So, you’ve broken the ice and given the investor a killer elevator pitch on your business idea.
You’ve hooked them in with your idea and the possible gains the investor might enjoy by hopping on board.
So, what now?
Just hand over the chequebook?
Well, not quite.
You now have to delve deeper to drawing in the investor and impressing them with a pitch deck.
In the first part of this guide, I’ve introduced you to the concept of pitch deck and the best time to present it to investors.
Let’s now turn attention to how you should build and structure your pitch deck.
To do this, I’m first going to introduce you to the most common pitch deck structures out there and with those in mind move on to exploring the building blocks of a good deck.
Once you know about the different options in terms of structure, I’ll look deeper into the storytelling aspect of pitch deck – how to capture the imagination of the investor with the way you structure and tell your story.
But which structure?
Don’t worry; I’ll also help you in deciding which deck structure combines the elements of a good pitch deck and an intriguing storytelling model.
More importantly, how at different parts of your startup life you might want to use different structures.
The different ways to sell your startup idea to an investor
I can’t stress this enough but pitch decks really are like stories.
And just like there are plenty of ways to tell a story, there are different ways you can structure a pitch deck.
If you start looking for pitch decks, you’ll find pages full of templates and suggestions.
So, how do you know which one is the best? Which one will give you a better chance of signing the investment deal and getting your hands on those sweet $$$?
The answer lies in examining the pitch decks that have actually worked out in the real world.
I’ve chosen four decks that have made money and which give you a great idea of the power of structuring your deck right.
But they also show how there are different ways of causing impact – the structure is vital but there isn’t a single solution that works. Instead, different deck structures can create just as meaningful impact as others.
So, let’s look at the four examples.
Guy Kawasaki – Simplicity at the core
Guy Kawasaki was evangelising Apple when other people weren’t.
I’m throwing it out there because it shows the guy is about innovation and he has an eye for knowing when a business works.
He’s been involved in countless companies from Mercedes-Benz to Garage.com.
He knows about VCs because he founded a matchmaking service to connect investors with entrepreneurs.
It’s no wonder then that his pitch deck is often the most cited template for pitching to VCs. Kawasaki’s reputation in the business world oozes knowledge.
So, what does a man behind so many successful ventures advocate in terms of pitch decks?
He follows his 10/20/30 rule of PowerPoint. This means you have a pitch deck with ten slides, your pitch lasts no longer than 20 minutes, and the font can’t be smaller than 30 points.
How does Kawasaki structure his startup pitch decks?
Sequoia Capital – Speaking the investor language
When it comes to pitching to investors, you really ought to listen to one group more than others: the investors.
You’re talking to investors so they probably have a good understanding of what they want you to say in order to get a ‘yes’.
It’s not a big surprise then that one of the most popular pitch deck structures often thrown around is one suggested by Sequoia Capital.
The leading Silicon Valley investment firm has partnered with companies with a public market value of over $1.4 trillion.
Noting their pitch deck structure is kind of like time travelling to see the football results before placing your bets.
Quite simply, the Sequoia Capital pitch deck structure reveals you what language the investors are looking for you to speak.
So, what is the investment firm hoping to see in terms of the slide order?
The Sequoia Capital pitch deck is not looking for a specific slide number but focuses on ensuring you provide the right information.
However, the company does believe all the above should not exceed 20 slides.
Dave McClure – Pitching live for angels and VCs
Another super popular model from a real insider (if you will) in the industry is the pitch deck template by Dave McClure.
The founder and CEO of 500 Startups has built one of the most successful investment funds for early stage tech startups.
McClure has also worked for the likes of Facebook, Skype and Microsoft – he knows what the investor is looking for and he knows what it’s like to run a startup.
His famous pitch deck template is great for crafting the whole presentation.
After all, you’re not necessarily just going to send the pitch deck to the investor – you need the confidence to present it in front of the investor. And this can be challenging.
Therefore, in order to build a proper pitch, the McClure model is helpful in terms of the structure it uses.
As you can see, the model has a similar feel to Guy Kawasaki in that it is short and sweet, consisting only 10 slides.
Airbnb – The $600k deck
The above examples look at the pitch deck structure more from the side of the investors.
