Pitch Deck for Venture Capital

What do the most influential investors look for in a startup before they make their investment decisions?

Raising capital from investors is difficult and time-consuming. For a startup looking to raise funding, it must create, through a pitch deck, a compelling case for attracting investment in the opportunity, the product, and the team.

Source: Unsplash

What is a pitch deck?

The pitch deck serves as your calling card, a persuasive statement about the opportunity you've identified. Investors will review your pitch deck before agreeing to meet with you.

Creating a pitch deck is essentially a communication exercise. The pitch deck informs potential investors about your company's overview and critical market information. It describes the problem being solved, the size of the market, the size of the competition, growth models, and the founding team's ability to capitalize on the opportunity. The goal of a pitch deck is to present a compelling, concise, and credible reason for potential investors to invest in your company (the investment opportunity).

Preparing a compelling pitch deck is a critical step in the fundraising process. Because the company is still in its early stages and the business idea is unproven, the pitch deck is especially important for startups seeking funding.

There is no one-size-fits-all VC pitch deck template for developing a winning pitch. There is no template that can guarantee you a term sheet. However, understanding what goes into the best pitch decks - what is essential and what should be left out - aids in effectively communicating the proposal and increases the chances of attracting investors. The pitch deck should pique the investor's interest in the business idea and serve as a springboard to securing follow-up meetings for more in-depth discussions.

Creating a Winning Pitch Deck

• Although there is no perfect pitch deck template, winning VC fund pitch decks that effectively communicate the startup's business proposal include a few key components that help convey the startup's idea. The best decks demonstrate, through their structured narrative, that the founder(s) have given careful consideration to all important aspects of the business.
• A Captivating Story: The best decks have a well-thought-out proposal. It is worthwhile to invest time and effort in distilling the essence of the venture and its impact into a succinct message.
• Clear Product Description: Although it may appear simple, many founders struggle to describe their products in simple terms. Even someone from outside the company should be able to tell what the company does just by reading the pitch deck. A slide in Airbnb's pitch deck said, "Book rooms with locals, rather than hotels" - a concise and clear product description.
• Showing vs. Telling A working product/prototype is preferable to a detailed description of the product. The most compelling pitch deck is a product demo. However, if a product demonstration is not possible, the pitch deck should capture the essence of what the product does.
• Identify the Market: Most startups like to claim in their pitch that their product will address a billion-dollar or larger market. Regardless of market size, investors should be able to see the extent of thought that has gone into understanding the opportunity from the pitch deck.
• Omnipotence claims: To make a good impression, avoid exaggerating your product's strengths and undermining the competition. Highlight the product's strengths or the one-of-a-kind approach that gives it an advantage. Investors are not impressed by claims of omnipotence. What impresses investors is evidence that you have studied the competition and devised a strategy to gain an advantage. Balancing enthusiasm with reality is the best approach - experienced investors can see through over-inflated claims.
• Team Strength: The narrative in the deck must persuade investors that the founding team can execute and realize the startup's stated vision. It is beneficial to highlight the professional backgrounds and accomplishments of the team's members. LinkedIn's pitch deck included a slide highlighting the founding team's entrepreneurial experience, technical expertise, and social networking knowledge. It is critical to capture the attention of investors with the product, opportunity, and team.
• Excellent vs. Perfect: It's ironic, but a pitch deck with an overly slick design and a high production value can sometimes be perceived as an attempt to distract. A perfect pitch deck can sometimes raise red flags for investors as well. This is not to say that shoddy work is acceptable, but a minor flaw in the pitch deck can make it more realistic. However, while form is important, substance is even more crucial.
• Understanding the Investors: Everyone only has a limited amount of time and energy to pitch for funding. It is critical to find the right investors to pitch to. To identify the right investors to pitch to, research their areas of interest, investment theses, investment size, investment portfolio, and so on. Although it may appear trivial, it is also critical to research how the target investors interact with founders and their personalities.

The Pitch Deck - Key Slides

Despite the fact that each business is unique, good pitch decks include some essential information that is shared by all businesses. As previously stated, the goal of the pitch deck is to pique investors' interest in order to secure a follow-up meeting. The inclusion of the following critical information increases the likelihood of eliciting investor interest.

