There’s a serious sense of urgency for entrepreneurs to start pitching investors. Even if you’re not looking for funding or even taking your business any further than prototyping, it’s worth your time to learn investor pitch decks. You’ll see what sort of stock phrases are used in the written pitches and some general best practices to make a more effective presentation. This post will help you understand the thought process behind creating an investor pitch deck so that you have all the prep work done before presenting at an event like TechCrunch Disrupt or Y Combinator Demo Day. I also made a video for this post to help with your understanding of what an investor pitch deck is and how it’s used.
What is an Investor Pitch Deck?
Here’s a brief intro to what an investor pitch deck is. It’s an in-depth yet succinct document that gives investors basic information about your business, the problems you’re tackling, and how you plan to solve them. I found that the best startup pitch decks have several similar components: company information, opportunity analysis, product description & value proposition, traction so far and financials. Most importantly, these components are arranged neatly in a logical order so you can naturally lead into each piece of information.
If you are looking to raise funding, then your pitch deck should be prepared in advance for those investor meetings. The documents below will help you put together a killer pitch deck that is reviewed and revised by the best startup founders in the world. Y Combinator’s Startup School has a great presentation on this topic as well.
What are some tips to create a killer pitch deck?
Here are some of my thoughts on what makes for an effective investor pitch deck and how you can create one yourself. Keep in mind that you want to do things that will make investors take one look at your document and say ‘wow’.
1) Start with a strong company summary. Your investor pitch deck will be the opening for your presentation, so it’s important to start strong. It’s not enough to simply list facts like your company name, website url, etc. Why should investors care about this? Because it’s their chance to get first impressions of who you are as a person and what your value proposition is as an entrepreneur. Do you have tech chops? Can you start a company from scratch and create a product that customers will actually use?
2) Use an awesome image. A picture is worth a thousand words. Plus, investors are busy people who don’t necessarily have time to read through everything. Remember that their goal in reading any documents is to quickly get a sense for whether or not your business might be interesting to them. You should highlight your strengths by using an image that represents what makes your company so unique and interesting.. The image should ideally also be consistent with the rest of your branding material, so if you’re creating marketing collateral materials like business cards it’s useful to match those materials up as well.
3) Keep it brief and to the point. Investors don’t have a lot of time to read. Your investor pitch deck should be no more than one page, so that you can quickly move into business overview using a numbered list. You don’t need to spend forever detailing everything about your company, but you do want to provide enough information for an investor to understand if they would be interested in investing in your business or not. It’s helpful when you list your problem areas on page 2, because it helps investors see how you’re solving those problems before delving into a long description of how exactly you’re going to solve them with the product that you’re pitching.
4) Use action verbs liberally. It’s not enough to just list the problems that you’re tackling. You want to make sure that the problems are described in a vibrant way – meaning with action verbs. This will make your pitch very interesting and will strike a chord with the right investors.
5) Highlight the details. Investors need to know exactly how you’re solving your business issues. Don’t simply point out generalities like ‘we’ve developed a mobile app marketplace for businesses’. Instead, give numbers. How many people do you have using your marketplace? What are some of their stats? What percentage of companies are using your marketplace? This gives investors an idea of what makes you different and more valuable then other businesses in this space.
6) Show your team. You don’t have to be a one-man band to succeed with a startup. Explain the team that you’ve built so far and what makes them valuable. Investors will want to know that you have people in place who can actually help you create something that is valuable and useful for customers.
7) Tell a compelling story about the market opportunity. This is where I like to take an investor pitch deck and really tell a story about what’s going on in the target market, how your business will capitalize on it, and why investors should be interested in investing in your business now or down the line. You don’t need to be a great writer or a marketing guru to tell a compelling story – it’s more about having an idea that makes sense and includes a good amount of evidence and anecdotes.
8) Highlight your traction so far. Investors will want to see how you’ve brought people into your marketplace and how many businesses have been listed using the service. You should also explain what the size of your business has been over time. This will give investors some hints into how big of an opportunity this market might actually be, versus just being another business hoping for success.
9) Give numbers on the financials. Here is where you will also tell investors about your financial goals and state how much money you’ve raised so far. This is a good way for investors to get a realistic view of the size of your business and your finances, without making them feel dumb for not knowing that, or over-estimating.
10) Show where you plan to go next. Investors want to see how you plan to grow the business and what the future holds for it. Share a roadmap with them and provide some numbers on how close you are in reaching those milestones. You should also mention any areas that might be problematic for growth and explain which areas you would prioritize over others.
11) Mention milestones (if applicable). You may have created specific milestones that you want to hit in the future. Explain how those milestones were created and include them in the pitch deck, along with a timeline for when you plan to reach each of them and some of your plans if you don’t reach them as planned.
12) Chart out your business model. You should be able to make a lot of sense of your business plan by simply looking at this – however, it’s more for investors who want to understand how everything works together and where their money would go into. This chart should explain how users will find value in paying for your product (or not).
13) Include a slide on competitor analysis. Customers don’t just buy a product or service because it works – they buy it because it can solve a problem that they have. Your product needs to be unique. Investors will want to see what other products are out there and how you’re better than your competition.