While they work and give you great insight into the mind of the investor, you are probably hungry for a pitch deck structure that has provided a clear tangible result.
Something you can study in detail – not examples of how you can do it, but how someone has already done it.
For this, the Airbnb deck is perfect.
It was able to attract $600k in investments so it can reveal how you can truly nail down the pitch deck structure.
You can view the actual pitch deck here but I’ve outlined the main purpose and the order of the deck right here.
Now, the Airbnb pitch deck is also relatively short – altogether it had 14 slides.
For this pitch deck, the structuring is really aimed at pointing out the crucial key – especially in terms of Airbnb’s success – of market size and simplicity of a business model.
It first introduces the possibilities of the market and then hits the home run by saying how straightforward its revenue model is. It won’t need a huge slice of the pie in order to make great profits.
In a way, the pitch deck uses the structure to focus on giving the investor exactly what it wants: returns.
The building blocks of a convincing startup pitch deck
So, pitch decks.
What were they all about?
Startup pitch decks are a short representation of your business to an investor.
The best pitch decks are visual, clear and crisp – they provide enough information about your startup to help the investor determine whether it is worth investing.
Remember, you are not using pitch decks to just outline your business idea.
You are using it to get the investor to give you money.
Do investors just hand out money?
No – they need the startup to be able to provide them returns of around 10x the investment.
Therefore, your investment pitch deck must tell a story that paints a picture of your business as investment ready – a potential money-making machine.
So, I’ve shown you four examples of how pitch decks can be structured.
Before we delve deeper into this topic, let’s examine the key components of a pitch deck.
By glancing at the four examples, you could see the similarities – there are five elements all pitch decks have.
These are the building blocks that provide core structure.
Because they are central part of storytelling…and as I’ve said, storytelling is the only way to pitch to investors.
Investors are not looking to stare at facts and figures on a slide – they want stories that engage them and make them feel like they would miss out on an opportunity if they didn’t invest.
5 common building blocks
So, what are these building blocks; these core elements you need to tell a convincing story?
First, you have the problem.
This is the essence of your story because if you don’t have a problem, you don’t have a convincing startup.
A business needs a problem because if there’s no problem, you can’t provide a solution – a product or a service.
So, what does the problem slide look like?
It’s essentially just a short explanation of the pain points customers have.
For the wine app startup I used in the elevator pitch example, it was customers not being able to pair food and wine efficiently and fast.
It was the fact retailers have limited selection and food delivery companies don’t deliver fast enough for you to pair wine and food on-the-go.
You need to paint the picture of this pain point with a visual or a few words.
You need to tell the investor why you are there pitching your product.
A good example slide to explain the problem is this one by Airbnb:
Source: Slide Share presentation
It’s good because it tells the problem by visually lifting the pain point out from the individual focus points – Price & Hotels = no easy way exists.
At this point, you also need to introduce another important element of the problem – the market opportunity.
Sure, people have all sorts of problems. Heck, I had problems peeling a tangerine this morning.
But for investors, the important part is knowing whether enough people have this problem.
Will the tangerine peeler make enough people go “Yeah, I’ve had that problem as well, finally!” – or, perhaps, it is just me and ten other people who feel this way.
Therefore, you need to be able to explain in the pitch deck why solving the problem matters.
To do this, you need to introduce the market opportunity.
You need to outline the market size.
For example, the US has 120 million wine drinkers with 38% of them drinking wine every single week.
Having a big market size is, of course, not enough.
You also need to be able to show that the market size is expanding and that it provides growth opportunities for your solution.
For example, just 5% of global wine sales take place online – the wine industry is big but the online market is still relatively small.
However, your investors would be eager to find out online wine sales increased by 600% from 2006 to 2015.
If you can show similar growth opportunities in your field, you help validate the market and the opportunity for growth.
By doing this, you show that your problem can make money – which is what the investor is mostly concerned about.
Airbnb also succeeded with the market validation with this slide from their pitch deck:
Source: Slide Share presentation
Again, it focuses on the key figures and it makes them visually jump in the investor’s eyes.
It makes it easy to notice what the slide is about because of the title and the font makes the figures stand out – it screams, “Look at the potential!”
Of course, your pitch deck also has to focus on the essence of your startup.
What it is that you do?
