To have an awe-inspiring pitch deck for fundraising of a start-up, one must meticulously design it to impress the venture capitalist. The pitch deck should excite the venture capitalist and incite his/her interest in the idea. This would help engage conversation and lead towards possible investment.
Entrepreneurs are tempted to mention all the bits and pieces of information regarding the business. It is advisable not to do so. A pitch deck has an average length of around 19 slides, so it has to be economical with the text and leave space for visuals. Most investors sift through the deck. In that case, the visuals will grab their attention.
Every venture capitalist looks for the following sequence of slides in a pitch deck:
The pitch deck should commence with a brief introduction to the business, its vision, and its value proposition. Companies often propose their value in comparison to a famous company that has a similar business model. For instance, an online start-up of education-related consultancy can pitch itself as “The McKenzie of education.”
A successful business idea results from a Eureka moment when an aspiring entrepreneur finds a solution to a problem or a random thought that may have struck a chord. Therefore, the second slide must present a problem- with a promise to offer its solution at the same time- to portray that the idea revolves around a purpose. However, the problem must not look unrealistic. To make it look viable, one can narrate a story with a similar issue through the pitch deck.
The next slide can be used to define the market dynamics and who the company’s ideal customer is. The market dynamics should include its overall size, employment, revenue, or share of the GDP and the firm’s current and anticipated market position. It is advisable to adopt a data-driven approach for the analysis of the market and its segments. The investor will fully be apprised about the scope and scale of the problem one is solving. But the presenter must not fall into the temptation of exaggerating the market size in an attempt to make it look more appealing.
After building a picture of the problem in the minds of the investors, one must carefully dive straight into the solution he/she offers. People are often tempted to move this slide up closer to the introduction of the pitch deck. Such temptations should be resisted. A pitch deck should be an imitation of classic storytelling in which you build up a problem, highlight its repercussions on the people, and then present a solution. This slide should fully describe how your product serves the customers and addresses their needs or wants.
The description should be complete, but one should avoid writing each aspect of the product/service on the slide because it may look messy. Moreover, the focus of the slide should be customer-centric rather than revolving around the product or service offered. It will be a plus if you can use visual aid for this.
After presenting the solution in the form of either a product or service, a pitch deck should assert that the proposition yields extraordinary returns. This slide should focus primarily on a suitable pricing strategy. It should show how this pricing fits into the broader market and the competitive landscape. It should indicate whether and the degree to which the product or service is price elastic or inelastic.
Roadmaps give a sense of direction and help avoid uncertainty about product or service performance. The entrepreneurs are encouraged to show any revenues they have already been able to make. It will come to the knowledge of the investor that the revenue model is pragmatic (and not been made up out of thin air). The slide should also outline the milestones an entrepreneur has achieved so far, and the ones he/she intends to accomplish in a specific time frame.
Is it possible to sell a product or a service without grabbing the attention of the masses? The answer is, “No.” This slide is purposed to highlight the marketing strategy that the entrepreneur has used for reaching out to and maximizing the number of potential customers. A marketing strategy that stands out is the one that is meaningful, unique, and salient.
Sometimes, the companies can reach out to the customers, but it does not translate into sales. So, a coherent sales strategy must be in place to aid the marketing campaign run by the company. Venture capitalists often closely look into whether the two approaches are synchronized with each other or not. The slide should also address how both the strategies are non-conventional and different from the competitors.
This slide focuses on stressing the fact that one has the right bunch of individuals who complement each other to accomplish a given goal. It is advisable to emphasize that individual potential can be truly optimized through teamwork. There should be trust, friendship, and mutual respect among all the members, regardless of designation, rank, or superiority. It is because complex tasks usually demand interdependence among members to excel.
Investors are keen to have a snapshot of your financials, including the profit and loss statement, cash flow statement, and sales forecast. It is advisable to avoid in-depth spreadsheets in the slide because they will not be easy to read, understand, and comprehend. Instead, one can use analytics (e.g., charts) to accentuate all the relevant details briefly. The investors might ask about the underlying assumptions of reaching a sales target or about the critical expense drivers. The assumptions and goals should seem realistic in the given time.
This slide describes how the company fits in the competitive landscape. The investors would look to invest in only those businesses with a ‘secret sauce’ compared to its competitors. So, a successful pitch deck should appeal to the investors that he/she would be better off investing in this company, instead of investing in its competitor.
One has presented a plethora of logic, reasoning, and evidence. It is time actually to ask for money. Entrepreneurs should explain the amount of money, its need, and how he/she intends to spend it.
In a nutshell, pitching is synonymous with storytelling. An entrepreneur should use a visual aid to build up a problem, illustrate how your product or service resolves it profitably with marketing and sales strategies that complement each other. The solution offered to address the problem must be customer-centric. Lastly, the pitch deck should also portray the viability of scaling up the business level for the mutual benefit of both him/her and the investor.
Oak Business Consultant is specialized in these matters. We help startups for building a strong financial model and business plan along with Pitch Deck. It has helped a number of them to get investment. Visit our website to consult with us for free before approaching investors.