Convergencevc.com After finding a startup idea that excites you a lot, you start doing your research about it. How big the market size is, who the competitors are and how to monetize the business.
Then you start building the product and gain some traction. You manage to get some initial users and, hopefully, paying customers. You achieve product-market-fit and you want to grow your business even bigger. You think about going to angels and VC firms to present your idea. Then the potential investors ask you to send a pitch deck. You have no idea what they are talking about.
What is a pitch deck?
If you have successfully fundraised from investors, or if you have attempted to fundraise, you might be familiar with a pitch deck and its contents. However, for those who just started up might wonder, what is a pitch deck?
According to Improve Presentation, “A pitch deck is a brief presentation, often created using PowerPoint, Keynote or Prezi, used to provide your audience with a quick overview of your business plan. You will usually use your pitch deck during face-to-face or online meetings with potential investors, customers, partners, and co-founders.”
With this definition, we can tell that a pitch deck is one of the keys to successful fundraising. A lot of successful entrepreneurs put long hours in creating a pitch deck which covers all essential and relevant parts for potential investors.
What to include in a pitch deck?
Here are the essential parts you need to include in a pitch deck:
- Elevator Pitch
Do not forget to include your startup’s name, your name or another co-founder’s and possibly contact information. If possible, write a simple and short sentence on what your startup is doing to get potential investors thinking about the potential of your company and the size of the market.
- Problem Statement
Your startup idea exists for some reason. Explain to your potential investors the pain points that you are alleviating. This particular page is crucial and has a goal to get everyone nodding and buying in. Ensure that the potential investors or any audience fully understand what you sell and your value proposition. This page is not the best place for in-depth technical and operational explanation, focus on the solution to fix the pain.
- Business Model
This is the part to explain how you monetize, who your customers are, channel of distribution or cost structure. The goal is to get an overview of how the business works. Generally, a unique and untested business model is not very popular and sometimes it can be a scary proposition. If your startup is truly revolutionary, you better explain it in terms of familiar ones. You can use this page to drop the names of businesses that are already using your product or service to validate the model.
- Defensible Technology
In this part you can describe a little more on your technology, secret sauce or any magic behind your product or service. Focus more more schematics, diagrams or flowcharts and aim less texts.
- Go-To-Market Plan
In this page you can explain your plans on how you will reach the customers and your marketing leverage points. Use this page to convince your potential investors that your company has effective plans that will not break your bank account.
- Competitive Landscape in your startup’s space
Do not ever say that you your company does not have any competitors. Even though it’s not apple-to-apple, your company must have a few companies offering similar value proposition. In this page, you can provide a complete view of the competitive landscape, your strengths versus the competitors.
This page is important in particular because most of potential investors want to know who will run the company, including your co-founders and other key people such as advisors or previous investors. Furthermore, use this page to highlight your previous experiences, education, successes and do not be afraid to show up with less than a perfect team. No startup is perfect, what matters is whether you understand and are willing to fix the holes in your team.
- Core metrics and financial projections
Utilize this page to provide the key metrics of your startups. You need to understand that every startup is unique and you have to find what metrics matter the most to the company’s success. You can also provide a snapshot of three to five year financial projection and future estimation of your key metrics. Ensure that people understand the underlying assumptions of the forecast.
- Current status, accomplishments, fundraising timeline and use of funds
In one slide, describe the current status of your product or service, key milestones the company has achieved, your target to close the round, and how you will allocate the money from investors. Additionally, don’t forget to include the amount of money your company is fundraising.
Preparing a deck with in-depth details is always better because every investor could find any answers to their questions in the deck. Additionally, using a good design is also not a bad idea to spread positivity towards your business. However, please bear in mind fundraising process takes a lot of time and energy, don’t let this process distract you from building a great product or service, because at the end of the day a great product or service with decent market size and traction will get investors attention anyway. Good luck! don’t forget to have fun with your business!
Written by Faiz A. Rahman
Editing by Gary Khoeng
Picture credit: TechPoint