To secure investors for your startup business, you need an effective pitch deck.
A pitch deck is your way to persuade investors that you and your business are worthy of investment. In this article, I’m going to outline exactly how to create a pitch deck that will succeed.
Build a Solid Pitch Deck Foundation
I’m a big believer that most aspects of business success rely upon a good foundation. Too many entrepreneurs create their pitch deck without first establishing the correct approach on which to build. To give yourself the best chance of creating a killer pitch deck, you need to have a foundation you know will give you the right platform to persuade investors.
What do I mean by a pitch deck foundation? A great pitch deck foundation is created by perfectly combining vision and practicality.
Some businesses succeed through blind luck, but most truly great business success stories have a vision at their heart. Before creating your pitch deck, write down the ultimate vision for your company. Then, write down the milestones required to make that vision a reality.
Now, look at those milestones and write down which ones apply to your immediate investment round. Once you have a clear idea of the milestone you are trying to reach when securing investment, you have a path to success.
Finally, bring in practicality into the mix. Are these milestones achievable? Is there a solid route to reaching them? When pitching, if potential investors believe your ideas are pie in the sky, they won’t invest.
If your vision is impractical, alter it with what’s achievable until you have a vision and practical path towards making that vision a reality that investors can believe in.
This is your foundation. Everything in your pitch deck should flow from this and facilitate your vision and path.
For example, if your current startup funding round of investment is to raise capital for marketing, then your pitch deck will be geared towards showing how that marketing capital will improve your business and provide a healthy profit to investors.
On the other hand, if your immediate fundraising milestone is to develop a product, then again, your pitch deck should reflect this.
The 9 Things You Need for a Great Pitch Deck
Once you have your pitch deck foundation, you’re ready to create your pitch deck. I wrote an article for Forbes which outlines the 9 stages when figuring out how to create a pitch deck to clearly differentiate the structure from the old traditional business plan.
These stages have gone on to become a blueprint that many websites and business leaders have shared, as they are such an effective way to build the best pitch deck possible.
Let me go over these stages with you.
They are Problem, Solution, Market, Product, Traction, Team, Competition, Financials, and Amount Being Raised. Each stage will guide you to create a slide presentation for your pitch deck that flows well and builds the best argument for investment in your business.
Stage 1: Problem
The first stage of your pitch deck needs to outline the problem your business, product, and/or services are trying to solve. You can use 1 – 2 slides to explain to investors the gap in the market you are trying to fill.
Stay concise with this. Only outline one major problem you are trying to solve for potential customers. This will give your pitch deck focus and will keep the most salient argument for your business idea clear in the minds of investors.
Stage 2: Solution
This slide should be as concise as your problem slides. I recommend no more than two slides on this segment if possible. For the solution stage, you are showing investors how you are going to solve the problem you outlined at the beginning of your pitch.
This should be a clear and compelling argument about why your solution will be a winner. Include a quick summary of the scalability of your solution so that investors can see how their investment will quickly propel your business to a place where it will provide a great return on investment.
Stage 3: Market
Stage 3 of your pitch deck should clearly describe the market where your business will be competing. If the overall market is less than $1billion, then investors might think your business will only grab a small amount from that. This could put them off from investing.
Most investors want to see how their return on investment will grow as much as 10 times in 5 – 7 years. You can’t, and shouldn’t, over-exaggerate the marketplace. However, I recommend including a graph showing the growth of the market you will be trying to access.
Even if a marketplace is currently quite small, there may be data to show that it will grow markedly in the future.
Stage 4: Product
In this stage, you will be showing and describing your product/service so that potential investors understand how it will work and how it will resonate with customers.
Use your market research here. If you have quotes from people your marketing team has interviewed about what they think of your current or future products, include them. This is especially persuasive if those quotes show how easy the product is to use and how much they love it.
Stage 5: Traction
No matter how good your pitch, investors want to see the numbers. In the traction stage of your pitch deck, show the growth of your business per month or quarter. Use a standard metric such as revenue or units sold.
Many startups are not at the stage yet where they can share this information. If you do not have this data yet, especially if you haven’t launched your product, I recommend either avoiding this section or including reliable growth indicators.
A good growth indicator could be how quickly a competitor has grown or how many people you believe will buy your products based on market research. Most investors want to see at least a 15% growth rate, month over month, in order to see a product or service as viable.
Stage 6: Team
If you want to know how to create a pitch deck, you need to look no further than stage 6. The team section of your pitch deck is one of the most important. A great business plan is essential, but if an investor doesn’t believe in those executing that plan, they will not invest.
This is your opportunity to show off the talents of those in your team. Use bullet points to show the top two or three achievements of your startup’s founders and managers. The team stage is all about convincing investors that you and your team are a safe bet.
Stage 7: Competition
Most startup founders believe that their idea is completely original. Sadly, this usually is not the case. Most ideas are currently out there being worked on by competitors.
The slide for this section should show information about your competitors. However, do so in a positive way. Show how much capital your investors have raised to show the value of your own business.
Make sure to clearly differentiate yourself in these slides from your competitors. Show investors why the way you are solving a problem will be more successful.
Stage 8: Financials
This is where you summarize any projections for business performance. Angel investors ideally want to see projections for at least the next 3 years, though some will ask for a 5-year projection.
Although projections are only estimates, they should be grounded in reality. Don’t make the mistake of providing wildly unattainable projections for your business. That’s a major red flag for investors.
Investors want to see that your business will do well, but they also want to know that the people handling their investment capital are responsible and accurate. It’s better to over-deliver than to fall markedly short of projections.
Try not to get bogged down in too many figures here. A concise couple of graphs is more than enough.
I recommend that entrepreneurs have an Excel sheet on hand to give to potential investors after the presentation. This means they can take a more in-depth look at your financials if they want to, without cluttering your pitch deck.
Stage 9: Amount Being Raised
The final slide should be a summary of how much investment you are looking for to reach your targets. I advise entrepreneurs to use a range instead of the total amount.
A ballpark figure of $3million to $5million, for example, will not put investors on a budget off from investing. However, if you just state $5million outright, they might think that is too much.
Develop Your Business Pitch
I hope this article helped you learn how to create a pitch deck.
If you would like to learn more about the business world and creating the perfect investment pitch, check out The DealMakers Podcast. In each episode, I interview leading entrepreneurs who share their strategies for, among other things, creating the perfect pitch deck.
Remember that storytelling plays a key role in fundraising. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, 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.
ACCESS THE PITCH DECK TEMPLATE