Welcome to a BetaKit weekly series designed to help startups and entrepreneurs. Each week, investors Roger Chabra and Katherine Hague tackle the tough questions facing founders today. Have a question you would like answered? Tweet them with the #askaninvestor hashtag, or email them here.
A pitch deck is one of the first documents a founder will create before they set out to fundraise. I was surprised to see that the dos and don’t of building your pitch deck (or “deck”) hadn’t yet been covered in the #AskAnInvestor series. In this week’s post, we’ll go through everything you should include in a pitch deck, slide by slide.
Before we get started, what exactly is a pitch deck?
An investor pitch deck is a 10 to 20 slide deck that covers the most important details about a company. Pitch decks are generally built in Keynote, Powerpoint, or Google Slides. Your deck will often be emailed around ahead of meetings, and will also be presented during investor meetings — the presentation of your pitch deck is generally what people refer to as “the pitch.”
Pitch decks help investors quickly get a bird’s’ eye view of a business. Even if you aren’t raising money, pitch decks can be a tool to help you describe your business to potential partners or advisors. Having a go-to pitch deck will save you from constantly rehashing your strategy over email, and the process of building the deck will help you hone a consistent message.
Most entrepreneurs have two versions of their deck. The one that they email around, and the one that they present in meetings. The version that gets emailed around may include a bit more explanatory text, and exclude any information the entrepreneur doesn’t want forwarded along.
DocSend and Point Drive are apps that have been growing in popularity among entrepreneurs for sharing their pitch deck with investors. Both allow you to send your deck as a link, rather than as an attachment, and provide interesting data on how people are interacting with your deck. It tells you who views your document, how long they view your document, and even lets you turn off access to a document after you’ve sent it.
Every deck will be a bit different, but most pitch decks will cover the same high-level topics. Storyboarding your slides prior to making them is a good way to ensure that you are covering all of the high-level points, while saving you time on revisions.
Everyone you ask will give you a slightly different outline for the ideal deck. But, here is my recommended outline for an 11-slide pitch deck, plus appendix.
1. Title Slide: The title slide should include your company logo, and a one-liner about what you do, your vision, what drives you as a business.
2. Problem: The problem slide tells a story, outlining the current pain in the market that you are solving. Use data to support how big this problem is, and the size of the business opportunity it presents.
3. Solution: The solution slide introduces how you are solving the problem and addressing the market need, effectively introducing your product. Talk about what makes you unique and where your insight comes from.
4. Demo: In the demo slide you want to show, not tell. Either jump over to a live product demo, or include a short embedded video (one minute or less) of how the product works. An embedded video avoids the chances of a broken demo and lets you control the narrative. If a live or video demo isn’t possible – well-designed screenshots are also good.
5. Team: This is where you introduce your team, but more importantly, this is where you tell investors why you are the best possible team to solve this problem. List relevant experience. Remember to use short phrases and recognizable companies and educational institutions where possible. Reference notable advisors or investors, if they are well-known.
6. Traction/Distribution: Show your metrics. Create awesome charts. Make the slide easy to scan. Even if your traction is early, investors want to back metric-driven founders.
7. Business model: How do you make money? Or how do you plan to make money? If you don’t have a plan, be ready to defend why not, and describe what other metrics matter for you right now. For most companies, ad revenue (unless you already have it) is not a good answer here.
8. Competition: Avoiding your competition does not help you in a pitch. Your investors will find out you have competitors. Prove that you know your competitors, their strengths and weaknesses, and your competitive advantage.
9. Roadmap/milestones: What’s next? What is your vision for the future? Good milestones are product launches, users, revenue. This is what your investors will measure you against in board meetings after you complete the raise.
10. The ask: What do you want from the investor? This is where you talk about your raise, how much you need, and what will you use it for. Product development? Sales? How does this raise fit into the milestones you just discussed?
11. Contact info: Include your name and contact info.
12. Appendix: The Appendix is where you will put all the additional slides you think might come up in a meeting. Don’t send your Appendix out over email. Anticipate questions investors might ask and create a slide to answer. The appendix will include topics such as financials, risks, legal status, past investors/advisors, IP, and most commonly requested metrics. Having a pre-prepared slide will make you look very professional and prepared.
