It’s a known fact that most start-ups struggle with funds throughout and most of them end up being shut down due to their financial instability? And, in case you are someone planning to raise money for your start-up you may have heard plenty of times, that having a perfect pitch deck is the first step towards getting a good deal from the investors. Though only a pitch deck might not be an alternative for a good product, having a perfect pitch deck could make the first impression among investors. And, getting investment at an early stage might make all the difference for the growth of your start-up.
But, what is a pitch deck? Also known as a slide deck or start-up deck, is a presentation that offers a brief but informative overview of your business covering business aspects like key points of your business plan, the products and services you provide, high-level financial projections, funding needs, etc. A pitch deck also acts as a written investment proposal typically in the form of a slide presentation with all key business details presented in a short concise visually appealing manner with an intent to solicit investment from a prospective angel or venture capital investor.
Since, raising funds from investors is never easy and may require a lot of time and effort on the part of the founders to raise funds from investors, having a flawless pitch deck gets potential investors excited about your idea and engages them in a conversation about your business hopefully leading to an investment.
What are the benefits of building a creating pitch deck?
A Key tool to get Investment
Undoubtedly, having a well-polished deck in place with all the required information such as the team involved, the product being offered, the research involved, market prospects & the innovation brought by the start-up could encourage investors to participate in the process and close the deal with a favorable outcome.
Garnering Interest among people
Focusing on the design and the clarity to communicate your unique value proposition and market potential allows you to generate more interest among managers, executives, and investors. Founders can also share the presentation with others to take new insights into how they perceive your business idea. Understanding their opinion could help you to improve your products or make them more appealing to business customers.
Creates Brand Awareness
For most early-stage start-ups, the primary focus remains on building the brand and creating public awareness around the same. With a powerful pitch deck, investors might help you gain even more publicity through their words of mouth references to other noteworthy people & businesses further helping your start-up to gain more clients and business partners as a result of brand awareness.
Communicates a stronger message
A start-up deck may also help you to communicate your business idea clearly and concisely. An impressive pitch deck also acts as the primary foundation for business marketing materials such as social media advertisements, corporate videos, or start-up founder’s profiles to attract wider audiences.
Helps to attract co-founders or partners
Being the founder of a start-up, you may have a great business idea with a high potential to scale, but can you do it all alone? Thus, having expert people in your team who could either join you as a strategic business partner or even as a co-founder could help you reach higher growth sooner. However, you need to persuade such a person about the viability of your business for which there cannot be anything better than pitching a pitch deck.
How to create a strong pitch deck for your start-up?
Typically, private equity investors go through hundreds of pitch decks regularly, and may not give more than 5 mins to any particular pitch deck to decide whether or not they want to meet any particular entrepreneur or founder of the start-up. However, a creative, short but, engaging, and well-positioned pitch deck could spark interest to can spark interest enough to begin a conversation and secure the funding and future for your start-up.Here are some elements you can include in your pitch deck to make it informative yet impressive-
Elements of Pitch deck
Usually, a great way to start a pitch deck is by giving a brief overview that states about the start-up, the unique value proposition of your product, or defining your project or business idea. It may also include an image/ or logo of the start-up company and use blank space on the slide to attract attention to your statement. You can also consider using simple, large fonts, and colors that make your statement clear and legible. Additionally, tech-focused businesses also prefer to add a value proposition statement in the first slide.
The problem& Solution
In the next slide, you may want to include the problems/issues in the existent industry/market including the instances where you discovered the problems with supporting facts. Further, you will need to demonstrate how your product or services could be a revolution in the existing industry or market. To support your statement you could also share information related to competitors’ products or their hypothetical solutions, including the improvement areas and success rates using different data sets.
Market opportunities Involved
Next, it would be beneficial to add details related to the market opportunities associated with reasonable data to suggest that there is a need for a solution to this problem. You can also consider creating a chart or graphic that could help you to illustrate the need for your product in the existing market. In case the product is B2B focused you may also show how many businesses lose due to the problem and reiterate the reason for a solution.
Product/Services being offered
It would also be beneficial for you to add a slide that presents the innovative products/services to be launched by your business and how they stand out among the existing competitors in the market with the help of well-researched and detailed information about your idea. However, in case the products are underdeveloped, you can state your product’s stage while including sketches of how it would look in the final stage.
