Eight  vital points to include on your pitch deck to woo investors – Bernando Arnuad, EU-startups
Probably the most important document you will produce in your company lifetime is the ‘pitch deck’. It is your presentation of what your company is about and what it is committed to do. It is a powerful and summarized way to show your story and your vision to different audiences.
In this article I try to summarize 8 points that are mandatory to be on your deck. As your pitch deck will serve as a compass for you, your team of co-founders and your early investors to orientate the direction of your startup strategy, development and growth, it must contain central aspects of your company’s reason for existence.
The bottom line is: you need to answer the questions that investors, clients and press will want to know from you and your team. There are more points to a good pitch deck than 8. However, these are the main ones, and if one wishes he/she can divide each point into 1 or 2 further points.
- Problem and opportunity
What is the problem, where is the light and how can this be positive?
This is the main reason for you to have come a long way. With an identified problem and where you see it can be tackled from, your pitch deck can begin addressing this situation and take the audience into a journey of frustration and disappointment to an inflexion point where there is a ‘Eureka’ moment. Secondarily, outline the now clear opportunity and market for the problem you are addressing with your business and product, while describing how other companies are missing your point or how they propose incomplete or inadequate solutions.
2. Solution and product
How will you solve it and what is the product you will build – and why?
Having connected the audience with the pain and needs of your public, the next slides should be about your solution, how you built it, why and the profile of your potential customers. As you previously showed some metrics of markets that were not met yet, it is now time to show how you will build your user base and how you designed your product for bringing in recurring revenues either through the product itself or through associated or side services.
How will you gain the ‘hearts and minds’ of the public whose needs are unmet? How is your product better than the others? What are its main advantages and its secondary advantages? What are the main three differentiation points? What is your position and plan to increase market share over the next 12, 24, 36 months? You need to answer these questions, so that everybody has the answers clear.
Pictures, screenshots, demonstrations and interactive text are the way to go here.
3. Competitions and total addressable market (T.A.M.)
Who is likely to fight you and what is the size of the pie?
This is the moment where the audience needs to know “who are the players in your field?” and why you can beat them, outsmart them, shield your business from them and compete against their solutions. Knowing the enemies and the ones you may cooperate with is a desirable advantage, as Sun Tzu suggested in ‘The Art of War’. On the other hand, knowing your flaws and weaknesses will definitely make you either improve or be able to shield them from attacks. Time series graphs and visual data about market share and features comparison are welcome in these slides.
There are two Total Addressable Markets that you must mention: the total market and your niche or segment. Investors and potential partners do not want to know how big the whole market is and stop there. It is a good measure, but they would be better off with the addressable size of your niche. For example, if you are selling biological fertilizer that is specially formulated for tulips, start by showing how big the flower market is in your country, then region, then city. After that, you can show in a progressive way what is the size of the tulip market in your city, region and country?
4. Team and track record
Who will help you with your vision and what have they done so far?
Ask 100 investors what is the most important factor they analyze in a new venture, and the vast majority will answer you: “I need to see what the founding team has achieved so far, launched so far, and how committed this team is in turning their vision into a reality“. Translation: abilities, track record and commitment.
In the Venture Capital industry particularly, it is not rare to hear “I invested in the team’s capacity to execute plans”. Talk about each of the founders and executives and how they compliment each other. Talk about their past experiences that relate in some way to the solution and product being built and proposed.
Why are these people the right ones, among all other people, to solve this one problem and to build this specific product?
5. Business Model
How are you going to make money?
Are your clients going to buy your product once and that’s it? Or are they going to make a subscription or any other kind or recurring revenue generator? Are your variable costs high? Is your cost decreasing as long as you are growing your customer base? How many employees do you need to generate each €10K, €100K? Is it fully scalable? What are your sales channels?
After answering most of those answers, have a slide showing the timeline of your expected revenues, product adoption and expenses, so that it is easier to correlate all of them visually. Three separate charts will also work.
6. Marketing and sales
What, how and how many units will you sell?
A very important set of 2 to 4 slides should be devoted to marketing and sales. How will you sell your product and what are the projections? You may use a few charts of the previous session, as it will add up in the memory of your public.
What are the milestones and developments of your product and their timeline? How are they forecasted to impact the acceptance and growth in sales of this product? How are those improvements and new features impacting your advertising? Will you announce all of these, or only the main ones? Are you going to expand nationally or internationally? If so, what is the number in sales and revenues that can have your company safe if the expansion goes wrong so that you limit your losses? Give insights into how you are thinking about the future of the business and what growth you believe is achievable.
7. Your request
In order to realize your vision, what do you need from investors and partners?
What exactly you need from investors – is it money, connections, technical advice – or all of them together? Why? What are the priority projects and milestones to be reached? Why do you need the amount that you are requesting? Can you do it with a little less or substantially less if you get access to a market through high level connections from your partners and investors? Would it decrease the need for capital? These are questions that you need to answer in 1 to 2 slides dealing with your request and investment amount.
8. Your pivot
How have you adapted to the current situation?
In these pandemic times, it is important to show your original business idea and finances, further adding one slide or two about how those were affected by the coronavirus pandemic. We have heard from VCs and even the equity crowdfunding community, as in our recent interview with Seedrs co-founder Jeff Lynn that investors want to know how responsive you are. As it totally disrupted negatively many industries while improving others, efforts should be made in order to show how you can pivot and change your business or how you can improve your revenues, especially if you are an online company.
As US President Dwight D. Eisenhower once said: “Plans are nothing. Planning is everything“. Your company’s pitch deck will be a document that will help orientate your journey and growth. The better you make it, the better the outcomes may be. While your business plan may draw your road to success, your pitch deck is your eye-catcher weapon.
Courtesy: Bernardo Arnaud on eu-startups.com