How Investors Review Pitch Decks From Startups

How investors review pitch decks before funding startups?

Just like selling your customers, it’s not so much about you, but rather meeting their needs, and wants, and understanding how they think so that you can show them what a great opportunity you are offering.

You don’t get many chances to blow when it comes to pitching startup investors. You certainly may not get a second chance with your most desirable and ideal investors.

Understanding how they review pitch decks, what they are looking for, and what will get you rejected is a big part of the battle when it comes to fundraising for your startup. It doesn’t have to be difficult, yet few entrepreneurs appear to even take a few seconds to consider what their prospective investors are thinking, and how they work.

Pitch Decks & Fundraising For Startups

A pitch deck is one of the most essential tools every startup needs to equip itself with.

Even before thinking about fundraising or going through the process of building out a full business plan, it can be extremely helpful, if not critical, to put together a few slides in a pitch deck.

It will help you think through and crystalize your idea. It will enable you to recruit advisors, mentors, cofounders, and key talent. As well as equipping your team to do their best work, and work efficiently.

No matter how well you know any potential investors, you are still going to be expected to deliver a good pitch deck. These few slides alone will make or break your access to money, the most important support, and in turn, your mission.

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.

Pitching Live Vs. Sharing Your Pitch Deck

When you are pitching live, even with your slides on a screen as a backdrop, it is much different from simply sharing your deck with a potential investor, and letting them make their way through it.

Both ways can work. You may well do both with the same investors. Yet, it is important to understand the nuances, and how to optimize for them.

When you are pitching live, you have the ability to read the room and read your audience in real-time. You can see when they are losing interest and tuning out, versus leaning in, are being engaged, and are digesting what you are delivering.

You have the ability to tweak and modify on the fly. To speed through to the points that may be most relevant to your crowd, and to adlib as necessary. You can also save a lot of time for a live Q&A, so that you can convey what they need, and overcome objections easily.

You don’t have these luxuries when just sending your pitch deck and letting investors navigate through it on their own. You’ve got to nail it all the way through.

The Right Way To Send Your Pitch Deck To Investors

The first obstacle to getting potential investors is simply to get your pitch deck through, and get it seen, and opened.

There are other articles that dive deeper into this topic specifically. The essence of this is that you need to share a link to your pitch deck hosted online. Do not send your pitch deck as an attachment. Otherwise, you will immediately drastically reduce the chances of your message getting through, or your pitch deck ever even being opened.

After they’ve opened your message, which takes a great blend of art and science in itself, you will need a strong pitch message. Don’t just expect them to open a link or file from a stranger on the internet. Most of us have already trained our kids to be smarter than that.

You need to immediately establish that this pitch is a great fit for them, worth their time to review, and is an opportunity they don’t want to miss out on.

To accomplish this, you may want to include a pitch deck summary. Your pitch message for your pitch deck may also include your latest investor update and links to any recent PR. This will establish your credibility right away, and prove you can execute.

How Investors Review Pitch Decks

First of all, investors don’t review most pitch decks they get. They are busy. They are inundated with more junk than ever. In many cases, to be efficient with their time, they are just looking for reasons to discard your pitch, and justify their assumption that you are just offering more spam.

Cold pitching can work. Though you will have far more luck in fundraising if you have already gotten an introduction from someone they know and trust, or have spent some time building the relationship in advance.

First Impressions Count

Whether it is fair or not is a whole other argument. The bottom line is that, just as in many other things in life, first impressions count. They will make or break your opportunities. This is certainly true of your pitch deck cover slide too.

Don’t overdo the visuals. They won’t cover for a lack of substance later on. Though you do have to nail the right format for your pitch deck cover slide. It has to be great to get investors to swipe to the next slide, instead of relegating you to their spam box.

How Long Do You Have?

On average, investors take less than three minutes to review the few pitch decks that they take seriously.

That makes it essential your pitch deck is very brief and speedy, and easy to find the answers they need, and they still have time to act afterward.

Depending on the stage of your startup, you only need 10-20 slides in your pitch deck. Normally 12-16 at the most. Less is more if you want your fundraising campaign to be a success.