While format is important, a great pitch is about much more than including the right slide headings. Here are some tips for creating a great pitch deck:
Use data
Investors love metrics-obsessed founders. Pull the investor into your story. Share your progress to date. Use numbers when discussing your traction, business model, and go-to-market strategy. Investors want to see how you think about your business; they want to wake up the next morning still thinking about it. A vague, high-level explanation isn’t going to pull anyone into your story.
Paint the big picture
A great founding team has a vision of what the world will look like three, five, 10 years from now. You may be talking about your company today, but your investors aren’t investing in today. They are investing in the future. Make sure investors come away from your pitch knowing the big picture for your business and how where you are today plays into that grander vision.
Put time into design
Beyond just content, the design of your deck is incredibly important. If you can’t build a beautiful user-friendly slide presentation, why should they believe you can build a great product? Once you’ve drafted the content for each slide, hire a designer to create your deck. Don’t have a designer on staff? Get someone you trust on contract or use an outsourced slide design service like Slidegenius, Eslide, Bright Carbon, Presentation Elevation, or Outsourced PPT — all of which specialize in designing slide decks. A beautiful slide deck is worth the investment.
Don’t list a valuation
It’s important to note that while a deck may mention how much a company is raising, it should not mention the valuation. Particularly in a priced round raise, as a negotiation tactic, you don’t want to give the first valuation number. Only start mentioning valuation early if the round is already partially raised and the terms are locked.
Don’t include everything
The goal of a pitch deck is to peak interest, get investors excited, and kick off a conversation. It’s more important that your pitch deck covers the parts of the company that get you the most excited than it is to touch on every topic. Even the most introverted founders come to life when talking about what excites them about their business.
Don’t be unrealistic
Investors have a pretty good bullshit meter after seeing hundreds, if not thousands of pitches. Don’t pitch unrealistic growth. Yes, you want to be ambitious, but you also need investors to buy in. Your vision and your projections need to be believable. You need to get everyone in the room nodding along, not leaning back skeptically.
Iterate
Finally, it’s important to understand that your first pitch deck will not be perfect. Treat the pitch like a product, iterate on it until it is great. Your pitch deck will evolve. Make note of how investors react to each slide. Internalize the feedback and questions you get in investor presentations and continuously improve your deck and your presentation down to every word you say.
This post includes excerpts from Katherine Hague’s book “Funded: The Entrepreneur’s Guide to Raising Your First Round”. For more on this topic, or to learn more about the book, visit TheEntrepreneursGuide.com
Roger’s take:
From a VC’s perspective, it’s essential to have a great pitch deck. It is, absolutely, a key tool to a successful fundraise. However, don’t be chained to your deck when you are in a meeting. Remember that VCs see many slide decks every day. Resist the temptation to just jump right into your deck and navigate slide by slide. You need to differentiate.
The point of your first fundraise meeting should be to tell a story and whet the appetite of the investor you are pitching. You want them leaving the room and salivating for more. You want them chasing you in the fear that they will lose the deal to another investor.
Display your knowledge about the investor’s prior investments/portfolio and connect it to those in your business and how you might be a good fit.
Too often, I see entrepreneurs rely solely on their pitch deck to tell a story. This is a mistake. You need to connect emotionally with the investor. At the Seed and Series A stage, there is often little data attached to a company. An investor will rely heavily on the intangibles they deduce from their time spent with you and your team — things that can’t come across in a slide deck. They need to have conviction that you are the right team focused on the right market, and that you have the chops to build and scale the right product. Tell a story that highlights this.
If you have a prior relationship with the VC you are pitching (always important) and/or you have done your homework on that investor, you should have lots to talk about to kick off a meeting. Perhaps start with telling a story about how you and your founders got passionate about the business you are pitching. Talk about your prior experience and your “aha” moment which led to the creation of your business.
Mention your unique experience that situates you and your team to be the best people around to build this type of business. Display your knowledge about the investor’s prior investments/portfolio and connect it those to your business and how you might be a good fit. Talk about some common entrepreneurs you are both connected to and have had good experiences with in the past. Take investors through your story before you lead them into a story about your business.
Once you establish a connection and lay out context, you’re on good ground to proceed into your pitch deck. However, don’t be afraid to go off script. The investor may want to jump into a product demo right away (in fact, you should do your homework on whether an investor prefers demos over decks). Or jump to a certain slide in your deck, skipping over a few slides. VCs are notorious for jumping around in conversations; don’t fret, go with the flow. It’s a mistake to just force a conversation by continually hitting the down arrow on your keyboard and going slide by slide.
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Photo via Bplans