The pitch deck manual
for startups looking for seed funding
Your pitch deck aims to cover the most important aspects of your business that the typical investor will want to know. They need to know these key pieces of information to even consider putting in the time to analyse your business. The goal is not to explain everything there is to know about your startup. This is better done in a separate document where you can explain in-depth about your products, finances, and the other nitty-gritty details of your business.
Pitch decks are handled similarly to resumes when people apply for a job. The investor quickly needs to understand if it is interesting to invest time in that company. Most investors will take a maximum of 5 to 10 minutes to make that judgement call based on your pitch deck, so those few minutes are the only time you have to get your point across.
The best pitch decks are understandable for anyone who looks at them, not just for industry professionals who understand the jargon that you use. Most investors don’t know everything there is to know about your product. This means that your presentation of the product concept shouldn’t require them to read up on everything in advance. By making your pitch difficult to understand, you will have lost the interest of a majority of investors. Keep it simple. There will be many more interactions after your pitch deck to guide them through your entire vision, specifics and technicalities. So how do most investors will decide whether to invest? It boils down to 2 main factors: 1.) your team composition 2.) current traction at the seed stage.
Team
The composition of the team in terms of commitment, industry knowledge and prior (entrepreneurial) experience is usually the most important factor for investors to even consider investing. The team slide should answer the question, “Why are we the best people to solve the problem identified?”. This slide in the pitch deck has to cover the most important members of the team (max 5 or 6), their backgrounds and their relevant experience for the venture. Indicate which of them are founders and who is working full-time. Working full-time shows investors that the team believes in the idea and is fully committed to realizing it. Each of these people should have a photo, their name, role and why they’re good at what they do. It does not mean you need to include everyone’s resumes. Stress only the relevant expertise like having a PhD in Computer Sciences for the CTO, but leave out her period as a part-time caretaker if that has no relevance.
Execution
Companies rarely succeed because of the idea they start with. The 10% that do succeed are determined by how the idea is being put into practice. Google wasn’t at all the first search engine, neither was Facebook the first social platform on the internet. These companies did not just have a good team, but they were also able to build their company in a much better way as compared to their competition. Their decisions, priorities and approach were different, altogether culminating into an exceptionally successful execution. Your pitch deck needs to explain how your team will make your business run smoother, faster and better as compared to your competitor or someone that copies you. Which if your idea really is good, someone will. Investors make it their job to learn about the next best ideas on an everyday basis. The needle they are looking for in the idea haystack is the team who took their idea to the next level. Focus on the “how” and not the “what”.
Growth
When you are raising funding you do need to have some kind of traction. This can be in terms of revenue (money is always the best). Other options are active users, new downloads and installs, version of the prototype product, partnership agreements, sign-ups, downloads, pilot projects, etc… And assuming you started at zero, there always is growth to show for, the more the better. This gives investors some insight as to how much time you needed to get to this point and what your potential over time will be if you get funded.
Market opportunity
Most startups, unfortunately, will never become sustainable businesses and pass the 5-year survival age. A common saying is that 9 out 10 startups fail. Investors are very aware of this and they spend their time trying to find the one company that will grow exponentially, while in the process avoiding the other 9 that will fail. Statistically, they are not able to do so, but your pitch at least has to convince them till such a degree that your company will possibly make up for the losses for the wrong choices that the investor will inevitably also make. If your pitch deck does not clearly show why your company will be A LOT BIGGER in a few years from now, then it is simply just not interesting.
Value proposition
The value proposition describes why your customers will pay for your product. A value proposition is best based on facts and data, not on opinions. Everyone has ideas and things they find important. Assuming that everyone else has the same problem and will spend money on solving that is a common startup mistake. In your pitch, you need to demonstrate (and it needs to be as factual as possible) why your solution and product will sell and grow. It has to solve an important problem for enough people for which they are willing to in some form pay. The value proposition is easiest structured in:
- Problem
- Solution
- Proof for your solution in the form of traction/demand
Competitive edge
Virtually no company is the only one trying to provide the only possible solution to a problem. Every business has competition and if you don’t they will come soon (or you need to research more). Defensible products such as a patented medicine that cannot be legally reproduced in the next few years by anyone else are also susceptible to lack of patent coverage in other countries. In addition, your target patients may use alternative treatments . These treatments then compete with your product in the market. This is a downside risk for investors. If they support the wrong by horse funding it and the other options win the market, your business and their investments are gone. So think hard and explain in your pitch deck the ways you have already or are planning to protect your startup from that. Don’t worry too much about protecting yourself from the giants on this planet, at an early stage there is not too much you can do. Show that you are aware that you need barriers for entry into your market that will allow you to grow as you plan.
What most founders struggle with is the inhibition associated with admitting that their idea isn’t unique. Don’t be afraid of openly displaying your competition. Be proud of it! Competition serves the dual purpose of showing a demand for your product and showing you potential paths to take for your company strategy. Your biggest competition should be your strategy hero and if they’ve made it so can you. Most importantly, talk about what makes you better than even your hero and why.
Investment opportunity
All the previous points should culminate into this item. The investor wants to know why under the current conditions, at the current pricing, in the current market and everything else considering, his dollars should go to your business and not any of the other 100 pitches on his desk. Basically, that means describing how investing $1 today will become $10 next year and $30 the year after. Be specific about how much you are looking to raise, what you will need it for and what your plan is on returning it and the profits to the investor.
Get started right away and keep redoing it
A good pitch deck is not written in one go as, in fact, no good presentation or text is. Many people forget when writing that they do it for the reader, not themselves. Putting down on paper your ideas about your company that you are in the middle of creating is simply not possible. So start making a simple deck covering the above-mentioned points and keep redoing it every month to see if you are still happy with it based on your new knowledge and progress. The pitch you email to investors should be self-explanatory and is allowed to be wordy to an extent. The pitch you present to an audience should be mostly pictorial with you filling in the gaps as you explain it. The main takeaway is to keep in mind that the person going through the pitch has never met you, has never heard of the company and knows nothing about the product.
The Startup Buddy in collaboration with Golden Egg Check can also help you to make your pitch quicker. Our pitching platform allows you to build a pitch from scratch by using building blocks that help you think of the important parts that should be in your pitch. The components available on our pitching platform have been created from the learnings of 800 funding deals and 15000 pitches by our partner Golden Egg Check across the past 9 years. In case you want our hands-on help, that is possible too. For S$1000,- we will together with you build a pitch that will capture anything about your business that is relevant for you to get funded.
The Startup Buddy is SEA’s founder friendly Startup accelerator. We provide step-by-step guidance through specially designed missions, mentors from around the world and curated content to help you with your Startup journey! Find out more at The Startup Buddy!