Each slide must be very concise, with minimal text. Augmented by quick and easy-to-get visuals where applicable. Don’t forget this aspect when working out how investors review pitch decks.

What Investors Are Looking For When Reviewing Pitch Decks

Exactly what boxes need to be checked, and at what scale will depend greatly on the stage of your business, and the investors that you are pitching at this round.

For early-stage startups, it is much more about the vision, team, and idea. For later-stage companies, it is about tangible data.

Angels, VCs, family offices, strategists, and private equity firms will all have their own factors they are prioritizing.

Each can be unique too. For some, investing is just about money. For others, it is balancing returns versus risk. For others, it may be feeling good about what they are investing in. Each will also have their own expectations of the returns that will make investing worth their while.

Did You Do Your Homework?

Far more than the exact data you have or the spin you put on your business and solution, investors are reviewing pitch decks to see if you even did your homework. If you are serious about this.

Did you bother to research what they want in a pitch deck, and what’s important to them? Did you search to get your hands on a good pitch deck template?

Did you do your market research and validate everything? Did you make sure this is a good fit for them and respects their very valuable and scarce time?

If the answers are no, you are not ready to share your pitch deck.

Can You Focus & Keep It Simple?

Startups cannot be successful without the founders being able to focus intently and keep it very simple.

If they cannot, it will derail everything else they are trying to do. They will not be able to execute and actually make things happen.

This will show up in how much content is on each of your slides. It will show up in how you describe your product and its value and benefit. It will be demonstrated in your roadmap, financial forecast, and milestones.

If you are not sure you are nailing it, put it through the grandmother test.

The Problem

One of the most critical factors for investors is the problem you are basing this business on.

Is it a real problem? One they are already familiar with, or have already validated for them? Is it pressing enough that your prospective customers care enough to pay real money to solve it?

Most startups fail right here. You can tweak just about everything else about your company, but if the problem isn’t viable, then your startup has no foundation to stand on. When understanding how investors review pitch decks, make sure to have the problem clearly outlined.

To make the right impression, you should know how to send a pitch deck to investors the right way. For more information on how to do that, check out this video I have created.

Market Size

Is your problem, customer pool, and their spend big enough?

This is one of the critical pillars of any company. You can only grow as big as your market will support.

Startup investors are often looking for 10x to 100x returns. If you can’t offer the opportunity to easily achieve that, you are probably not a fundable company.

Traction

Traction speaks huge amounts about your business and the investment opportunity.

If you have the right traction, this is a no-brainer for investors to throw money into and a lot of it.

If you don’t have it, then you are going to have to fit for the money and crawl your way tooth and nail to getting funded. At least, unless you are a pre-seed startup with a golden idea and team, and strong relationships.

Financials

How well have you managed the money you’ve had so far? Is there really a credible and viable plan to multiply their money here?

Team: Can You Stick With It?

The team is everything in early-stage startups. Ideas are cheap and plentiful. Great teams are rare.

It takes an enormous amount of grit, tenacity, and mental and emotional fortitude to make it as an entrepreneur. Most people do not have what it takes.

Keep hitting them up, follow up, and break them down to prove you are doing it anyway.

Can You Protect Their Money?

You need to show that this is not just commercially viable and potentially profitable, with good unit economics, but that you can minimize their risk too.

What is your moat? How is your position in the market defensible? This is the benefit of doing hard things, with big barriers to entry.

Can You Sell?

If you can’t sell them, you can’t sell to customers or other investors in the future.

They will want to know who else is investing to demonstrate this. Securing a strong lead investor early will make it a lot easier to get others to jump on the bandwagon.

Summary

How investors review pitch decks?

You’ve really only got one shot to crush it when you are sharing a pitch deck with investors remotely. You have to get your deck through. Get it opened. Then make sure you keep them flowing through, so they are not only compelled to act but have time when they reach your last slide.

Understanding how they screen, view, and evaluate pitch decks will be vital to your fundraising success, and your startup’s ability to survive and thrive.

You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.