How does a pitch deck work? If you have an idea for a startup and need money to make it happen, writing a good pitch deck could be the most important part of your business plan.
To be able to communicate, or pitch your vision to investors, your pitch deck is the first step in that process.
A good pitch deck can help you get a meeting with a potential investor, who will then decide whether or not to invest in your company. A bad pitch deck can mean the difference between millions, or billions of dollars, and no money at all.
If you are a startup looking to seek funding for your venture, keep reading. In this article, we will show you how does a pitch deck work, what to include, and provide you with some big pitch deck do’s and don’ts that you can keep in mind to guarantee your pitch has the greatest possible chance of being funded.
First, let’s take a look at exactly what a pitch deck is.
The Ultimate Guide To Pitch Decks
What is a Pitch Deck?
A pitch deck is a presentation tool used to communicate your business’s vision to investors and potential partners. It should be concise, visually appealing, and persuasive enough to get people excited about your idea.
A pitch deck is basically a presentation made up of slides that describe your business and its goals. It helps you convey information in an organized way so that it can be easily digested by others.
A pitch deck can be used in many different ways:
- You can use it to attract important hires and advisors.
- You can use it as an elevator speech to explain what your company does.
- You can use it as a way of telling investors about your company’s progress.
- You can use it as a way of telling potential customers about your product or service.
The pitch deck is the first thing you’ll show investors. It’s the first step in getting your business off the ground, and it’s important to make sure it’s as professional and eye-catching as possible.
Your pitch deck should be tailored to the audience you’re pitching to. So make sure you know what kind of investor you’re dealing with before putting together your presentation.
The deck should tell an abbreviated version of your company’s story, but not too much, you don’t want them to get bored or distracted by extraneous details. You also want to make sure that all of your information is accurate and up to date.
See How I Can Help You With Your Fundraising Efforts
See How I Can Help You With Your Fundraising Efforts
What Should You Include in Your Pitch Deck?
The pitch deck is the centerpiece of your investor presentation. It’s a visual outline of the key components of your business, and it’ll help you get your point across quickly and effectively.
The best way to think about a pitch deck is as a visual narrative. It should include all the information an investor needs to know about your business in order to make an informed decision about whether or not they want to invest.
A good rule of thumb is that if it doesn’t need to be in your pitch deck, then don’t include it. You want to focus on the basics including:
- What it is
- Why you are doing it
- Who you are
- Why now is the right time
- Why it’s important for them to get involved
Leave out anything that might distract them from those things.
The most important thing to include in your pitch deck is data. Investors want to know how many customers you’ve got, what they think of their experience with your product, how much money the business has made so far, and how much money they can make. You’ll also want to include some information about yourself and why you’re qualified for the job of running this business. Understanding these points will help you know how does a pitch deck work.
Keep in mind that in fundraising, storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
How Many Slides Should be in Your Pitch Deck?
A pitch deck is a business tool that helps you to concisely and clearly convey your company’s mission, vision, and goals. For an early-stage startup, it should be 10 to 12 slides long, no more.
You can use the first slide (the cover slide) to set the scene, including an image that reflects who you are, what your company does, and why you’re worth listening to. An important note: You don’t want to include too much detail in your pitch deck. The goal is for everyone who sees it to understand what your company does, not for them to get an in-depth look at every aspect of its operations
You want a pitch deck to be short and sweet, you don’t want it to be so long that people lose interest before they get through all the information.
The next few slides should focus on why this is important to your target audience:
- What problem does it solve?
- How is it different from other offerings on the market?
- Why should people care?
This is commonly known as the problem and solution section.
Nail The Problem & Solution Section.
The problem and solution section is the part of your pitch deck that lays out the need for your product, the problem it solves, and how you plan to solve it. You want to make sure this section is as clear and concise as possible.
The problem section should include:
- What is the problem, who is affected by it, and why are they affected?
- What are other companies doing to solve this problem?
- How does your product solve this problem better than everything else out there?
In order to answer these questions, you need to do some research on other products that might be similar to yours. You also want to talk with people who are affected by this problem so that you can understand how their lives have been affected by it. The information you collect will help you when learning how does a pitch deck work.
Make Sure You Explain Your Business Model and Market
When you’re creating or presenting a pitch deck, it’s important to make sure you cover the business model and the market size.
In the business model section, explain what your company does and how it makes money. The business model section should include things like:
- Who is your target market?
- How big is the market?
- How will you make money?
- What trends are shaping how this market grows or shrinks?
- Why do you think it’s a good idea to go into this market?
- How much capital do you need to get started?
It’s important to have a clear understanding of who your target market is and why they would choose your product over others.
Arrange Your Target Market into Segments
Segmenting your target market is a critical step in creating a successful pitch deck. You need to know who you’re selling to, so you can tailor your pitch accordingly.
