If you've ever raised funds for a new or existing venture, you've almost certainly spent countless hours perfecting your pitch deck. Unlike a prospectus, which goes into great detail about your business plans, a pitch deck is an overview of your company that is tailored to answer the key questions of a potential investor in a 30-60 minute conversation. Here are the ten rules we adhere to when creating a pitch deck.
◆ Keep it simple
◆ Start with your value proposition
◆ Clearly state the problem(s) you are solving
◆ Show your path to profitability
◆ Explain your exit strategy
◆ Don’t oversell and don’t undersell
◆ Charts are great, but keep them simple
◆ Highlight the individual skills and experience of your team
◆ Represent the unique risks of your business
◆ Embrace feedback and be open to change
Bonus: Track who is looking at your deck.
Most great pitch decks have 10 slides or less and are easily understood by people who are not experts in the given industry. To keep it simple, you must be clear and concise. Include slightly more information if the deck is meant to stand alone rather than as part of a conversation. It may contain less information if it is intended to accompany a discussion (we strongly recommend conducting in person or teleconference meetings with investors). Pitch decks that are highly polished and beautifully designed are nice, but not required. Unless you are investing in a graphic design firm, your investors are uninterested in your powerpoint and Photoshop skills.
Much has been written about the infamous elevator pitch: the 15-30 second super simple explanation of what your company does and what makes it unique. If you can't do this, you're not ready to pitch investors.
At the end of the day, investing boils down to three questions: (1) how much money do you need, (2) what are you going to do with the money, and (3) how much money should I expect to receive in return. If your deck cannot answer these questions, it is time to go home. These questions apply whether you are raising funds to purchase a $15 million building or $10,000 to produce souvenir key chains. In practice, always include the following metrics: (1) Current and historical revenue and expenses (2) Future revenue and cost projections for the next 3-5 years (be ready to discuss how you came about your projections).
Exit strategies will differ depending on the industry and product. This is meant to be an answer to the question, "When will I be paid?" An exit strategy could include selling your company to a larger player in three years, refinancing a building in two years, licensing content, or distributing profits quarterly. Investors must see that you are thinking long term and that you have a realistic plan to pay them.
This applies to everything in your pitch deck as well as everything you say in meetings with investors. Investors want to invest in people who are confident and capable, so don't undersell yourself. Simultaneously, humility and a clear grasp of reality are critical to business success, so be realistic and don't oversell yourself or your numbers. Future projections should be based on past performance or best guess estimates based on industry comps.
Charts are a great tool for representing data at a glance, and they are related to Rule 1: Keep it Simple. Charts are excellent for displaying past and projected future growth. However, we cannot emphasize enough how important it is to keep the charts simple. We've seen a lot of decks with custom charts/graphics that try to explain something but end up confusing investors because they aren't familiar with the chart convention. Rather than discussing your company, the conversation then shifts to explaining the chart. If investors want to see a specific analysis, let them request it, and then include it.
A great idea cannot be effectively implemented with a mediocre team. The opposite is also true. Highlight the key members of your team and the values they bring. This isn't a list of people's resumes (investors today have access to LinkedIn and can do their own resume surfing). It is about emphasizing key skills and experiences of your team members that will contribute to the success of your company.
Every business faces some level of risk. Investors are well aware of this. If there were no dangers, we would expect you to be open and honest about them.
We frequently see entrepreneurs withhold sharing their pitch deck because it is "not ready." If you are stuck on resolving a few key issues, don't put off meeting with investors. Be open about your problems and seek help. Meetings with prospective investors can be some of the most valuable time you spend planning your business if you approach them with the right mindset. The most successful entrepreneurs are open to feedback and use the time to learn from the investor pool's experience. Be open to feedback and seek advice from investors (particularly successful entrepreneurs) in order to learn from their experiences. Entrepreneurs understand that it takes time to finalize a successful plan and that successful business people evolve their thinking over time. Your pitch deck is a living document that will evolve over time.
We recommend using docsend.com to track who has viewed your deck and how much of it they have seen. This will assist you in determining who is interested and which slides are receiving the most attention. As a general rule, send the deck at least three days before an investor meeting.
We hope you found this information to be useful. Please contact us if you have any questions. We provide a fixed-fee Pitch Deck consultation service with a one-week turnaround time on refining existing pitch decks or creating new pitch decks. On an as-needed basis, expedited turnaround is also available.
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