And that is answered with the solution slide.
Your startup’s sole being is based on the solution you offer to the problem you’ve realised. You’ve started your business because you had an idea that would solve a pain point, make lives easier, or change how we do things.
In the solution slide(s), your objective is to explain the solution in a short and sweet manner.
For example, for our imaginary wine app startup, the solution was an app that allows you to pair food with wine, choose from the recommendations and get the wine delivered to your door within 2 to 3 hours.
However, not all solutions are alike!
Again, investor focus won’t be just the solution.
The investor is looking for a solution that will break in the market.
And remember, the market will already have businesses in it. What’s more, the world is full of super companies like Amazon and Google that could enter all sorts of markets if they wanted to.
With this in mind, you can gain better investor interest if you show why the solution is meaningful.
Why it is better than alternative solutions, aka your competition.
More importantly, why you won’t have someone overtake you as soon as you launch – your competitive advantage against the world.
A good example of a solution slide comes from Square’s pitch deck. The product/solution slide tells what the product is about, how it works and why it works well.
It also manages to provide a solid introduction to what the competitive advantages are about (the technology).
Source: Pik To Chart website
You shouldn’t list all the functions of your product or service. Above everything, pitch decks are short and simple.
Therefore, your slide must focus on the essence of your solution.
As I’ve mentioned earlier, you need to be able to explain your business idea in a sentence.
When you go into detail why the solution is good, your focus should be on two to three keys for why you are better and what your competitive market advantage will be.
Is it the technology? Is it the IP rights? Do you have a better pricing policy? Is it the access customers will have?
Focus on the most effective protection and benefit your solution has in terms of competition.
At this point, you can also include proof points for why you say that you’re better and your solution is one that customers want.
You can include real data to your investors by showing the metrics that show traction:
- Churn rate
- Customer engagement rate
- Return rate
These figures will provide more strength to your argument.
For example, check out Facebook’s pitch deck in terms of the traction slides:
Source: Pitch Deck Examples website
The slide shows current data and it shows how many people are already engaging with the service – both total number and the unique, new users.
The information is visually appealing because it combines images with text.
It also makes it easy to immediately see what the key figures are, as they are highlighted in the information.
Now, although Facebook was not making any money at this point, it could show a huge traction. With 70,000 people using it, the investors could see there are 70,000 users that could potentially be monetized!
However, you don’t want to list them all on your slides – again, the focus is on short and sweet – but to pick the few most convincing ones for the investor to see.
If your metrics don’t exist or they don’t really reveal that much – leave them out.
You’re much better off selling your idea and vision, then showing lukewarm traction rates.
With the above in mind, your pitch deck also has to focus on the team.
In fact, a startup called DocSend studied over 200 pitch decks and found out that the team slide ranks high in the slides investors want to see.
For many startups that don’t yet have any traction or something even a product to sell, the team can be the only thing that convinces the investors to invest.
Indeed, investors tend to invest in people, not necessarily ideas.
I’ve told the story of the entrepreneur who received $2m in investments without having an idea.
Itay Adam’s 40-minute pitch had five slides full of jokes but no product.
Yet, he walked away with an investment.
Because investors don’t just invest in ideas, they invest in people with potential.
So, what do good pitch deck slides reveal about the team behind the solution?
You need to outline who you are – a picture together with the name of every founding member will be sufficient.
Since the emphasis is on short and sweet, you don’t want to start listing all the qualifications.
You need to think about the storyline – what are the most convincing elements of your past that speak volumes about why you are setting up the business?
Why are you qualified to launch the startup and solve the problem better than the alternative solution providers?
Perhaps, you’ve done something similar before or you have worked in the industry for 13 years.
Again, find the unique selling point that links you and each team member to the solution.
Why are you selling a wine retail app? Because I just sold a shoe retailer app I developed for $30 million!
You can list your experience and achievement at this point.
A great example of balancing your qualifications with what is relevant with your startup comes from this slide by Dwolla:
Source: Slide Share presentation
With the help of this deck, the startup raised $16.5 million.
But you should also spend a bit of time explaining the team vision.
So, you’ve shown the investor the problem and the solution, but where do you want to be? What do you want the solution to do to the world?
