The goal of your investor pitch deck is to attract and keep the attention of potential investors and hopefully convince them to invest in your business. When you first begin to develop a pitch deck, you might be surprised to learn that the presentation matters as much as the content. You may have a fantastic business idea with a huge potential but if you don’t know how to present it effectively, you’re unlikely to get funding.
It’s important to remember that your pitch deck allows potential investors to evaluate not only your business idea and its viability but also your level of confidence, honesty and potential to carry out the plan of action you are asking them to fund.
Taking into account that only 15% of companies in each stage get acquired, you are undoubtedly facing a fierce competition.
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Your pitch deck should follow the basic rules of a good presentation. The best pitch decks are concise and informative, providing just enough information to potential investors to help them make a decision (hopefully in your favor). They tell a good story rather than bore the listener with charts and statistics. Needless to say, your pitch deck should have clear and crisp visuals. Don’t overload your slides with content. If you’re using PowerPoint, keep it simple, stay away from all of the bells and whistles. Better yet, use one of the PowerPoint alternatives to create your pitch presentation, or download a pitch deck template and redesign it to suit your company's needs. This LinkedIn article shares several great examples of successful pitch decks. Uber, Airbnb and WeWork have all made their first slide decks available on the web and are great pitch deck examples to follow.
Note: We actually re-created the Airbnb pitch deck, WeWork pitch deck and Buffer pitch deck for anyone that's interested. Download and customize your copy for free here.
Many professional speakers and presenters have their own set of rules and recommendations that can be applied to your pitch deck. For example, Silicon Valley A player Guy Kawasaki recommends that the best startup pitch deck presentations should have no more than 10 slides. Based on this rule, it's crucial to include the important slides and leave the rest behind (more on this below).
Your pitch deck should state the problem your target market is facing and explain your value proposition. It should clearly discuss your business model and state what makes you stand out from the competition.
The actual content you'll include in your investor deck will vary slightly depending on whether it's an angel, seed round, Series A, Series B or subsequent stages of venture capitalist fundraising. But regardless of your company's end goal, it's important to avoid common pitfalls that could easily make an otherwise great pitch deck sink. Here are five slides you should ditch in your next investor pitch deck.
#1: Don't talk about acquisition or potential buyers too early
Of course you have been testing different acquisition sources and tracking where your users are coming from. Obviously you want to demonstrate your ability to develop long-term customer acquisition strategies and highlight which channels do and don’t work, but the common mistake many presenters make is jumping into it too early. Make sure to describe the problem first and clearly outline your value proposition. If the investor is not convinced the problem is real and your solution is both feasible and timely, any customer acquisition success will seem circumstantial, and any long-term acquisition strategies you propose unrealistic.
#2: Don't worry about traction at the seed stage
Traction and product-market fit are two things that are often confused. Many companies have traction but very few have product-market fit. That’s because early traction can be a temporary or accidental success, often boosted by circumstances such as personal and industry connections of one of the founders.
On the other hand, if you manage to demonstrate that you’ve reached the stage of product-market fit, you’re showing that you’ve found your ideal target market and are developing the perfect solution to their problem.
To demonstrate proof of product-market fit, ask yourself the following questions (and make sure to include the answers in your presentation):
- Do your customers recommend your product to others?
- Do they bounce, and how often?
- What are the key metrics for customer success (aka conversion)?
#3: Don't talk about financial projections without having clear comps
Many start-up founders think that they need to be aggressive in their financial projections because investors will haircut their forecast. Sure, it’s true, they will haircut your forecast. But it still has to be realistic if you want to get any funding at all. Stating that your revenue will grow from zero to $100 million in the first two years is not realistic. Be optimistic but honest. Make sure to include your upcoming expenses as well as your projected cash flow.
As a rule of thumb, many growth-stage investors (Series B and beyond) follow the “The Rule of 40” to assess the growth of fast growing start-ups. According to this rule, the company’s combined growth rate and profit margin should be at least 40%.
#4: Don't ask for a specific sum of money
Likewise, when you ask for a specific sum of money be realistic and be willing to explain how the money is going to be used. Include answers to these questions in your presentation (or be prepared to elaborate): How much money would you like to raise? Why this amount? What exactly will you do with it and how long will it last? Be sure to mention any upcoming hires, or tools and services that you will need for your business to grow and run smoothly.
#5: Don't forget to mention the team
The team behind your start-up is the soul of the company. They are just as (if not more) important than your brilliant idea. A common mistake first time entrepreneurs often make is to stop after mentioning the founder and the co-founder.
Potential investors want to know not only about the founders of the company but about the team members, too. Explain what experience and skills they bring to the table, their motivation and enthusiasm, and why they’re a valuable asset to your company.
Talk about the members of your team and any anticipated additions down the road. Briefly add what each member brings to the table, to help move the vision forward and the company grow.