14) Include a slide on your company information, including key people and photos. Address the stats of your company, which investors will love to hear about and show off on your presentation slides. You should also put photos of the two founders on the slide, along with some key people in marketing, sales, and support roles.
15) Include a slide on your funding history, either in a chart or in a table format. Investors want to know what your company has been funded, when you raised the money, and how much money you’ve raised so far.
16) Include a slide on the future of your business. This is where you will point out how you plan to grow the business and where you see yourself in 3-5 years. You should have some key milestones that will help move the business toward that place for years after this investment comes in.
17) Include slides with any competitive advantages that might benefit your product development or sales efforts moving forward. For example, if you create a marketplace for podcasts, you might want to mention how you’re one of the few services that allow users to not only listen to podcasts, but also give their own opinions on them.
18) Include slides with any real life examples that would help demonstrate your product value. Try to find an example from someone who has used your product. It doesn’t have to be the best possible case scenario, but it should at least show that there’s a real value proposition for the customer when they buy your product or service.
19) Include slides describing your marketing strategy and tactics. Investors will want to know that you have some sort of plan for getting the word out about your product and how well that is working so far. They want to know if your product is viral in nature, or if you rely on paid marketing. This gives them a sense of how much value they’ll be able to extract from their investment.
20) Include slides with any growth strategies. Investors want to know how you’re planning to grow the business over time (especially if it’s a subscription-based business). Show investors what growth strategies you plan to use and what sort of metrics you would like to reach in one year, two years, three years, etc.
21) Include slides on competitive advantages and threats. Your company faces competition from both inside and outside the industry. It’s good to be aware of what those threats are, but you should be able to explain how you can overcome them.
22) Include slides on your management team. Tell investors about your management team and some photos of the key people in your organization.
23) Include slides on the financing plan for the business. Investors always want to know how much money they’ll make out of a deal, so this slide will let them know that you’ve done your research as well. You don’t have to be exact with numbers here, yet you do need to explain what sort of expected return investors might get out of a deal with you.
24) Include slides on your future goals and your exit strategy. Investors want to know where you see the business going in two years, five years, and 10 years. They also want to know what will happen when the company exits as a whole.
25) Put some slides together based on feedback from previous investors. Investors want to feel like you’re listening to them and that you’ll do what they say in a deal – it might not always work out, but it’s better than not putting in any effort at all. This is especially true if they told you what they wanted from your pitch deck in the past (or if there were questions that came up during a chat).
26) Include a slide on your exit strategy. Investors want to know what your company will be doing once you get acquired. How will the investors be able to extract more value from their investment? Will they still own equity after the sale?
27) Include a slide on competition that shows customer feedback. Investors want to know that there are customers who have used products similar to yours and are actively using them today! You don’t have to explain the entire feature set, but it’s nice for investors to see that there is market demand for this type of product.
28) Include a slide on how big the market is for your product and why you’re going after it. If you’re trying to get a deal, this slide will show that you know how big the market is for your product. It’s fine if the estimate is off a little bit (especially with growth), but investors need to see that you think well of your product and have done some research on whether or not there is actually a large market opportunity.
29) Include a slide on what other investors have been in for similar deals. This shows investors that someone else has put money into something similar to what you’re looking to do and that they’ve received value out of their investment. Investors want to see others like them who were able to raise money from angels or VCs as part of a deal you presented before them.
30) Include a slide on the management of your company. This gives investors a good idea of who they might be dealing with if they invest. They’ll probably have some questions to ask, and this is the place to answer them. It’s also a good place to add your bio information for investors to review and show that you know what you’re talking about.
What to Notice at the Investing Stage
By this point, you should have gathered investor feedback on your pitch deck – from every investor, not just one or two. It’s better than not having any feedback at all, because you can research those comments and use them to improve your pitch deck moving forward.
It’s better to revise and improve your pitch deck than to have one that’s completely shot down by investors. Once you get feedback, make sure you follow up on it as soon as possible.
Remember, investors will ask you a lot of questions about your pitch deck once you start reaching out to them, so make sure that all of the information is accurate and detailed. This means going back to your previous investors and asking them if there is anything that needs updating or changing. If they ask for something new, add it! If they’re satisfied with the information, remove the old items! Rinse and repeat. You’ll need a lot of revisions and re-writes in the pitch process – be prepared for that.
Make sure you’re telling advisors the same story that you’re telling investors. You can’t be telling investors that your company is going to be some massive global phenomenon and then tell your advisors that you think it’s going to take a little longer than expected to get everything running.
If the one thing that investors are most worried about is something that they didn’t even ask about in their feedback, it’s probably something problematic for the business. That means they’ll value it as extra information which helps them to better understand how well-run the business actually is.
Be specific about the company’s size. Investors want to see that you’ve thought through how much money you need to raise and that there will be enough money coming in to help build a good business. They’ll also want to know what percentage of the company’s turnover is currently accounted for by this funding round – 30%? 50%? 75%? Whatever it is, make sure investors know where their money is going and why this amount of money is needed for the business.
Be prepared for any questions investors might have. If you don’t already have the answers, it’s better to admit that you don’t know than to tell an investor that you’re going to go ask your boss about it. Treat investors like they’re real people with their own feelings. Being professional is the best way to impress them.