Well, it’s that time. You’ve finally decided to seek investment for your startup.
Bootstrapping may have brought you to where you are today, but you’re now looking for the extra push investment can provide to help catapult your startup into a thriving, growth-focused company.
Or, maybe you’re preparing to pitch your business or idea at an upcoming pitch competition.
Whatever the reason may be, you realize you need a pitch deck — but where do you start?
A pitch deck is an important tool for conveying the “ins and outs” of your business. Every business needs one, but creating an effective deck can be a challenge even for seasoned entrepreneurs. Knowing what to include and, more importantly, what not to include is key to securing your next round of investment or winning first place at your next competition.
Whether you are crafting a three-minute or 20-minute pitch, how you assemble your pitch deck can make or break your presentation.
DocSend — a startup focused on secure file sharing — partnered with Harvard Business School professor Tom Eisenmann to study more than 200 pitch decks to find out the secret sauce of creating the perfect deck.
During their research, they discovered that investors don’t spend much time looking at pitch decks — on average, only three minutes and 44 seconds. Not much time, right? So what do you include?
Creating a pitch deck for a venture capitalist will likely differ from one you create for a pitch competition. It’s all about knowing your audience. Regardless of who you’re pitching to, here are some key slides you’ll want to include in any pitch deck you create.
This will be one of the most important slides you include. The better you are at educating your audience about the problem your customers face, the more successful you’ll be at convincing them your product or service is the right solution.
According to Alex Chuang’s article on Startup Grind, these are the questions you’ll want to cover:
- What is the problem?
- How do you know if it’s a problem? Do you have primary or secondary research to back this up?
- Who are you solving this problem for?
Now that you’ve outlined the problem, you must address the solution. Here is where you discuss how your business will differentiate from existing solutions.
Chuang also suggests answering these questions on your solution slide:
- What are some of the alternative solutions that people are using today? Why are they not working out for them?
- What is your solution?
- How is your solution better than the alternative solutions? Is there anything proprietary or unique?
Now that you’ve explained the solution, it’s time to show what your product can do. Provide a brief demo and show some screenshots of your product in action.
When demonstrating your market size, avoid claims that promise high returns on billion dollar markets. Even if your market value is in the billions, startups rarely capture enough of the market to generate this type of return on investment.
Instead, this slide of your pitch deck should cover key metrics like:
- Total Available Market (TAM), or the total market demand for a product or service;
- Serviceable Available Market (SAM), which is the segment of the TAM that your product or services targets in your geographical reach; and your
- Serviceable Obtainable Market (SOM), or the portion of your SAM that you can capture.
Every business has competition. Even the most proprietary of technologies compete against “old ways of doing things.” If you omit this slide because your business or idea has “no competition”, be prepared to face fierce criticism from skeptical investors.
Consider making a chart to show a feature comparison between you and your competitors, but make sure to put your product at the top! This will help your audience quickly understand your business’s competitive landscape.
Your startup’s team can be a deciding factor in whether someone invests in your company. Many investors will choose to invest in a business based on the team, not necessarily the idea. Don’t worry if your startup team is missing some expertise – you’re not alone! This slide is where you’ll want to highlight any team achievements. Be sure to recognize any gaps in your team and understand how you will address these gaps if asked.
The Traction to Date and Milestones
Investors and pitch competition judges want to see proof that you’ve validated your idea. Here is where you’ll want to mention whether you have any paying customers, if you’re generating revenue, or if you’ve secured any key partnerships.
The Business/Revenue Model
This slide is your opportunity to show your audience you have a business model that works. Be sure to explain how your business makes money and whether you’ve validated your business model through experiments or case studies.
If you haven’t covered the financials of your business yet, this slide is your chance to discuss things like the customer acquisition cost (CAC), the lifetime value (LTV) of customers, and if you’re a SaaS company, you’ll also want to include monthly recurring revenue (MRR).
Now that you have the basics covered, you’ll want to experiment to create a pitch deck that works best for your needs. Remember, not every pitch requires the same slides. You’ll want to iterate on your deck and create multiple versions for different purposes and audiences.
Ready to put your pitch deck to the test? Apply to pitch at our next pitch competition by November 17 for the opportunity to practice your pitch, receive feedback from peers and industry professionals, and win some great prizes.
Here are some pitch decks from top technology companies to inspire you: https://attach.io/startup-pitch-decks/
Also published on Medium.