April 3, 2016 by gamalm
What is a Pitch Deck?
- Meeting where the investor gets an actual overview of what you’re all about
- Summary of your business plan
- Requires the same amount of planning, time, and research
- Each slide should have an index slide where you have all the relevant information pertaining to that slide
- Expect to be asked where you got a number and to be able to explain it
When Will You Need to Pitch?
- The first thing that comes to mind when we think of creating a pitch is that we are approaching an investor
- In reality, this pitch deck presentation won’t only be used for investors!
- Business Partners: (e.g. suppliers…)
- Co-Founders: enlarging the team?
- Customers: this pitch deck which is assembled in the idea creation phase, if structured correctly, can then be transformed into for example, the video that you use as an MVP to introduce your business idea to your consumers.
What Will Investors Look for in your Pitch?
- Show the people behind the idea and briefly describe their role
- An idea is as good as the people supporting it
- Present it as a problem and solution so that the viewer grasps the main value proposition you are providing for the customer
- How much demand is there for your business, and what potential does it have to grow?
- Be careful! The more specific, the more realistic!
- Long term plans? How will you keep it sustainable?
What is the Goal of your Pitch?
- This may sound counterintuitive, but the goal of your pitch deck is not to raise money. What? I know that doesn’t sound right, but the real goal of your pitch deck is to get to the next meeting & spark interest in your company
Where to begin?
- To begin your pitch deck, think of ONE sentence that describes what you do
- Imagine it as a tweet: describe your business in 140 characters in a way your parents would understand. (Signifies your growth potential)
- Comparison to another well-known company
- “We’re the Uber for Pets”
- “We’re the Netflix for Video Games”
How to Formulate A Successful Pitch Deck
- What are you trying to solve?
- Is it really a problem?
- Explain to your investors the pain that your are alleviating.
- Your goal is to get everyone nodding and buying in!
Tip: make the problem as real as possible, talk about it in a form of a story
Solution: Value Proposition:
- Describe the solution you are offering.
- Describe how you alleviate this problem and the meaning that you make.
- How does your product/service solve the problem?
- Talk about BENEFITS not FEATURES.
Ensure that the audience clearly understands what you sell and your value proposition.
- Who are you and why are you here?
- Show the people behind your idea and describe the role of each person based on his/her background.
- Investors will want to see that you have a diverse team.
Tip: focus on a significant accomplishment for each member of the team.
- Who has the problem? Define your target market.
- What is the total market size?
Use bottom up analysis to estimate the size of your target market. Investors will want to see that you have a specific and reachable market. The more specific you are, the more reasonable your pitch will be.
Show that you have a plan and are able to capture those customers.
- What are the alternative solutions to the problem you are trying to solve?
- Show who are your direct and indirect competitors and how big they are (to what extent are they a threat?).
- Provide a complete view of the competitive landscape. Too much is better than too little.
It’s very important that are you are aware of your competitors’ strengths.
- Your unique selling point (value proposition), as well as other competitive edges you may have over your competitors (e.g. ease of use through the application)
- Make sure that the main core value that you are providing your consumer isn’t just an additional value that your established competitors can adopt
- Do NOT belittle competition! It’s important to show that you know their strengths and weaknesses compared to yours.
- “If a picture is worth 1000 words, a prototype is worth 10,000 slides.”
- Most of you guys aren’t selling products, you’re selling services. The service process is extremely important for the customer. You need to highlight the steps the customer goes through here
- Be careful, if you are a platform, you need to highlight this for both consumer segments.
- Use pictures or videos to illustrate your processes
- KNOW what your assumptions are, remember that they are assumptions, and back them up with logical reasoning
- If you already have early adopters using your product, show this using numbers, testimonials, etc. (proves that your solution works, is demanded, and shows the investor that he is decreasing risk)
- USE NUMBERS to show the marker
- When forecasting how big your market is, do not overestimate or underestimate
- Take into account the actual market size, the market awareness you will be reaching after your first year of marketing, as well as how much market share you could actually achieve from this marketing awareness.
- How much money do you need for funding?
- Xactly what will you use this money for?
