6 principles of an effective pitch deck
How a powerful pitch deck can grab the attention of corporate executives
I have seen countless pitch decks both as a consultant and working as a venture developer at corporate venture builder—FoundersLane. I wanted to share what I believe are six essential principles that every pitch deck should enshrine. And, just like a good pitch deck, I will get straight to the point here.
1. Be succinct. The necessary parts - what is the opportunity, the market, the solution, the competition, the team, etc is often not done well. You have twenty minutes to get the VC on board. Ask yourself does the investor really need to know this? If the answer is no then remove it. 20 minutes seems like a lot of time, but it flies by, so each piece of information that you share will need to be chosen carefully to have the most impact.
“If I had more time, I would have written a shorter letter.” ~Mark Twain
2. Be emotional. No VC will buy into an idea if the presenter is just going through the motions. It helps if it is the founder himself who is presenting, but oftentimes they delegate this to a more junior member of staff or someone more comfortable speaking in front of a crowd. Big mistake. Nobody can substitute the founder of the business, it’s his baby and he will have an emotional attachment that nobody else will feel. Investors expect this level of emotion if they are to part with cash for a startup idea. Ask someone with an understanding of sales psychology to take a look at your deck. A couple of tweaks to images, placement, and words could make a multi-million dollar difference to your pitch.
3. Spell out the benefits. Ideally in numbers or give them a moving visual idea of what benefits they will gain by investing in your business. This needs to be compelling. Anyone can spout off hypothetical numbers but if the numbers don’t add up an investor will lose interest immediately. They want down to earth numbers based on real revenue growth. Pie in the sky estimates will not be well received. Spend time working out sales figures based on the best-case scenario, then scale it back because something will go wrong. It’s almost a certainty that you won’t hit your dream sales targets, but the good news is that nobody expects you to either. But if your targets are 30–50% above what is realistically expected, most veteran VCs will smell a rat.
4. Identify an unmet need. It is one thing to identify a problem and offer a solution that fits, it is something else to identify an unmet need in the market, one which is not necessarily readily accepted as a problem, that lies in white space. This is an area which has little if any competition and where the market is not yet developed. A market like this equals dollar signs for a VC, especially if you can show that there is a critical mass of customers who would be willing to pay to have a business fulfil this need for them.
5. Showcase your flexibility and adaptability. No investor wants to work with a team who are too set in their ways or are reluctant to take advice or suggestions. You will often hear that VCs choose teams, not products, and there is definitely some truth in that. But, above all, they want to work with individuals who can work quickly, change direction/strategies and modify their business model when new information comes in. Adaptability is an essential attribute of an entrepreneur. Investors need to see that you are open to change and won’t just head straight for the cliff edge, because you are too headstrong to accept a change in direction.
6. Visual presentation. This is make or break. The greatest idea that is presented with too much data and not enough visuals will not tell an evocative story. Our brains are hardwired for visual data. The pitch decks that work best are dynamic with lots of images, graphs, which can transform raw data into part of a story. If your pitch deck looks like you put it together in the hour before the pitch, on PowerPoint, you won’t convince the investors of your craftsmanship, obsessive perfectionism, and creativity — all qualities which are important in a startup founder.
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