So many decks. Such poor results. That’s the fear of many, many founders and CEOs that head out to pitch investors, and there’s good reason for it.
In the course of my work I come across a lot of pitch decks, some of which are absolutely stunning, a few only need minor tweaks but most of which are kinda disappointing. And when I say disappointing, we’re talking in terms of meaningful content here, not the finer details of the graphic design or font selection.
I want you all to create better pitch decks. Killer pitch decks. Decks that knock potential investors off their feet and “stack the deck” (see what I did there?) in your favour, positioning you better to agree terms and take the pick of investors.
To do this, we need to take a step back, add some context and look at investment, investors and then the deck itself.
Note 1: There is SO much more to say about how to raise investment, how to calculate valuations, the different kinds of investor, how deals are structured, how to find good investors etc., but we just don’t have time to talk about that right now. Drop me a comment if you’re interested in any of those other specifics and we’ll see what we can do.
Note 2: I’m assuming y’all have an understanding of how pitch-decks are used.
Note 3: I’m also assuming you have a real business or an idea that’s been validated and you’re not a total dreamer. Send me a message if you’re not quite there yet and want to talk about validation for digital / physical products, services or whatever.
This part may come across a little negative. INVESTMENT IS NOT THE BE-ALL-AND-END-ALL all of a startup’s existence rather than, you know, building a sustainable business.
This is the point where I remind you that investment is only a tool to help you bring about a result, and that result ought to be accelerated growth and a striving for profitability. Don’t even get started on the valuation bubble that we’ve seen, especially in “The Valley”, and the stomach-churning gloating that sometimes comes with raising a round.
Raising a round should mean that it’s game time, the pressure is dialled up to 12 and the bright outdoors becomes a distant memory for a while. Somebody else has given you money. It’s not your money. Don’t let them down.
It’s not always smart to raise VC money, and it’s not always smart to do it right now. Raising capital clearly brings the advantages of a cash injection, increased growth potential, an expansion of your network and a solid source of advice, but it has downsides too.
Investors don’t necessarily share your vision for the business, for how it’s run or who runs it. Sure, they might do at the start of the relationship, but this is like a marriage…you’re in it for the long haul. Just remember that when your eyes glaze over with £££ or $$$ signs.
I’m assuming you’re going to raise, and that raising is the right thing to do for you, but don’t just assume that for yourself. Think about it.
Bootstrapping is cool. Raising investment is cool too. Just make sure your investment approach is aligned with your business goals and lifestyle objectives. Having done both, I’m not bashing either approach.
In general, if you’ve got as far as serious discussions (so…past the pitching stage), investors are really only interested in two things; economics and control. Economics refers to agreements on valuation, stock, term sheets and associated aspects. Control usually refers to decision making, veto power and board seats. Clearly much of this varies on the maturity of your business, but when it comes to negotiating, these will likely be the two pivot points, and much else is either a decoy or unwittingly immaterial. Investors reading this will probably disagree / deny, but maybe that’s all part of the game :)
You will also find a broad spread of investors and investment practices, running all the way from highly engaged mentors to sharks and amateurs to accelerators that offer tech, HR and administrative assistance.
It’s always worth looking at a firm’s previous investments, reading about their way of working and maybe even speaking to past recipients of investment before you make a decision.
What I’m really trying to get across is that not all cheques for £150k are equal.
Heading back to the original subject, in the context of your deck, this is important for at least two reasons:
1 — The better you know the landscape, the better chance you have of making a good decision with regard to a suitable investor.
2 — It can be helpful to change your deck slightly for different investors, placing a focus or emphasis on areas or data that you know (from your research) are likely to be of greater interest to them or play better into their specific areas of expertise.
Note 4: I’m using VC as a catch-all term for angels, accelerators, seed funds, mico-VCs, traditional VCs etc. etc. No need for a labelling or identity crisis just yet, but make sure you’ve researched the investor and their way of working / your suitability first. Probably not too smart to go pitching for seed money to an investor that is only interested in Series B onwards, right?
Thirdly, rules for your deck.
A couple of notes to remember with regard to the deck itself:
1- Content is king. Don’t sweat the font and colours to the detriment of the meat and bones. Of course, make sure your deck looks good and get a creative / graphics person to tidy it up if needs be, but DON’T CONFUSE THE REALLY IMPORTANT STUFF WITH THE TRIVIAL STUFF.
2- Less is more. Investors may see hundreds of decks a month, so keep yours short, visual and punchy. Please, NO LONG PARAGRAPHS, and try to limit each slide to addressing one idea / thought / subject.
3- The exact order of your slides can vary, but remember that an important part of creating a powerful deck is telling a story to which the logical conclusion is you receiving an offer of investment. What’s your story?
4- You want to take your audience on a journey and provoke an emotional response. As you write, remember that this isn’t a boring old FTSE 250 QA or compliance report…make them laugh, cry, open their cheque book, call their loved ones or throw you out the door.
Fourthly, the deck itself.
OK, now we’ve got that out of the way, let’s talk about the slides in the deck. The slide order can vary, but the content needs to be broadly consistent with the following guidelines:
1- Explain who you are and what you’re doing.
This is your opportunity to use a sentence or two to capture the interest and imagination of your audience and explain your idea or business. What’s your mission? In terms of presentation, this can often be paired with your logo on the cover slide / first slide of the deck.
2- The problem.
Explain the problem that you’re going to solve, who it is a problem for and highlight the size of the issue. If nobody else cares, then why should an investor?
3- The solution.
How are you going to solve the problem? What makes your solution stand out and why is your solution better than the alternatives? It’s got to be compelling to both investor and user!
4- Your product.
Show some screenshots, renders, mock-ups or examples of your product. The objective here is to take the concept that you have just explained and make it real in the mind of your audience.
5- The market.
How large is the market you are seeking to address, how have you segmented it, is it growing and what percentage are you aiming to capture? Strive for a balance between ambition and realism. This is often very speculative stuff, but investors want to a) see how you think, b) test your market knowledge and c) evaluate your ability to see the big picture.
6- The competition.
Show some understanding of the competitive landscape. Who else is out there, what are they offering and how are you positioned in comparison to them? Folk often like to demonstrate this via a map, where the X and Y axis denote the two criteria that you believe to be most important to your customers.
7- Your customers.
Oft neglected, it’s really helpful to demonstrate an understanding of who your customers are (or at the very least who you think they are) and why. The more specific you can be in terms of demographics and targeting, the faster you will be in testing your assumptions AND you may well be able to keep your customer acquisition costs lower.
8- Progress or traction.
9 - Business model.
This part often isn’t really thought through very well. Try answering questions such as…How will you make money? How much will you make, by when? What’s the revenue model? How much will it cost to acquire a customer, and what’s their lifetime value?
This one is really, really important. Who’s on your team? What do they do, what have they done and why are they the right fit? You need to convince the prospective investor that you have the right people in place to deliver the goods, even if that means delivering something slightly different to what you first thought.
11- The raise.
How much money are you looking for and why? What are you going to do with it and what will you achieve? Again, optimism without naivety.
Remember, this isn’t your money. Strive for a balance between an ambitious assault on a market, technology or product, a willingness to try and fail fast and a respect for somebody else’s cash.
So there you have it…pitch decks. Well done for making it this far; it’s a long post. If your deck can answer the questions above to the satisfaction of an investor, you’re likely in a good place.
I really hope you feel better equipped to understand whether this is a good route for you right now, and I hope you’re able to create better decks as a result.
If you want to talk more, drop us a comment or send me an email at firstname.lastname@example.org and we would be delighted to chat!