Successful startups are known for their disruptive approach, so it’s intriguing that many hopeful founders are moderate (and now and again messy) with regards to their pitch deck.
So just how important is your deck? Well, according to the latest study of 200 startup pitch decks by Harvard University, investors spend an average of 3 minutes and 44 seconds reading one deck. Every second investor spend on your slide is priceless, and great deck should be easy to understand, simple and to the point. Most successful decks aim for the magic 10–15 slides (as recommended by Sequoia Capital and Y Combinator), averaging 12 for a simple and to the point deck that still elaborates on their idea.
Tell a Compelling Story — Before I go into details on each of the 12 screens in a successful deck, it’s important to remember a pitch can fall short if it’s not structured as an exciting story. You need to play to both the heart and the head, as investors make decisions using both!
A good deck should complete the “Inigo Montoya.” State who you are/what your startup is, the problem you’re trying to solve, and how you’re going to solve it.
1. Introduction — This is your company purpose. It should be short — a one-sentence pitch should do it. This is commonly called the “elevator pitch.” While there may be some value in relating to an existing startup, many investors have indicated that this is a sign of immaturity, so be wary of this!
2.The Problem — Get the investors’ attention by going to the point and present the main problem, they should understand it and agree that there is a real PAIN here and you should solve it immediately. If you have some actual data to support the customer pain insert it as it will back up your statement.
3. The Solution — This is where you become the hero that saves the day; you want the investor to understand your Unique Value Proposition (UVP). Keep it high level do not get too much into the tech or details, or you will finish your time on the small unimportant details. Stick to how you make your customer life better.
4. Market — Investors need to know you are not the only user of your product! Other than identifying the emphasis of your company and solving the problem, it’s vital to know there is a market for your solution and that you intend either to penetrate it or create that market.
According to the legendary VC Marc Andreessen from Andreessen Horowitz: Marc Andreessen insists:
“The market is the most important factor in a startup’s success or failure….”
List your competitors to show how are they attempting to tackle the same problem you are. Some hesitate here because they assume investors will feel the market is too crowded; however, you will rarely be competing directly with other startups in the space. You need a slice of the pie, and there’s plenty of pie to go around! Not listing your competitors poses two much greater risks: it raises the question as to why there is no one else in the space, and points to investors that you haven’t done your due diligence and research on your space.
6. Advantage — what are your advantages? What sets you apart from your competitors on the previous slide? What do you disrupt/innovate? This is where you show investors that you’re the best thing since sliced bread!
7. Team — This is your most important page (and second most viewed one!) — investors are betting on the jockey, not the horse. There are thousands of good ideas out there, but this one is yours. Show them that you’ve got what it takes to make it happen!
Y Combinator founder Paul Graham says:
“We thought Airbnb was a bad idea. We funded it because we really liked the founders.”
8. Product — What does your product do? How is it architected? Why is it designed that way? Do you have any IP filed? Where are you in terms of development? How far are you from beta testing/a launch? Investors come in at all levels of play, and this slide will help them gauge whether the timing is right for them to jump on board!
9. Traction — If you already have traction this is your money shot — people already think your product is exciting, show your investor, so they think so too! Be sure to share what metrics you’re using — not too many, one or two — and use new numbers from the last six months (whatever happened two years ago is old news!).
10. Business Model/Financials — Failing to find the right business model is one of the reasons why most startups eventually fail. This is your most viewed slide, and you will get lots of questions here — think carefully on what metrics you use and why. It’s your chance to show your business is viable and can make lots of money for investors (let’s face it, at the end of the day they want to make money!). Your Cash Flow projections are worth as much as the paper its printed on and in the case of a digital slide, nothing; everyone knows it means very little, but it shows investors you know your market and are grounded to reality/have a plan for moving forward.
11. Investing — This is where you say how much you are looking to raise and give a general overview of what you are going to use the funds for. DO NOT put terms and valuation on your slide! Leave it to a face-to-face meeting with investors.
12. Contacts — This one will seem silly to you but assuming potential investors read the entire deck and spend a full 3–4 minutes, don’t forget to give them a way to reach out! Too many decks will change hands among friends and land in the hand of an interested party with no way to contact the founders.
Now that you have the basics on starting the first step toward raising money to remember it’s a numbers game! Don’t fear rejection — you might get passed on by 500 investors before finding one that will believe in your vision.
However, just because it’s a numbers game doesn’t mean you shouldn’t hone in on certain niches! Try to research investors who are active in your field and invest at the level you’re looking to raise funds at; this will go a long way as to not wasting their time and more importantly your time.
As far as managing your sends goes, we built a nifty little tool to allow you to make these slides with data feeds to ease your research. When you’re all set, you can send your deck out easily and get metrics/tracking going as to who viewed what, when, and for how long! Check it out at slides.ai.
Spend time perfecting your slides-–they are your first impression with investors, and as Oscar Wilde said: “You never get a second chance to make a first impression!”