Investors like entrepreneurs who think big – who can see beyond the present and paint a picture of a future that’s exciting.
If you want, you could just include a slide with your business vision written on it.
This will help investors see inside your head and figure whether they agree with the direction you are heading.
It essentially makes it easier to see if you think alike – if the investor likes what you are trying to achieve, they might invest even if your solution needs a bit of tweaking.
Just like with Adam; the product might not be exciting but the entrepreneur might have the right drive to achieve change and make big things happen.
Now, there is one more element to consider adding to your pitch deck: current investors.
Name dropping can help.
Because investors know each other – they know who the big players are.
And if you have a big player investing in your business, others will be attracted like bees are to honey.
Having a big investor on board says to the investor:
“Someone has already looked at your business – all the same details that the investor in front of you is looking at – and decided it’s definitely worth the money.”
The business model
The final two core elements I’m mentioning are crucial because they focus more deeply on your startup’s ability to provide the investor with a return.
Yes, the solution with its market potential will give the investor a good idea of just that: the potential for a return.
But investors are not there to take a punt.
Investors take calculated risks – risks that they’ve thought about and which have a potential for return not just a stab in the dark.
Think of it like this:
Investors want to break a balloon. They need to do this in a dark room but they can control which room they pick and start waving the needle.
They can choose to go into a dark room where they know there is a balloon. Hitting it is still a bit of a risk but they know there is a balloon and they know the size of it.
This is calculated risk.
If they just randomly walked to the first dark room they see, they’d be taking a punt.
So, how do you ensure the pitch deck makes the investors realise there is a balloon in the room?
You show them how you are going to make money with the potential market.
For my wine app, the business model was based on a 2% commission from the vineyards.
To your startup, the right business model might be based on subscription, a one-off payment, a specific share of sales or advertising revenue.
You need to outline this in your deck and show what will happen when you start chipping into that market revenue.
So, you can’t just say you are going to use a monthly subscription model.
You need to show what you are going to charge for the customers and what this looks like in terms of generating revenue.
What do you make when you have 1,000 customers and 0.01% of market share? What about when you hit 50,000 customers and 2% of market share?
Now, it’s important that you don’t just talk how the business will make money.
It’s also a good idea to give a step-by-step guide to customer acquisition to monetization.
For inspiration, examine the slide by Fameron.
Source: Slide Share presentation
The reason the slide is good is that it focuses on the figures. You can clearly see how the startup is planning to make money (subscriptions per animal per month) and how the revenue will keep growing with these figures in mind.
The investor is able to see the growth potential, the current revenue stream and the model’s ability to keep increasing the revenue.
Now, the other slide that can dig deeper into your attractiveness in terms of providing a return is the finances slide.
You should always include any financial proof you have to making money.
First, you should focus your attention is showing what kind of cost/revenue structure you will have.
I.e. what will the cost of acquisition be – how much will it cost at each stage to acquire a new customer.
Naturally, the investor wants to see the cost of acquisition to lower dramatically as you grow your customer base.
But you must also focus on the traction you’ve already had.
Have you started growing? How quickly have you been able to attract new customers and more importantly have you been able to keep these customers?
Of course, you might be thinking what if I don’t have any of this?
As I’ve said before, you don’t necessarily have a lot of figures in the bag when you start pitching to investors – after all, it can be the investment that you need to launch those prototypes and market to your customers.
If the data just isn’t there, your pitch deck should still talk about finances but focus more on the fundraising aspect of it.
The emphasis should be on what you need to get in order to start making money.
What are your predictions – how many customers you need to start turning a profit?
How much investment do you need to validate these assumptions?
You need to show the metrics – customer acquisition cost, revenue, etc. – in the light of what they are today (if possible), what the investment should be and what it will do to tomorrow’s metrics.
One of the best slides in terms of the financials comes from Mint:
Source: Pik To Chart website
The slide combines a good amount of images with text, making it more exciting to look at.
It also has detailed information on the current situation as well as the projections based on the metrics the startup had available.
What’s more is how it includes the potential investment in these assumptions – it tells the investor exactly what they investment will give.
Now, in term of the business model and the finances, investors are going to scrutinise these the most.
In that DocSend study, the financials slide was the slide investor spent to most time examining it – if you want to get one slide right, you really need to make it this one.
