Investor Pitch Deck
What is an Investor Pitch Deck?
Generally, investors want to invest in a company/products/ideas that will bring a return on their investment. In view of this, investors are interested to know if the product/company has the potential of being successful and that it is worth investing in. Although there are many other motives for making an investment for example; to make a social impact, most of the time the number one motivation to invest is to make money.
You may then wonder how do these investors know which companies, products, or ideas are worth investing in. They are introduced to these through an Investor Pitch deck.
An Investor Pitch Deck is a presentation prepared by startup companies showcasing their ideas or problems they want to solve, the solutions/products to the problem, the technology to be used, and the team involved to potential investors for venture capital/investment.
A Pitch Deck is the starting point of the extensive process of obtaining funding. This makes it very crucial since no one wants their journey falling inauspicious with the first start.
An Investor Pitch Deck’s goal should be to ignite enough interest to lead to a second meeting or a request for further information from interested investors.
Why you need an Investor Pitch Deck?
Now that you know what an Investor Pitch Deck, let us look at some of the reasons you might need one for your business.
- The number one reason you must have a Pitch Deck is of course to help you obtain venture capital/ investment in your business. Some other businesses are in the search for partnerships when presenting a Pitch Deck.
- An Investor Pitch Deck is a good opportunity for a business startup to showcase their business ideas as well as products. A pitch deck tells the story of your business.
- Business founders are able to evaluate their business thoroughly before presenting it to other people. This critical review can help them identify and address any underlying issues that might not have been obvious without the opportunity to look back at the many areas captured in an Investor Pitch Deck.
Investor Pitch Deck Slides
From the above section, we are in agreement that yes you need an Investor Pitch Deck. So, how do you prepare it?
There is no one way of drafting a Pitch Deck. The general rule of thumb is to keep it short. But how short is short? You can have one idea presented in multiple slides but remember you should never have multiple ideas in a single slide. You want to keep your audience (investors) engrossed and also up to date in a glance if they get distracted.
Below are some of the most crucial and common slides included in an Investor Pitch Deck.
The overview includes a brief introduction, which should contain a summary of your business. This can be as short and sweet as one sentence.
From the overview slide, your audience should be able to tell who you are (business) and why you are presenting to them.
It is not uncommon to find Pitch Decks with an overview that compares the startup’s unique selling point to that of a renowned company. This is especially so in companies in the tech industry. For example; “ We are the Netflix for games.”
However, this does not give you the permission to throw around reputable names all over in your overview, you should ensure that your business’ potential for growth or business model can come close to the referenced company.
This slide expounds on what it is that you want to solve with your business idea/innovation. You should mention who has this problem. The problem (s) should be existent and relatable so that they are well understood by your audience.
In the solution slide, you offer a way out of the problems highlighted in slide 2. Your solution should be easy to understand and follow through.
When well presented, starting from the problem, you build up the audience's expectation from a convincing description of the problem so that they are eagerly waiting for your solution.
In some cases, the solution is in the form of your product (you can delve deeper into this in another slide- Product)
As mentioned above, most of the time the solution to the problems mentioned is in your product offering. It is therefore normal to have the solution and product slide as one. However, if you want to elaborate more, you can have a brief introduction in the solution slide then expound more with another slide titled product. Your product should clearly be addressing the problems outlined in the problem slide.
While it is normal to get excited when presenting the product, please refrain from dwelling too much here as the main thing most investors want to hear is about the market (customers) and the problems it is facing. This is the real gist of the matter.
This slide presents the market, its size, and the opportunities available. It is closely correlated to the problem and solution slides since your market size mirrors the extent of the problem you want to solve.
However, do not get it wrong and think that market size is all that matters. Investors are usually looking for a reachable market. It helps when you are also as specific as possible on who your ideal target customers are. The best way to present this is by using measurable numbers starting with total available market opportunities then narrowing down to your specific market share.
Where possible, your market can be segmented for different marketing strategies or even for different product offerings. A phenomenon that could be changing very rapidly especially in modern times. Do not shy away from highlighting this. Spark the interest in investors to create the urge that will leave them feeling that they have to invest now in your business due to the fast-changing market opportunities and needs.
- Marketing Strategy
After predicting and displaying what your target market looks like, the next thing you want to do is to highlight your game plan in getting noticed by these customers and your methods of winning them over to your sales process.
This slide should therefore highlight your key moves and approaches to get the acceptance of your product by the target market. We all know that identifying, wooing, and retaining customers can be very challenging especially for startups. Investors want to know that you have thought thoroughly about it and have plans in place on your intended reach to potential customers.
In the event of you having a different marketing approach that is new or not in use by your competitors, it is good to proudly present it as it shows a competitive advantage that is to your benefit.
Traction demonstrates that you have customers available for your business idea as well as indicate their value. That is, affirming your market size. Recall when we said that most investors want to invest in a business that will bring a return on their investment?