- When will you start operations? What is the time frame of your funding phase?
- Revenue Structure: how you will make money
- Show a schedule of when you are planning to make how much money?
- How much and how frequently will you charge?
- Compare to competition?
- Cost Structure:
- The information presented on this slide should only be the important information
- In reality, you should have an excel sheet of all your cost and revenue information, forecasted depending on how much volume you are planning to sell.
- When are you expecting to breakeven?
- END WITH AN ASK:
- Don’t be shy to ask for how much money you want
- If you already have social media platforms, add them here!
Dos and Don’ts
- Tell a story
- Telling a good story is a vital skill for every entrepreneur.
- If you tell a compelling story and you connect emotionally and capture the attention of your viewer, they will automatically want to learn more! Solely from the built up tension or suspense of the way your story is structured.
- Try to use cases which can help the investor visualize how your customer benefits from your solution
- Make a strong first impression
- As we mentioned earlier, the team is one of the most important aspects that should be highlighted when pitching yourselves. (again, not only to investors, but to other business partners for example.
- Studies show that it only takes the first 2-3 minutes maximum with a person to formulate your complete first impression about someone. And for the investor, these 2-3 minutes can make or break your pitch deck.
- Show the people behind the idea
- So this is a way for you to be able to show off the team. A good team is always a diversified team. You have to show the investor that you have a set of different complementary skills that can work together to achieve your goals.
- Therefore, you should find ways to focus on a significant, relevant accomplishment for each person in a team that identifies that person as a winner.
- When the team looks like a winner, the pitch deck wins. Not when you look like a winner.
- Have one consistent look
- This is a little commonsensical, but sometimes, we need to be reminded of this.
- When giving a presentation, there are a lot of things the presenter can do to shift your attention away from the content being described. Whether this is them playing with their hair or doing whatever.
- Having an in consistent look is also a way to confuse the viewer in front of you as the information presented will not be easy to grasp.
- End with an ask
- Many entrepreneurs fundraising love to drone on about their company and pitch all the features, traction, strategy. But when it comes time to define the investment opportunity and ask for an investor to write a check, suddenly they’re shy and can’t find words.
- Be prepared to ask each investor you communicate with to come in to your round directly, and even ask them for how much money you want from them, and why.
- Also, be prepared to succinctly describe the use of funds for the money you are raising, and where it will get you.
- Use numbers
- Investors do work with visions and with ideas. But most of all, investors work with numbers.
- When you use numbers, you help the investor visualize what potential kind of investment he is going to be making with you.
- It gives them a feel of the market, and shows you did your homework, and you know what you’re talking about.
- Know your metrics more than anyone
- Adding onto the other slide, actually, You SHOULD do your homework and know your numbers. Take into account that the pitch deck consists of your presentation, as well as a question and answer period. It is here where you must ensure that you are ready to answer any of the questions they may throw your way
- Continually update your pitch deck
- Entrepreneurs who do well at fundraising treat their pitch deck like the most valuable piece of content or advertisement that they will ever write.
- Example: a Founder who recently closed $500,000 on Crowdfunder literally went through 7 iterations of his deck in a few months. Each time his traction grew, he would update those numbers in the deck. Each time he had a big win or development, he would update the deck.
- If you’re using your deck correctly, you’ll find that it reflects the rapid learnings and growth you’re experiencing as you pitch investors, get feedback, and refine your story and approach.
- Good luck in pitching investors and your fundraising efforts.
- Practice with your team
- Different roles might pitch in different ways
- Specialized topics for Q&A
- If you don’t have the answers find it or reach clever statements to see how you will answer
- Make sure the pitch is always consistent! This only comes with practice!
- Make sure you spend time both pitching investors in person to learn and get feedback to improve your pitch, and take advantage of the new opportunity to get your pitch in front of thousands of investors online via equity crowdfunding.
- List benefits, not features
- Investors want to know what value you create for your customers
- Even customers only care about what’s in it for them – and you have to learn how to communicate that
- Place more than one idea in one slide
- Read word by word
- Come unprepared
- Make it too long
- Use too many bullet points
- Use small fonts