Other crucial slides to include
Now, the above are the five core building blocks of a pitch deck.
You don’t need anything else to convince an investor if you just have the information outlined above and you structure it convincingly.
You need those elements to tell a good story.
However, there are a few other elements many good pitch decks add to their structure.
If you compare the elements I talked about with the four pitch decks I introduced at the start, you can see some of them go deeper.
Now, these elements are not the core slides. If you don’t have them, you won’t fail.
However, depending on your circumstances, they can add to your storytelling and boost the investor’s confidence in your startup.
So, what are the additional tricks you can pull up your sleeve with the pitch deck?
The product demo
You can introduce your product further with a demo slide.
This, naturally, only works if you have the product out already or you’ve used the previous investment to build an MVP.
For example, my wine retailer startup might have a rough version of the app and the demo slide could quickly outline what the buying process would look like.
This could be important in demonstrating your unique value proposition and showing the investor why the product differs from the competition.
You might have been selling your solution as revolutionary in changing how people sit at their desk with your posture-boosting product. With the demo slide, you could show an actual comparison to another posture-boosting product and demonstrate why your product works more efficiently.
The demo slide could also include actual user reviews – perhaps one of the biggest tech magazines has reviewed it with positive comments or a leading manufacturer wants to use your products.
The ability to mention things like this will again create that sense of urgency.
The investor will sit in his or her chair and think “Dammit, I better get in on this gravy train now!”
A good idea is to include a short presentation of your product – for example, in a video format.
The market analysis
While your problem and solution slides will undoubtedly feature information about the market – how big it is, what growth potential it offers and so on – you can dig deeper with a proper market analysis slide.
A good market analysis slide would provide information on:
The figures matter because you can’t just outline TAM to the investor. Knowing there are 120 million wine drinkers in the US won’t really say how big your market could be or how much money you will make.
In order to achieve TAM, each of those wine drinkers would have to use the app – it won’t happen.
Not even Google has TAM in search engines.
Now, SAM will provide you with a more realistic look at the market available for you.
In terms of the wine industry, your SAM might be the wine drinkers that are already buying wine online.
But, of course, not all the online users will start using your app. However, there will be a fraction of them that want to try it and perhaps even become long-term users. This is your SOM.
For the investor, all of them matter, of course.
SOM and SAM give a clear indication of the potential and an analysis of the returns you can make with your business model.
TAM, on the other hand, will provide a picture of the upside potential – the whole picture of what you could aim to work towards.
A big TAM indicates bigger growth potential.
Trends and future projections
Finally, you could include a slide on the trends and future projections available in the market and the industry in general.
A slide on what other companies are doing, information on recent growth figures in the market and even customer hopes for the sector can all deepen the investors understanding of the potential.
You could do this especially in terms of the vision and the future growth potential.
Let’s say my wine app’s vision is to bring quality wine on everyone’s table. I’ve also noticed the organic wine industry is growing fast and I could mention that as consumers are becoming more conscious about how the wine is made, my app would help them find a bigger selection of organic wines than your average retailer.
Indeed, talking about the future is a good way to add interest to your story and hook the investor further.
Your idea might be good right now but you can make the investor more excited by also mentioning these possibilities.
Where and how can your product or service develop in the future?
How can you guarantee the business is a success beyond the initial hype?
For instance, by adding new features to your wine app – making it possible to browse based on regions or adding in another drink such as craft beer to the product category.
Investors are always excited about growth.
By focusing on the future possibilities, you outline the potential for this growth.
For example, consider this simple, yet effective slide by MapMe:
Source: Pik To Chart website
It immediately sets out the trends by outlining communities that can benefit from the product – it shows the market potential of the startup in terms of what it could focus on in the future.
Capturing the investors’ imagination with your pitch deck
Now you have the building blocks of a great deck.
You’ve seen examples of the slides that work and why they work.
You are aware of the information investors want to see, why they want to see it and how you can convey it convincingly.
But how do you put these elements together?
What are the fundamentals of a winning pitch deck?
It’s time to pay attention to the finer details – combining your slides and the information about your startup with a good storytelling structure.
As I’ve outlined before, your pitch deck must tell a story – it must not be a list of figures and facts but an engaging journey down the path your startup is on – from the idea to the business.