Business Model or Revenue Model
Once you are done with the presentation of products or services being offered by your start-up, the investors would like to know answers to questions like who are the target customers. What are the revenue prospects for the start-up business? What are the major business costs or expenses or who pays the bills? The answers may vary for every business, as for certain businesses like content platforms instead of customer advertisers pay the bills. It could also be helpful to include a slide that explains the competitive landscape and the reasonable pricing which fits in the larger market.
Traction and Validation
Apart from other things, investors would also like to know if the start-up has proven any aspect of its business model or has any proof which authenticates that the solutions being offered by the start-up to solve the problem so identified are extremely great. Here you may add points such as-
- Having sales or early adopters using your product, or
- Major milestones achieved
- Measures you are planning to initiate or have initiated already.
Team Composition & Expertise
Once you have laid down all the details related to the products/services, you might need to highlight the details related to the key team members of your start-up with a short biography along with their accomplishments in brief words. You may also share how their expertise could be helpful for the products/services being offered including how could they add value to the start-up. In case your start-up has little experience, you may use the resumes of your team members to demonstrate their knowledge and expertise.
Marketing & Sales Strategies
Finding & winning customers is a key challenge faced by many start-ups. Despite how good or innovative your product is, you need to have a good marketing and sales strategy in place to reach profitability and investors want to know how are you planning to do it. Thus, whenever you are creating a pitch deck consider adding a slide that explains your sales & marketing plans i.e. the key tactics that you intend to use to get your product in front of prospective customers.
Thus, it’s important to demonstrate a solid grasp of your reach to the target market and the sales channel you plan on using for your products. If your marketing & sales strategy is different from your competitors you could highlight it in the slide.
Competition & Value
Every business faces competition in one way or the other. Even in a case where you are opening up to an entirely new market, it is important to note that your potential customers are using alternative solutions to solve their problems today. Thus, try to explain how you fit into the competitive landscape and how you differ from your existing alternatives in the market. For supporting your statement try to include examples about your competitors through examples of their products/services and pointing out their flaws/opportunities by using data and research or what are the key advantages your start-up has over its competitors and the reason consumers may prefer you over others.
Financials
After you have pointed out all other details, investors will always look forward to the financial details such as sales forecasts, profit & loss statements, cash flow statement forecasts, etc. during the pitch deck presentation. However, if the information offered is inadequate or too deep they may find it harder to assess or even to reach a final decision, so try to balance the amount of financial information to be offered through the presentation. Also, since investors get to see “hockey stick” projections all the time, they might cut your valuations or projections in half, thus it is
Extremely necessary to discuss the business growth based on real growth factors or make comparisons only to a similar business in the industry.
Investment and Use of Funds
Now, it’s time to discuss the number of investments required by your start-up to reach your goals, the amounts raised by your start-up in the past, and the purpose of raising the funds. The pitch deck should clearly explain the reason for requiring money from investors and how it will be used along with estimated returns and revenues as investors would want to know how the investments would be used and how will it help you achieve the goals you are setting out for your business. It will be a good idea to include financial models that show how your start-up will operate after funding with reasonable graphics.
Exit strategy
If the investors have agreed to invest in your start-up, they would also expect to be clear on a neat exit strategy for both parties including a timeline for when they could expect to see a return on their investment. It is a good idea to include timelines and a range of forecast returns as a founder you expect to receive for your start-up.
Take Away…
Therefore, it is important to understand that funding commitments are one of the toughest decisions to be made while tapping into emotion and gut feelings like any other financial analysis. Whenever investors make any funding commitment they do so with utmost
belief and trust in the visions of the start-up founders & their team that they will pass through all struggles and offer incredible value to their investors. However, for them to believe in your visions there should be an incredible story to be told in such a compelling manner to earn their conviction incredibly.
Generally, most of the pitch decks built are so repetitive it fails to make any long-lasting impression on the investors who go through a variety of the same kind of content regularly. Thus, it is necessary to create a presentation with a certain amount of creativity to make it more appealing, engaging, and memorable to them.At the same time, make sure you’re equipped with the right amount of data and insights you’ll ever need to answer the questions your presentation will generate.
Though there is no such thing as a perfect or universal pitch deck that could work for any start-up, adding important points could help you capture the essence of your company’s unique story while persuading investors could help you see it through to the end.
