favorable position with investors, who want to see that you’ve done your research and comprehend the possibility. Even if the market doesn’t offer a billion-dollar opportunity, it’s better to be honest than to hype the numbers.
Finally, demonstrating the solution is always more effective than merely describing it. Prepare for a demonstration as much as possible. Not only does this provide the investor with a better knowledge of your solution, but it also gives the investor the impression that the product/service is complete and not merely an idea.
What common errors should be avoided?
You will be perceived as naive or arrogant if you assert that your solution is so unique that your company has no competition. Inadequately depicting the competition will also demonstrate your lack of readiness. As investors anticipate that you have a deep understanding of the competition, you will be far better served by focusing on how your product or service differs from the competition.
Find a middle ground between images and words. Too much or too little information is a red sign that typically deters investors before they can evaluate your firm adequately. Incorporating an excessive amount of text makes it tough and annoying to filter through your content in search of key details. Similarly, while having a few graphics to improve your deck might be a plus, make sure they are related to your brand and not simply space fillers.
By not being forthright or unable to effectively demonstrate how you intend to spend the investment to expand the business, you immediately erect a wall of mistrust. Investors anticipate complete transparency and candor in all business-related matters. Similarly, painting your firm with a high valuation in the absence of significant traction and being unwilling to bargain will only cause investor conversation to end.
Citizenfin Example Pitch Deck (click to open)