You can create as many segments as you want, the most important thing is that they make sense, and they are relevant to the business at hand. As an early stage startup focus on the one initial niche you will be focused on.
Layout the Competitive Landscape
The competitive landscape is the context of your business and the environment in which it operates.
In this section, you’ll want to show that your business is not only different from its competitors but also better.
The first step is to list out the most likely competitors. The ones who are most likely to be considered by your target market when they’re planning their next purchase.
Next, you’ll want to highlight how you are better than each competitor. How do you offer something unique from what already exists? What would customers get out of it?
This is best displayed in a graph format. It’s one of the elements of how does a pitch deck work.
Introduce Your Team
One of the first things a potential investor will want to know about your company is the people behind it.
In this section of your pitch deck, you’ll want to introduce yourself, as well as any other key members of your team that are relevant to the project at hand. You should also provide some information about how long each person has been working with you, and what their experience is like.
You can also include a link to LinkedIn profiles for each member of your team if they have one. This will help clients get a better sense of who you are as an organization and how many years of experience you bring with you.
Financials & Use of Funds
The financials section of a pitch deck is important. It’s where you’ll convince investors that your company is worth investing in, and it should be well formatted and organized to help potential investors understand the numbers.
Be sure to provide a breakdown of how the funds will be used, so investors can understand how you plan on spending their money.
The following information should be included:
- Number of customers
- Company revenue
- Gross margin
- Net income
- Profit margins
- Use of Funds
You should also include projections for future growth and profitability, if possible, as well as any other relevant information about how your company makes money. Knowing how to add them will help you better understand how does a pitch deck work.
Pitch Deck Do’s & Don’ts
Do know your market
The most important thing you can do is to understand the people who are going to buy your product. What are their needs? How does your product fit into their lives? Why will they choose yours instead of someone else’s? If you don’t know the answers to these questions, then you need to do more research!
Do keep the introduction short and sweet
It’s important to keep the introduction short and sweet. You want your audience to know what you’re pitching and why they should listen, but you don’t want them to get bored.
Do research other pitch decks
It’s important to understand the format and structure of a pitch deck, but it’s equally important to see what other companies are doing with their pitch decks. Look at both successful and unsuccessful decks, and see what they did right and wrong.
Do tell a story
A good pitch deck is like a really good movie—you want to keep your audience engaged and invested, so you need to start with a compelling story. You want them to be able to relate to the problem you’re solving, and understand how it relates to their own lives.
Do have consistent formatting
Consistent formatting is one of the best ways to convey professionalism and expertise. Don’t use different fonts or colors, and don’t mix up sentence structures. Make sure the format is easily understood by readers, both current and potential.
When you’re ready for more in-depth information about how to create a pitch deck, check out this video I have created. You’re sure to find it helpful.
Don’t take too long
A pitch deck should be no longer than 10 minutes, which is about the length of a TED talk. Don’t try to memorize your pitch deck and then recite it word for word like a robot. Your audience will see right through that, and you will lose credibility in the process. Instead, practice telling your story so that it comes out naturally, and so that you can remember to say something memorable every few seconds.
Don’t include information that’s not relevant to the audience
A pitch deck is a tool for communicating your business to potential investors. It’s not the place to go into detail on every aspect of your business, but rather to present the most important information in a way that’s easy to digest.
Don’t assume your audience is stupid
Also, don’t assume they already know everything about your business or industry. When you’re creating a pitch deck, it’s easy to fall into the trap of thinking that everyone knows what you do and how you do it. The reality is that most people don’t know anything about your business and have no idea why they should care.
Don’t use a font that makes it hard to read
A pitch deck is a work of persuasion, so you want to make sure your audience can actually follow along. If you use a font that’s too small, it’ll be hard for your audience to read and they’ll tune out—and you won’t be able to convince them of anything!
Don’t use a font that doesn’t match the theme of your company
Remember, your pitch deck is the first impression you will make on investors. You want it to be professional, cohesive, and memorable. Don’t go with a font that doesn’t match your company’s branding style or industry.
Don’t go overboard with the animation or transitions in your pitch deck
It can be distracting. You want to get people’s attention and make a good first impression, but if you overdo it with the animations, transitions and other bells and whistles, it will just distract from your content.
Avoid using too many colors
Too many colors can be distracting, and it’s hard to focus on the most important messages when you’re being bombarded with so much visual information. If you want your pitch deck to be a success, limit yourself to three to four colors at the most. Keep these factors in mind when learning how does a pitch deck work.
A pitch deck is an important tool in your business. It’s a concise and structured way to present your company and its value proposition to investors, partners, or potential clients.
It’s also an important part of your business strategy. Having a well-crafted deck can help you get funding for your company, make key partnerships happen, or even land new hires and clients.
We hope this article has cleared up any questions you may have had about pitch decks and provided you with insights into why a pitch deck is important, what you should and shouldn’t do, and what to include in order to help secure your next big funding round.
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