Investors Look for These 5 Critical Keys in Your Pitch Deck
You only get one chance to make a first impression. For many founders, a pitch deck is that first impression — who knew that you would really need to sharpen your PowerPoint skills as an entrepreneur? The reality is that investors rely heavily on a founder’s pitch deck to decide whether to move forward with further discussions.
I’ve had the opportunity to review hundreds of pitch decks from all types of businesses. The ones that stand out from the rest have these five critical components included:
- An identifiable problem you’re solving
- A solid understanding of your target customer
- A clear description of your traction to date
- A defined ask and plan for next steps
- A compelling story of your company’s journey
1) Identifiable Problem
There’s a reason why you’ve created your business and jumped into entrepreneurship: You’ve identified a problem that needs solving. What you’ll need to convey to investors is why this problem is 1) a large enough problem to solve and 2) a problem (monetarily) worth solving.
This requires both quantitative research of the way things currently stand and qualitative customer research that you’ve conducted to show that there’s a demand for a solution.
2) Understanding of Your Customer
I can’t say it enough: As the founder, you need to be an expert in knowing your customer and your market. You will definitely be asked who your target customer is, and if your answer is “everyone,” then we immediately know you haven’t dug deep enough. As investors, we need to trust that you know who your customer is, what they’re motivated by, and why they’ll be loyal fans of your product or service.
3) Clear Traction
Traction is one of the most important parts of your pitch deck. Why? Venture capital firms rarely invest in great ideas alone — they invest in great businesses that support those ideas. With that said, you need to show tangible momentum that shows potential for future success. That doesn’t necessarily mean you need significant sales (though that wouldn’t hurt). Some other ways of showing traction: a large community of potential customers that you’ve grown organically or demand generation through pre-orders.
4) Defined Ask for Investors
At the end of the day, you’re pitching your business for outside investment. Venture capitalists want to know how much you need, and why you need it. How will you use the influx of money, and how will it lead to a favorable return on investment for you and your investors? Be clear about your next steps — even better if you’ve done the homework to know exactly where to allocate the money. If you’ve done a great job of the points above, your ask should be justifiable.
5) Compelling Story
Your pitch deck is the place to communicate that you’ve identified an important problem, there’s a clear market for your solution, and you’ve gained some momentum for the demand of your business. The problem with a lot of pitch decks, though, is that they get lost in the storytelling.
The reality is that your pitch deck is one in many that investors review. The story you tell is what makes your pitch memorable. Some founders get too caught up in sharing facts without a story (boring and forgettable), or too much story without quantifiable traction (unfocused and unreliable). How did your business grow from an idea to a product/service people can’t live without? How are you breaking the status quo? That’s what we want to hear about.
VCs invest in founders that they trust because of the fascinating story the founders have shared in their pitch. Include these five areas in your pitch deck to keep your pitch on track and ready for primetime.