So, you need to use the fundamental elements of a winning startup.
They immediately grab attention
A good movie, a good book and a good photograph or painting; they all have something in common: they grab attention.
It’s much less common to think a movie is stunning in the middle of it rather than at the beginning.
Heck, most of us don’t waste time watching a movie that doesn’t immediately make us go “Wow! What’ll happen next?”
Therefore, your startup must immediately catch the investor’s attention at the start of the pitch deck.
The first two slides are important.
If you don’t hook your investor into your story, you probably won’t win them over later down the line.
So, how do you start?
There are three great ways to start a pitch deck:
Now, one of the favourite examples of a good pitch deck that instantly makes you want to know more is a deck by Manpacks. The first slide looks like this:
Source: Slide Share presentation
Doesn’t it just want to make you know more?
And it worked, as the startup raised $500k with the startup pitch deck.
They tell a story
Pitch decks tell stories.
And stories often follow a specific structure, which you should use as the basis for your deck.
The winning storytelling formula comes in the form of Freytag’s Pyramid:
Source: The Editing Hart
So, what does it mean for your pitch deck?
Let’s look at the possibilities it offers in its purest form:
That’s the basic composition for a good story and a solid way of structuring your essential slides.
However, you can change the impact of your story focusing on how you tell the story, even if you don’t fundamentally change the structure of the slides.
Soren Petersen and Steven Bussard brought up two great examples of this in their blog post ‘Using Storytelling to Pitch Startups’.
They used the slides introduced by Guy Kawasaki and noted that by changing the structure slightly and focusing on how you engage the listener, you can create different types of stories.
First, you could tell an origin story – emphasising how things started with your startup. For this, you tell the pitch deck through a personal storyline. You outline the pitch deck like this:
- The problem (personal story of how the founders realised there is a problem)
- The competition and industry introduction (explaining a challenge in solving the problem)
- Introduction to the team (introduction to how other members were added to the team, how they helped solve the problem)
- Introduction to the solution (how the solution came about and what it does in terms of the unique value proposition)
- Remaining slides:
- The financials
- The business model
- Market analysis
- Future and trends
The emphasis is on how you discovered the problem, who you have part of the team to solve the problems and how the solution came about.
The other popular story option is to go for the visionary story. As an example, Petersen and Bussard mention the ‘Moon Speech’ President J. F. Kennedy gave in the early 60s.
The emphasis on this story is on the vision and the potential.
Your pitch deck could follow a structure like this:
- The vision slide (you explain what the ultimate goal and objective is)
- The market (the opportunity that allows you to dream this, who your customers are)
- Market validation/problem (what you are solving and why does it matter?)
- The solution (how you are going to achieve the vision)
- The business model/financials (you then move on to how you’ll make money, as it is big part of the visionary story)
- Remaining slides:
- The team
- The competition
- Future and trends
Now in terms of the storytelling model, you do need to constantly keep in mind how to tell the story in a way that investors feel they will benefit from listening.
Therefore, the problem-solution model can be too predictable and boring – investors see these pitch decks all the time.
You can mix this up by focusing on the problem first and then addressing competition – why is the competition not able to solve a specific problem?
By telling what competition is doing and why this is not the best way to go about it, you can introduce your solution.
You’ve not fundamentally made the story arch different, but you’ve made it a bit more exciting.
One of the decks that most captures the storytelling element in a crisp and visual way is the deck by Mixpanel. When you examine the story arch from the problem to solution and eventually the competition, you can understand why it made over $65 million in investments.
They are short and simple
Now the other thing to know about structuring a pitch deck is that it has to be short and simple.
The DocSend study found that investors look at pitch decks for just a bit under 4-minutes on average.
You can’t cram in too much information in just 4-minutes.
You need to keep it short and simple.
First, your investment pitch deck should not exceed 15 slides. Anything below 10 and you probably don’t have enough information.
So, aim to create 10 to 15 slides full of information.
When I say full, I don’t mean stuffed with facts and figures.
You need the slides to look clear and the information to be relevant.
Don’t try to add everything to the pitch deck – remember that you will be presenting it (in most cases) and you’ll have the opportunity to mention less relevant facts then if you must.
