Crafting a Compelling Business Model Slide: Show Us How You’ll Make Money
Spoiler Alert! Companies need to make money!
So let’s keep rolling with our deep dive into the key slides of a seed stage pitch deck. In today’s post, I’m going to dig into the business model slide — a slide that can seem simple and obvious but is still missing in many cases or often doesn’t hit the mark.
So, what exactly should you include in this slide at the seed stage? Let’s break it down.
The Basics: What’s Your Revenue Model?
First things first: we want to know how you’re planning to make money. Are you a SaaS company? Are you selling a physical product? Taking a transaction fee? Something else? This is the foundation of your business model, and it needs to be crystal clear.
Don’t just tell us; show us. Use simple, clear visuals to illustrate your revenue streams. If you have multiple revenue streams, break them down for us. We want to see that you’ve thought through all the ways your business can generate income.
Current vs. Future Revenue Streams
Differentiate between what you’re doing today and what you plan to do tomorrow. Your current revenue model might be straightforward, but perhaps you have plans for a “huge unlock” in the future that could exponentially increase your earning potential and your TAM.
For example, you might say: “Currently, we’re generating revenue through subscription fees. In the future, we plan to introduce premium features and enterprise solutions, potentially increasing our average revenue per user by 3x.” As mentioned, show this visually.
A second example: “Right now we charge a per-seat subscription fee. As we grow, the data we collect, combined with our customer reach, will unlock a fintech revenue opportunity through lending and risk management.”
Be ready to go into more detail when asked. It is important to be able to tie what you are doing today to future revenue opportunities. It needs to make common sense, one needs to lead to the other. You can’t just pull revenue opportunities out of thin air! In general, taking this approach shows us that you’re not just thinking about today, but that you have a vision for scaling your business over time.
Pricing: It’s Okay to Be in Progress
At the seed stage, we don’t necessarily expect you to have your pricing model completely figured out. It’s okay to be a bit more general — “We’re ad revenue focused” or “We’re exploring a freemium model with premium features.” The reality is that pricing schemes will change as your company grows. Very rarely does a company have it figured out from the start.
However, if you do have more detailed pricing information, don’t hesitate to include it. Just remember, this slide is about your overall business model, not a detailed pricing breakdown.
Physical Products: Show Your Work
If you’re selling a physical product, we need to see more than just your revenue model. We want to understand your unit economics. How much does it cost to produce? What’s your margin? How do you plan to scale production?
A simple breakdown could look like this:
- Production cost: $X
- Selling price: $Y
- Margin: Z%
- Current production capacity: A units/month
- Planned capacity (next 12 months): B units/month
This shows us that you understand the nuts and bolts of your business, not just the big picture.
The Future of Your Business Model
I’ve talked about unlocking future revenue streams, but what else may change in the future and why? Margins profiles, customer types, how you charge etc. Don’t be afraid to dig into how you think your business model will evolve with your company.
What Not to Include
Remember, this slide is about your business model, not your go-to-market strategy. While the two are related, they’re distinct aspects of your business. Save your customer acquisition strategies and sales funnel for your GTM slide.
Also, resist the urge to cram too much information onto this slide. We want to see the big picture, not get lost in the details.
Common Pitfalls to Avoid
1. Being too vague: “We’ll figure out monetization later” is not a business model.
2. Overcomplicating: If you can’t explain your business model in simple terms, that’s a red flag.
3. Ignoring unit economics: Are your unit economics getting better, and is there a path to where your profitability is scaleable
4. Presenting unrealistic projections (pricing, margin profile): Be ambitious, but ground your model in reality.
5. Having future revenue streams without any type of bridge to show how you will get to them.
The Bottom Line
Your business model slide is your chance to show investors that you’ve thought critically about how your company will make money. It’s not just about having a great product; it’s about having a viable, scalable business.
Remember, at the seed stage, we’re not expecting perfection. We want to see that you understand the fundamental economics of your business, that you have a clear plan for generating revenue, and that you’re thinking strategically about how to grow and evolve your business model over time.
