Let’s pretend you know how to put together a compelling investor pitch deck and you are on your way to raise $10mil for your great idea and you don’t need objective guidance or experienced insight. You can stop reading here, because you know it all. But, if you are looking for a rainmaker guide to raising capital, this resident serial entrepreneur tells all. Right here.
For those whose job includes providing guidance to startup companies or for those on the receiving end of funding solicitations, you will likely concur with me when lamenting about the thousands of half-baked business plan packages that are disorganized to the point of appearing dyslexic. Worse still (for the aspiring entrepreneur seeking to raise capital), many of those packages are incomplete, as they lack a properly configured investor presentation deck; the collateral material used to re-purpose the 90-second elevator pitch and frame the investment opportunity in a short-form presentation comprised of 12-15 PowerPoint-powered slides.
Yes, we all hate PowerPoint–but it is a tool that investors are comfortable with.
And, while on the topic of addressing the needs of investors and/or customers, let’s never forget the most important component of selling an idea, a product or a service: It’s not what you say, it’s what your audience hears. The first step to engaging an audience is establishing trust-but that’s a topic for a separate dissertation.
Yes, it is hard to appreciate that some of the seemingly smartest entrepreneurs struggle with the most important aspect of scaling a business and getting to the next lever: raising capital from investors to fund fast growth or to underwrite a strategic acquisition. The reasons why so-called savvy entrepreneurs are so challenged when it comes to properly presenting their value proposition to investors requires too lengthy an explanation for the purposes of this posit. The fact is, many people with very solid business ideas, whether tech wonks or fast talking salespeople who are great at relationships building, but not programmed to be creative writers and can’t cross the finish line with a completed A Round or a follow-on financing away from first round funding provided by friends and family members . A shame for them, but an opportunity for entrepreneurs to work with experienced writers who are fluent in pitch deck presentations and serve folks who know what they know and can acknowledge what they are not good at; true leadership qualifications.
How to Prepare a Investor Pitch Deck : Winning Presentations Require Best Practices
Whether you are a startup seeking first or second round funding, or an established company that is seeking institutional investors, a pitch deck is the vehicle by which you present your company to private equity and venture capital firms as well as angel investors. A proper investor pitch deck is generally created using Power Point (a favorite format on the part of professional investors) and it is a presentation that requires no more than four minutes to review by the targeted audience. Generally, the presentation is confined to no more than 15- 20 slides that effectively highlight the company’s opportunity, its technology and/or other unique value propositions, management team expertise, sales projections and how investors can expect to recoup their investment and recognize a profit. A good pitch deck tells a compelling story that excites viewers. A bad deck wastes everyone’s time.
Most professional investors will acknowledge that Step 1 is a compelling elevator pitch; a verbal presentation that is limited to 90 seconds and frames the value proposition and the ‘ask’. If your elevator pitch landed on the right floor, Step 2 is the investor pitch deck.
The first slide should include three to eight bullets that emphasize the size of the market opportunity and your strategy for exploiting it. You want to convince potential investors that you are presenting a massively valuable investment thesis which will benefit investors significantly. Naturally, interesting images and graphics are a plus to hold the audience’s attention, and you’ll want to use a consistent font size, color and heading style throughout. Remember to put a copyright notice on the bottom of the cover page.
Pitch Deck Best Practices
Here is an outline for a 15-slide deck that you we use as the starting point for clients’ preparation:
Big Picture Overview
How Big Is the Opportunity?
What Problem Are You Solving?
How Are You Solving It?
What Is Your Product/Service?
Who Will Be Your Customers?
What Technology (if any) Will You Use?
Management Team and Prior Investors
Who Is Already Competing in a Similar Space?
What Gives Your Idea Traction?
How Will Your Business Work (Business Model)?
How Will You Market Your Offering?
What Are the Financials?
What Are You Asking For?
Address each topic crisply, without too much wordiness. Add an important stat every now and then to reinforce your points. But most of all, shape your presentation to your audience and confront potential problems head-on. Your audience will enter with concerns – let them know you understand these concerns from the start and they’ll pay closer attention. If you are an early-stage startup, show your audience that you have a well-conceived path and the right vision.
Tips and Tricks For Preparing a Proper Investor Pitch Deck
There are several Do’s and Don’ts you’ll want to consider when composing your pitch deck.
DO pitch by analogy, tying your business and technology to other successful businesses
DO decide whether to drive your pitch by concept or by data, whichever applies most directly
DO proactively confront risks with mitigating strategies that help to build confidence
DO dwell on your competitive advantage, what will give you traction to survive and grow in the market, what makes you unique and maneuverable
DO show in detail how you will attack competitor’s revenue streams
DON’T use more than 20 slides, and keep them from being wordy
DON’T overwhelm with financial data – save for follow-up
DON’T look to cover everything in the deck – you can flesh out items in subsequent Q&A
DON’T use jargon or obscure acronyms
DON’T belittle the competition
DON’T use old data that makes your deck look dated
DON’T economize by doing your own graphics – use a graphic designer
It is easy to opine about ‘do this, don’t do that’ when offering pro bono guidance to those who need objective insight. However, this seasoned pitcher (and catcher of pitches) knows it is not always easy to be a good student who ‘gets it’ and can actually follow the instructions provided. Writing a good pitch deck requires objectivity, creative writing talent and the ability to frame your vision into a compelling document.
Rainmaker Guide to Raising Capital; Serial Entrepreneur Tells All