If you want a great example of a short and simple pitch deck, then check out Flowtab’s deck. This simple 10-slide pitch deck only adds information that is needed for a convincing investment pitch:
They are informative
You need crisp and current information.
You only include figures that are true or predictions, which make sense.
More importantly, you tailor the deck to the investor and the amount you are pitching. With this in mind, you aim to answer the questions the investor might have – what are they key things the investor wants to hear?
Every figure you mention, every chart you add should give more depth to your story. It should have a purpose.
Don’t include a cool statistic about organic wines if this has nothing to do with your startup – if you’re not planning to market there or if the figures aren’t part of your market.
One of the best lessons to learn about this comes from Aaron Pitman and Ryan Goldschmidt from RA Domain Capital and the Young Entrepreneurs Council, who wrote in a Forbes article:
“Making cautious or even negative projections shows investors you’re honest with them and also capable of being realistic about your project’s potential problems. Underpromising and over-delivering is your best bet, and an honest assessment of a project’s strengths and weaknesses is crucial.”
They have visual slides
Finally, your pitch deck should pay attention to the visuals.
This is not really an investor thing any more than it is a human thing.
Humans are visuals – 90% of information transmitted to the brain is due to visual cues.
Therefore, it’s important to add the most important elements in your startup story to the pitch deck rather than the pitch.
And in addition, make sure it is easy to take in this information.
Let’s look this up through an example from Crew’s investment pitch.
The website for freelancers in the creative mobile and web industry had a few versions of its pitch deck that eventually attracted $2 million in investment.
Now, here is the first draft slide explaining the market opportunity for the website:
It’s a lot of text and it’s not very appealing.
Yes, it’s a draft, but many startups actually end up sticking with text-only formats.
It’s not just that it has just text.
If you added that slide it would have too much information to go through at a glance. The font is too small and there’s nothing to draw attention.
However, look at the final version of the slide:
It’s visual – it’s simple and it is short.
It combines all the essential elements, while also detailing the market potential for the investor.
It immediately draws your attention to the shift that has happened – how freelancers are now majority rather than a minority.
At this point, it’s important to take a quick look at the importance of colour in terms of creating a pitch deck.
Think Outside the Slide has great presentation tips, especially when it comes to using colours.
The key takeaway from them is the colour chart they’ve devised on the emotional meaning of different colours and I’ve recreated it here:
Now, it’s important to recap one of the most crucial points about pitch decks here before I move on to looking at which structure to use at different stages of fundraising.
They also have some colour combination suggestions you might want to consider if you are having a hard time with the visuals of your pitch deck.
Your pitch deck doesn’t have to tell the whole story.
It doesn’t have to include every single piece of information about your startup – not all the tractions figures, the qualifications of your team or the functions of your product.
The main purpose of a pitch deck is to let the investor know that it has the potential to provide returns.
Investors want a return on their investment.
Your pitch deck has to show the exact reasons why this will happen when they invest in your business.
Nothing more and nothing less.
What startup pitch deck template to use at each stage of your business lifecycle?
Now, you should have the tools for structuring your pitch deck in the most effective way with the information I’ve just outlined.
However, there is one final aspect you need to keep in mind: the startup lifecycle.
Startups need investment at different stages of their journey.
This is because the journey is different depending on which part of it you are.
You initially need investment to start the whole damn process – money for building a prototype and perhaps even hiring a new person to your team.
But as your startup grows, your investment needs changes.
You start needing money for marketing the product to a wider audience or developing a new product altogether.
And just as your investment needs changes so does your pitch deck story.
Because your journey has progressed, your startup has progressed and you have different proof points to offer to your investment in terms of what they can get out the business.
All of this will change the way you should structure and present your pitch deck.
So, let’s look at the different fundraising cycles and their impact on the startup pitch deck.
Pre-seed and seed (raising $50k-$1m)
When you are starting out, you don’t have much proof in terms of the financials and customer traction.
These slides are not as important because they would be based on pure predictions.
Even your solution might be little hazy since you might be fundraising to get a proper product developed.
Instead, you want to focus on the problem and the opportunity.
Similar to the Airbnb deck, you should first paint a clear picture of the problem.
