I’ve been on both sides of the proverbial table. I’ve had businesses pitched to me, and pitched VCs on why they should invest in my business. Whether or not you even get a seat at the table to pitch your startup face to face with a potential backer comes down to the strength of your pitch deck (also known as an investor deck). You send this to VCs and investors oftentimes before you ever meet them. It is a critical piece in closing the deal.
I’ve seen some amazing pitch decks and some very, very bad ones…
First, a pitch deck is meant to entice an investor so they want to learn more – that’s it. It’s not meant to close the deal by itself… YOU have to close the deal. VCs invest in people with good ideas. Neither is singular on its own.
So before going any further, remember that your pitch deck is not meant to tell the entire story, just the most important points. If an investor can’t peruse through it within 2-3 minutes, it’s just too long. There’s a good chance your prospective investor won’t look at your pitch deck while in the office – it’ll likely be when he is waiting for a flight or jumping in a taxi. Time is of the essence.
I had one entrepreneur send me a pitch deck that was 30 pages, double-sided with small print. It’s presumptuous to think an investor would ever read all of that. That deck found a home in a recycling bin somewhere…
VCs are busy, and if you can’t wet their appetite quickly, you’re done. Venture capitalists admire an entrepreneur who understands this and can succinctly put together his message in a brief and attractive manner. Akin to trying to get your first date with a woman, you are trying to simply get the investor to say ‘yes, okay, let’s meet at my office for the full pitch.’ That’s the purpose of a pitch deck.
With that in mind, and presuming you understand to include the features and benefits of your business in the deck, here are the five most important pieces to a great pitch deck:
1. First slide about your startup should document the problem you are going to solve.
2. No more than 150 words per page. Ideally 100.
3. Graphic timeline documenting what you have done over the past six months, and where you anticipate to be in the next six months. Show accomplished and planned milestones. This demonstrates to investors that in 6 months your company will be very different and likely have a higher valuation. If you don’t have much planned for the next six months, start a new business. The greatest enemy of a startup is time. Investors know this.
4. Size of the market you are going after, the players, and how you can garner market share – in other words, why you would be an attractive buyout for a major.
5. Three moments of validation: You need to show investors that you’re not blowing smoke. Explain three moments of validation for your company, whether that be a growth in sales, previous funding from a reputable investor and the attached valuation, technological validation from a university, government agency etc., joint venture with big company, testimonials… you get the idea. Assume the VC thinks you’re a liar. Prove to them why you’re the real deal.
(6. I know I said 5 keys, but this is important too… remember to have your pitch deck reviewed by at least three people outside of your company before presenting it. You need a first-timer perspective. Founders always run the risk of being too close to their company which can create complex messaging. Fresh eyes help simplify the pitch, and simplicity is key.)
Entrepreneurs in the startup stage, especially those seeking funding, spend a lot of time on their pitch deck. I’ve seen some work of art pitch decks, but more often than not, they oversell the story. Remember to hit on these 5 key features in your deck and understand it is simply meant to get you a seat at the table.
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