What ideas have gone nowhere through history?
It would be amazing to wonder how many brilliant ideas throughout the ages have been and gone, and left ignored.
It’s likely that there are a lot of them out there right now, gathering dust on someone’s desk, or in some old filing cabinet somewhere, waiting for an ambitious entrepreneur to find them with enough determination and creativity to turn them into something valuable for humanity?
That’s why I set about writing this article – not only to inspire you but to give you practical advice as well. Let us get started because what goes around comes around: Ideas deserve their own shot at greatness!
But… how to make your idea come to life?
It’s no surprise that having a well-designed pitch deck is key to getting investors excited about your business. A great one will not only engage them in conversation but also make it seem like an exciting idea and then it should lead potential partners into investing in your project.
A pitch deck is a brief presentation (and an essential fundraising tool) that provides investors with an overview of your business.
It usually focuses on showcasing the product/ project, explaining what monetisation strategy will be used, high-level financial projections, funding needs, and introducing the members of the team.
Collating this type of information and presenting it effectively can sometimes be difficult for first-time entrepreneurs because they’ve never done it before. And despite its brevity (ideally 10 slides or less), creating a winning investment pitching deck can be challenging!
Your pitch deck should be well-designed and, most importantly, a succinct visual document that tells the story of your business.
Your pitch deck is meant to introduce your passion for a project and get people enthusiastic about what you are doing.
The goal isn’t to secure immediate investment, but rather to introduce yourself. The investor should be intrigued by what he or she has learned so far, wanting to find out more about where the business can go from here.
To engage in conversation about business and get you a follow-up meeting!
Pitch decks are much more difficult to write than traditional business plans, but they offer a unique opportunity for entrepreneurs to make their company stand out in the sea of other startups.
A common error that entrepreneurs make is packing the slides with as many details as possible – an error that won’t help you at all in investor meetings.
In this guide, you’ll learn how to avoid making these mistakes and how to grab an investor’s attention.
Page 1 – Cover
Startups should be careful when dating their deck because potential investors will know if you’re taking a while to raise funds.
On this slide rather than at the back, you should place the name of accelerators you attended, awards, nominations, and strategic partners so the audience can clearly see what makes you stand out without having to wade through pages upon pages of information.
Focus on what makes YOU different.
Page 2 – Elevator Statement
Simple and clear, this is a short phrase of who you are, what you do and for whom. Avoid technical terms and don’t leave your audience wondering in which space you operate, or you’ll make it very difficult for them to follow the rest of your presentation.
Page 3 – Your “why”
What’s your project mission? What’s the problem your startup is willing to fix?
You can use visual content such as photos, videos and graphs to help your investors understand (and feel) that the problem is real – by doing this slide well, your audience will understand your business and its goals.
Page 4 – Why you?
How are you fixing the problem? This is the moment for you to tell stories about how your customers use your product and how your company makes their lives better.
To give your plan more credibility you can include your product itself, a prototype, a mockup or the link to your product demo (if you have one) but do note it’s rather uncommon to play demos during investor meetings. And avoid the temptation to go into too many technical details.
Make your Pitch Deck simple and compelling – and get investors excited, not bored.
Page 5 – Is the market ready for you?
An important component of pitching to investors is determining the size of your target market. Top-down approaches like “we need just 1% of a huge market to succeed” don’t work – investors never take those claims seriously and they might doubt your whole pitch.
By calculating their total addressable market (TAM), business owners can ensure they have enough room to succeed and satisfy potential investors.
Page 6 – Business model
This is one of the most important slides so keep it as simple as possible. If there are 10 potential revenue sources, don’t list them all.
Focus on 1-3 main sources of revenue and give a brief description for each that will help sell your product or service to prospective customers.
You can also discuss how your prices fit into the larger market – Are you a premium high price offering? Budget option? Or something in between like middle tier pricing with limited features?
Page 7 – Hey, can you see me?
In the wake of evolving marketing trends, you can’t ignore your go-to-market strategy. The strategies can include things like marketing campaigns for specific customer groups including demographic information (such as age range, income level or household size).
Or, if you’re planning to acquire customers differentiating from competitors, it’s important to highlight that difference here with an explanation, as well as data, on how successful this process has been so far.
Page 8 – Know your opponent
As Sun Tzu said “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle”.
The message from this is simple – don’t try to convince potential investors that you have no competition.
The best way to increase trust in your company is, to be honest about your competition. This shows potential investors what your startup has done so far and also provides an idea of how tough a battle may lay ahead.
Mention 3-4 specific companies and talk about the plan you developed for dealing with each competitive threat.
Page 9 – Stand out from the crowd
Make sure you keep in mind that investors are looking for companies that have a competitive edge. You need to convince them that your business has an advantage over other companies in order to convince them to invest in your project so it can grow and succeed.
It’s on you to prove why they should invest by coming up with 3 – 5 good advantages.
You might include: more unique or superior product features than competitors, better technology than competitors, cheaper prices (better value for money), a different approach from others on how the business will function like strategy/positioning, etc.
Page 10 – Financial Forecast
Make a spreadsheet that predicts your financial performance based on the number of customers or users you have.
You could include estimates for 1, 100, 1000, and so forth in terms of customers and users if it’s appropriate for your business.
If you’re a startup, don’t go into too much detail about your financials. Instead, focus on the period when your company is expected to start generating revenue and the break-even point. Bear in mind that from an investor’s perspective, a good investment starts with realistic assumptions!
Page 11 – Dream Team
Have you ever wondered how investors decide which company to invest in? It turns out that investors invest primarily in people. So, your team’s experience plays a big role in convincing them.
Your company will gain the trust of investors if you have a team with industry-specific experience. Include any experience you or your colleagues have in business development or startups, along with any roles still unfilled but vital to the success of the company.
Page 12 – The right value
You must know how much money you’ll need and what it will be allocated to in order to achieve key milestones. Also, think about future funding needs – and how you’ll raise money later. You’ll be asked those questions so make sure you’re ready with an answer!
Page 13 – Propulsion
Investors are more likely to invest in you if they think your company is the next big thing – and of course, you are!
So, mention any notable clients, early adopters, letters of intent and sales pipeline for indications that their investment will grow exponentially.
Any proof (big or small) that your solution works are extremely powerful and reduce the risk for potential investors.
If these stats aren’t impressive enough, just talk about what milestones have been achieved so far; or If you lack traction, you can pitch by analogy (using data of other companies with similar business models) to show your potential.
Page 14 – Real possibilities x Risks
You should never wait until investors ask about your risks before you speak to them proactively. If they want a plan, then give them your plan.
Speak with confidence and show that you’ve developed mitigation plans for all of the major issues in your industry.
Inside those risk areas be sure to address any common objections as well – such as “This market is not profitable” or “Sales cycles are long in this sector”.
Don’t be afraid to get creative and try new ways of thinking when you’re coming up with solutions for any potential concerns – addressing risks will increase their trust in your management team.
Page 15 – Leaving a lasting impression
Close the pitch with a few words that summarise your vision. It should be on the screen as you answer questions from investors. They’ll be able to see where your company is headed and why they shouldn’t miss out on the opportunity of moving forward with you.
Your ultimate goal should be more than just about landing funding – but building relationships too.
You want to meet with people who can provide more than capital: connections, expertise or even mentorship opportunities are valuable and often investors can become long-term partners on every level instead of simply “partners”.
Need some creative insights into creating your first Pitch Deck?
Next week I’ll share with you some legendary examples of startup Pitch Decks! Don’t miss it!