But immediately after, the focus should turn to the market size and the market validation – what is available out there for your startup.
For the investor, this is the time to see that you do have a big market opportunity – i.e. the investor can expect a return on the investment.
The other centre slide should be the one about your team.
Just like Airbnb did, don’t focus on things like academic achievements – hone in the entrepreneurialism of your team. Explain your qualifications in terms of providing the solution and being able to tap into the market potential you’ve just outlined.
The key is to explain why your team is the best to solve that problem and to deliver the idea.
As I mentioned earlier – remember that investors don’t just invest in ideas but people.
Series A (raising $1m-$5m)
Now, as you approach Series A, your startup has already started maturing.
You are raising the stakes – you’re trying to raise anything between $1m and $5, so we are talking about serious money here.
Therefore, your pitch deck has to move on just from being an exciting outline of a killer idea into a real business proposition.
While all the above slides should still feature on your pitch deck, Series A also requires you to focus on the finances.
You still won’t have a huge amount of financial results – what you should have is momentum.
You need to be able to show how you’ve started making revenue and more importantly how you have been able to grow.
Figures like traction, customer acquisition rate, increase in sales, your share of the market and so on are an important addition to your pitch deck.
You should also make predictions based on the metrics you have available.
Above all, at this point your business model – how will you make money? – will be of a crucial interest for the investor.
Since they are investing figures over $1m, they will want to know how you are planning to make money.
The story of the idea doesn’t stop mattering, but for VC at this stage, the key is to know whether your idea has defensibility against the other big market forces, whether you can penetrate the marker and how you are able to do it.
Series B (raising $5m-$20m)
The first two rounds mentioned above will still mean your business is relatively small and immature.
But your Series A round should have finally pushed your startup into the next level.
You should have real tangible growth to showcase for the initial investments. You ideally want to be showing how your business’ growth is outpacing the projections you made last round.
Now, the crucial difference from now on will be in the data-driven approach to structuring your deck. It’s rather hard to make a concept driven pitch at this point – although the LinkedIn team did manage to pull this through.
You will need to include a short introduction to your business in terms of the problems you want to solve and the product idea.
However, the focus will be on the metrics and the growth rate.
You should have more of the figures I mentioned above – sales figures, traction rates, customer acquisition numbers and so on.
Series C and beyond (raising +$20m)
Now, you might have another fundraising round before your startup faces two possible exit strategies: initial public offering (IPO) or acquisition or a merger.
Of course, you might move beyond Series C and have a Series D and so on. But these are very similar in terms of the pitch deck you need.
At this point, you are raising big bucks. We’re talking figures beyond $20m.
Again, the emphasis will be more and more on tangible performance.
Investors want to see what has happened in the past and more importantly, what happened to the money VCs have already injected in your company.
Your financial slides should focus on showing what investors have given, what you have done with the investment and how it has paid off.
This will help you show that investors can and HAVE made money with your startup.
Of course, your pitch deck should also focus a bit on the future in terms of why are you still seeking more money.
You need to show where the money is going to and why.
For example, perhaps you want to develop the product further based on customer feedback. It might be that you need investment to grow further afield – enter new markets, for instance.
If you can explain the potential for growth together with your previous record, you are guaranteed to get more money.
Now, the further your startup goes in terms of fundraising rounds, the importance of an exit strategy slide increases.
In Series D, E and F, you should show the investor how you are going to provide them with an exit – meaning are you planning for an IPO or perhaps considering a sale to a big market player.
The key to understand is that pitch decks are not all the same.
You can’t structure the pitch deck in one single way – your startup’s maturity changes, your journeys are different and therefore, the pitch decks are different.
Pitch deck structure is about storytelling and there are a few different tricks you can pull when it comes to creating the most effective stories.
The above should have given you the tools for structuring a winning pitch deck and an understanding of the different elements that make a pitch deck either a winner or a loser.
Now it’s just your turn to look at your startup and its journey and to start writing.
What do you think? What slide do you feel your startup would be able to nail down to a tee right from the start? Which one do you feel is the trickiest for startup and could you get away with surprising investors with something very different?
The whole process of pitching is a stressful occasion. But if you can create a solid structure with winning lines, your job gets easier.
To make you feel even better, let’s next turn attention to pitching live.