Therefore, when making your pitch, you want to show that your business can continue acquiring customers over time and also indicate the value pegged on each of your customers. For startups, this is illustrated popularly with the “hockey stick curve” in a graph. A hockey stick graph is a good indicator of traction, the number of customers and their spend on your products start off minimally then continue growing upwards.
One may wonder what to include here if their product is not fully developed and ready for the market or if their business is at its earliest stage of inception. In these instances, you can prove traction through other metrics such as preorders, app downloads, website traffics, notable commendations filled out in surveys indicating potential customers’ interest, letters of intent, testimonials, beta sign-ups, user base, etc.
The traction slide can also highlight any fundamental milestones made, notable affirmation/ acceptance by big brands, plans for strategic partnerships or any other goals in place that validate your solution (and product).
- Business Model
This can either be your business model or revenue model and is the slide that expounds on how your product will generate money. This includes your pricing, any bills/expenses that you anticipate to incur together with the parties responsible for them, a schedule on revenue projections and the dates you expect them, mechanisms to acquire customers and their related costs.
It is important to show how your business model (especially your pricing) compares with the market. That is, compared to other solutions available in the market are your prices budget-friendly, highly-priced, or at a premium.
From the legendary Airbnb pitch deck, their business model slide was impressive and is considered to have been the “killer slide.”
The team slide showcases the key people in your business. The attention is especially so on why they are the best fit for the business. You can demonstrate this through highlighting their accolades, achievements in their specific roles even if it is from past companies and the expertise they bring on board. Investors want to know why they should invest in your vision. For startups, the founder’s/team vision comes first before the product or solution. This means that their (investors) investment is directly related to the team on board.
The most common way of presenting this slide is by having a picture of the team members, their role/title, and a short description of their area of expertise and experience.
The main objective of the team slide is to show potential investors that your team has what it takes to bring success to the business i.e, the confidence that they are the right people based on their skill set, past experiences, accomplishments and their level of shared purpose.
Remember to exercise caution to not overcrowd the slide with every person in your company. Only include key members. However, you can add an appendix highlighting additional important members e.g board members or consultants/advisors.
In this slide, you want to showcase your current financial status as well as projected financial figures ( e.g sales forecast, cash flow estimates) for the next three to five years.
To prepare for the content of this slide you must-have attachments on key documents such as the main financial statements i.e Income statement, cash flow statement, balance sheet, etc.
You may encounter the term burn rate which is related to financials. Burn rate is the speed (often monthly) at which a business is losing money i.e operating on a negative cash flow. For startups, this is not a strange phenomenon especially because the cost of building and marketing a product can be quite significant on inception without matching any incoming revenues from sales/product adoption. To the investors, the burn rate is important to them since it indicates the rate at which the business will be “eating” into their invested capital before being profitable.
Pro Tip: Your projections should match what you presented on traction so that they are as real as possible. You should also state the key assumptions you make when coming up with the projections.
Truth be told, there is no business that exists without competition whether direct or indirect. And a good business should know its competition. This slide acknowledges your existing competitors, the threat they pose to your business, and why you stand out compared to them (competitive advantage)
To present this, you need to highlight what your competitors are good at as well as their weak points and then position your business amidst this. Elaborating on your unique selling points/ value propositions will set you apart from your competition. This can be enhanced with other major differentiating factors such as exclusive intellectual property rights etc.
Investors want to know your competition as a way to better understand the market, know what other solutions are an available alternative to yours, be aware of the potential of having your customers lost to other rival businesses and use that information alongside other pieces to make a decision.
- Investment and use of funds
This slide is also referred to as “The Ask” and is usually among the last slides. It clearly indicates your expected budget and what you want from the investors. In short, it justifies the whole essence of making the pitch.
The ask can be in terms of;
- the exact money you are looking to raise. It is acceptable to have this as a range.
- how you plan to use up the money raised. A good practice is to tie up the use of financing to facilitate the achievement of set business goals. You can narrow to specifics as follows,
The financing will help in;
- developing an application
- hiring more crucial team members
- enhance existing marketing strategies to improve revenues
- the financing lifeline which is basically how long the finances will last.
- any other assistance you might need from the investors
It is advisable to include in this slide any other existing investors you already have in place, how much you raised with them, and the reason they chose to invest in you.
Other slides to have
The following additional slides can be useful in helping potential investors more about your business. You might leave them out in your presentation because of time and also not to overload it but they are important materials to be used for more information afterward.
Where applicable, investors are interested in knowing the fundamental technology in your business. This applies to the one in use and any other that is being developed. Therefore to be addressed in this slide is the issue on patents, rights/licenses, trademarks, bow hard (or easy) it is to have the technology replicated and convincing reasons as to why your technology is the best there is.
This applies when your product has a prototype. So the purpose of this slide will be to showcase the functionalities and usability of your product. This can be in the form of short demo videos, images or screenshots.