• Company Overview: This is essentially a 4-6 bullet point summary of the business idea, the problem it solves, management team details, and traction already achieved. The overview should pique the interest of investors in order to persuade them of the company's ability to capitalize on the opportunity.
• Company Include a brief statement about the company's mission and vision. This section of the pitch deck functions as a compelling 30-second elevator pitch for the company.
• The Team: For most investors, the company's team is the most important factor in making an investment decision. Team members' educational and professional backgrounds, as well as domain experience, must be disclosed. Details about the company's advisors/consultants/board members are also important.
• Statement of 'Problem': This section defines the problem or need that the startup intends to solve/address. The size of the problem, its significance, who is affected by the problem/solution, and target customers should all be included in the details.
• 'Solution': The solution to the identified problem is articulated in this section of the pitch deck. The deck also explains why the startup's solution is superior to the alternatives available to consumers. The 'solution' and 'product' sections of the deck complement one another.
• The Product: This section articulates the features of the product/service and highlights the unique/distinguishing characteristics. The product section answers some questions, such as why users should be interested in the product, what the major planned milestones are, what additional features are planned, and so on.
• Market Opportunity: Investors seek opportunities with large addressable markets. It should define the market, the size of the market, and how the startup intends to serve and grow in the market.
• Customers: It is beneficial to include information about the company's early customers. These particulars lend credibility to the pitch. It is customary (almost cliched) for startups to display the logos of their larger and more well-known clients.
• Technology: Investors are always (understandably) interested in the underlying technology of the product, whether it is already available or in development. This section is used to describe the technology in detail, the intellectual property rights owned, the edge (if any) provided by the technology, and why the competition will find it difficult to replicate the technology.
• The Competition: Investors like to know who their competitors are. Details of the competitive landscape to be monitored include factors such as distinguishing features and competitive advantage. The startup's understanding of the competitive landscape signals to investors the company's understanding of the market.
• Early traction is viewed favorably by investors. Traction is defined as sales, website traffic, app downloads, press coverage, and customer testimonials. Strategic partnerships have been completed, and plans for sustaining/accelerating traction are also being developed.
• Business Model: The startup's business model explains and details how the company makes money, its pricing model, the long-term value of customers, and the customer acquisition channels and costs.
• Marketing Plan: In order to attract customers/users, even the best products require a good marketing plan. The plan should include specifics about key marketing channels (paid search, social media, email marketing, PR plan, PR agency, etc.). The marketing plan also includes an analysis of early successes, marketing channels that worked, per customer acquisition cost, expected customer lifetime value, and so on. Investors are also interested in learning whether there has been any early press coverage.
• Financials: To pique the interest of investors, the founders must provide details about the company's current financial situation and proposed future burn rate. The financial details also include short- and long-term financial projections, unit economics, recurring revenue, working capital requirements, total revenue/expenses, EBITDA, and assumptions (if any). Realistic projections are required. Unrealistic projections have a negative impact on the startup's overall credibility.
• The 'Ask': The all-important 'Ask' is usually the deck's final slide. The 'ask' specifies the amount of investment sought, the duration of the financing, major milestones to be achieved with the funding, and the intended use of the funds (new hires/product development/marketing, for example). Details about existing investors (particularly established investors) help to strengthen the pitch.

Venture Capital Pitch Deck Templates

It is a good idea to look at some well-known and successful VC pitch deck examples before you finalize your pitch deck. Its purpose is to ensure that your pitch contains all of the necessary information and makes a compelling case for your startup's business idea. The pitch deck examples provided below are just a few of the numerous options available.

The Venture capital pitch deck examples provided are only meant to help you understand the essential information that investors expect to see in a pitch deck. Remember, there is no such thing as an "ideal" pitch deck. Opinions on what constitutes a good pitch deck differ. Some viewpoints may appear to be contradictory. As a startup founder, you need to craft your final pitch deck tailored to the unique features and requirements that best characterize your business idea and funding need.

Summing it up

A strong pitch deck can significantly increase your chances of attracting investors and obtaining funding. The pitch deck's narrative must be interesting and compelling in order to achieve this. The pitch deck must include all relevant topics to your business that investors expect to see.

Even in the absence of an accompanying presentation, the pitch deck should be able to convey the essence of your startup's business idea. The goal of the founder's presentation should be to supplement the pitch deck only. Investors frequently request a copy of the pitch deck in order to review it again and discuss it with their internal investment teams. Even if the founder is not present, the pitch deck should contain a compelling enough narrative.

Source: abstractops.com