- Strategic partnerships
In some businesses, it is highly essential for them to have some strategic partnerships with other businesses for example with a distributor to help in the sale and marketing of their products. If some of these partners are so crucial that your business cannot be successful without them, then you need to mention them in this slide.
- Exit strategies
Investors are keen to know how they are going to have a return on their investment. This slide outlines if you have any plans on going public e.g through an Initial Public Offering or being acquired by another larger buyer when your startup becomes very successful. These options of “exit strategies” can give potential investors the confidence that their stake will have a return.
Fatal mistakes to avoid when creating an Investor Pitch Deck
- Not knowing your audience
This is the number one mistake you can ever make when presenting your Investor Pitch Deck. You should carry out a thorough research on the audience you are to present to. This will help you know who they are (are they experts in their field? are they venture capitalists?), their investing trends, or their interests so that you prepare your presentation accordingly.
You should seek answers to the following questions about your audience as part of your research preparation; what do you want the audience to do after hearing/reading your pitch? what do they need to know? what impression do you want them to have about you and your pitch?
- Being vague
You should avoid using words that are unclear to the audience because doing this might lose the audience’s interest and make your pitch unmemorable. Sticking to basic explanations in a manner that is precise will help you pitch in a matter of minutes. It helps when you focus on content and presentation tricks that are memorable and captivating to your audience. It is also okay to tweak your pitch accordingly depending on your audience. For example, if you are presenting your Investor Pitch Deck to a group of experts, it would be okay to use technical terms. Similarly, if your audience is a general group, then you should keep it simple. A good rule of thumb in this is to maintain a maximum of one concept/idea for every slide in your Pitch deck.
- Overcrowded slides
Having overcrowded slides that will prolong your presentation is a mistake that you should avoid. Remember that most investors might not have the luxury of time. They want to have a brief overview of your business ideas and if interested request more detailed information. So instead of being too wordy, you should keep your presentation simple and if you need to provide more information, have it in the appendix.
- Do not dismiss or overlook the competition slide. As we mentioned, every business has competition in one way or another.
Investor Pitch Deck FAQs
How long should an Investor Pitch Deck be?
Contrary to popular opinion of maintaining an Investor Pitch deck to 20 slides, the length of the pitch deck really narrows to personal style. Well, the goal is to maintain it as brief and concise as possible while capturing most of the components we mentioned earlier on in this guide. So if you are able to have 6 slides for your introduction or one with a single image to cover the introduction, it is up to your personal preference.
However, remember the rule of having one idea per slide or in a couple of slides but never should multiple concepts be filled in a single slide, you might confuse or lose your audience. You should also take into consideration the time allotted to pitch and answer any arising questions. All these factors are what will guide the length of your Investor Pitch Deck.
Expert Tips to Create a Killer Pitch Deck
The following are tips to make your Investor Pitch Deck great;
- Use visuals and images that are interesting and that will help you get your message home when presenting. These when combined with catchy phrases or soundbites will make your presentation memorable.
- Where applicable, have a slot to include a demo to showcase your products and (or) platform while making your presentation.
- Make use of a good design, presentation layout, good quality content as well a consistency in the style, size, and color of the font used.
- Keep your presentation simple, concise and clearly articulate your ideas confidently.
- Get to know more about the audience you are presenting to. Elaborate research on such things as what are their investment preferences? What does their investment portfolio look like? etc will help you prepare better for your presentation.
- It is also good practice to send beforehand a PDF document of your presentation to potential investors before presenting. This will make their questions more targeted and concise.
What is the 10 20 30 rule in a Pitch Deck?
According to Guy Kawasaki, a renowned marketing specialist and venture capitalist in Silicon Valley, a pitch deck/ sales deck/ partnership deck should have an optimal number of 10 slides, be presented in 20 minutes, and have the font size therein not anything short of 30 points.
Its aim is to ensure that you keep your presentation simple and not to lose the attention of your audience, 30 points size is for the visibility of everyone (even the old) and then the 20 minutes ensures that you are prepared for any hitches that may interfere with your allotted presentation time (usually 1 hour) while leaving some adequate time for Q&A.
When you are looking into raising capital for your business, you will need to have an Investor Pitch Deck as one of the major components in your fundraising toolkit. It is the first communication point with potential investors and helps them decide whether or not they should pursue the business opportunity you are presenting to them. Therefore, your Pitch deck should be as convincing and persuasive as possible to captivate the interest of potential investors and eventually lead to an investment in your business.
As odd as it may sound, the aim of an Investor Pitch Deck should not be to get money in the first presentation round. It should be to spark adequate interest for a second meeting and (or) a request for further documentation from interested investors.
They are renowned Investor Pitch Decks from various startups that helped them raise impressive amounts of capital. For example; Airbnb, Uber, Mixpanel and Mint’s Pitch decks are some of the decks available to learn a thing or two from. There are also very many available online tools and resources that can help you in creating your own Pitch deck, as in this Google template.