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Neil Patel

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Ready to raise a round of funding for your startup? Check out these interesting facts and data around pitch decks to make the most of your campaign…

Pitch decks are one of the most pivotal and valuable documents in history. Perhaps far more so than the invention of the business card. Looking at the impact of notable funded startups they are perhaps more powerful than some 100-year-old businesses, Super Bowl ads, entire national economies, and the founding constitutions or legal systems of some countries.

Think about the changes Facebook, Twitter, Airbnb, and Uber have made. Yet, despite the tens of billions of dollars in capital pitch decks can bring in for hyper-growth companies there is very little clarity on them, and best practices for creating and presenting them.

Consider that even Wikipedia does not have a page dedicated to Pitch Decks. Instead, you’ll be redirected to a page for ‘sales presentations’. The next runner up is a page for M&A pitch books.

Though you aren’t going to even get close to selling your company for billions and needing one of these pitch books until you’ve mastered raising startup capital with a pitch deck.

Pitch Decks 101

A pitch deck is a type of sales presentation. Startup entrepreneurs shouldn’t forget that overriding theme. It is far more a sales tool than a traditional investment prospectus or business plan. Though it does share traits of these documents and business tools as well.

A pitch deck is a collection of slides. Typically arranged in Microsoft PowerPoint or Google Drive. Its purpose is to present a startup business idea or thesis or to document an existing business and project the outcome of venture investment.

Pitch decks are used by startups before launching through a variety of rounds of fundraising over a period of years.

They tell the company’s story, explain why it is a good investment, and predict potential returns for investors.

A pitch deck can be shared via a link to these slides hosted in the cloud for new investor prospects or presented live on screen or stage to a real audience. Each presentation includes the most interesting facts and data around pitch decks pertinent to your new company.
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.

Interesting Pitch Deck Facts & Stats

Check out these interesting data points, statistics, and facts around pitch decks that can help you put them in a better perspective and empower your understanding of them and how to excel at fundraising for your startup.

1,000 Plus Pitch Decks Are Created Every Day

In fact, that’s how many pitch decks are believed to be created just in San Francisco, California each day. With other major cities like New York catching up with or surpassing San Fran as tech hubs, and new startup ecosystems thriving and surging around the world, there are many, many more decks being created.

While the number of startup investors and funds may have been growing as well, the limited number of these investors certainly sounds overwhelmed by pitches and funding requests.

It’s competitive, to say the least. Something to definitely keep in mind when it comes to investing in creating your next pitch deck and getting help connecting with the right investors.

Just 10 Slides Are Needed For Early Stage Startup Pitch Decks

One of the most significant, common, and financially deadly mistakes for startups is going too long with their pitch decks. Keeping it short and sweet seems almost impossible. Even for founders who can code virtual magic and map out space expeditions.

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There may be scenarios in which a few more slides are justified. Note that this is almost exclusively for later-stage startups. Those which already have a substantial amount of existing operational and financial data to report, or more complex and multi-level business structures.

For early-stage startups, there is rarely justification to go over 10 slides. One for each point you need to convey, plus a cover slide.

The Best Font Size For a Pitch Deck Is 30 Point

Guy Kawasaki has said all text in a pitch deck should be at least 30 points. This is key for being able to deliver your points clearly and quickly. It also helps you stay disciplined in minimizing the text used on each slide, so your pitch remains simple and clean.

It is also wise to stick to clean, basic fonts that are easy to read. You don’t want to create any more friction than necessary. But be sure to include all the interesting facts and data around pitch decks.

How Long Investors Will Spend Viewing Your Pitch Deck

Despite how important and valuable pitch decks are and all of the money riding on them, investors now spend an average of fewer than 3 minutes viewing a full pitch deck according to Docusend.

This number has long been under 4 minutes. As of 2021, that time has dropped to just 2.7 minutes on average.

Consider what that means for each of your slides and trying to get your points across. You have just seconds to convey what is most important and get them to remember it. If you want them to remember anything, you need to keep it very simple and clear.

Percentage Of Pitches That Investors Fund

It is commonly said that investors only fund 1% of pitches they receive. What they don’t tell you is how widely this varies throughout the life of your startup and across different funding rounds.

According to Dennis Tracz, a serial founder and Entrepreneur In Residence at East Carolina University, angel investors only fund around 1 out of every 400 pitches. Those are far slimmer odds than 1%.

On the bright side, these odds can get dramatically better in later VC rounds. Especially as you build out your network, credibility and prove your company.

Remember, these are pitches given, not just contacts or emails sent out.

Number Of Pitches Delivered In Order To Get Funded

From the founder side, it can take dozens and even hundreds of pitches and actual investor meetings to secure that first lead investor. Things get a lot easier and accelerate after you get that first yes. Though these are the types of numbers that even the most successful startups and founders have to put up to get funded.

Be mentally prepared for this. If you are not you will probably give up too soon. There is no reason to get discouraged. It is just a numbers game. The more noes that you receive, the closer you should be to a yes.

Just make sure you also keep optimizing your pitch and campaign and are iterating your pitch deck to boost investor conversions. And ensure you include the most interesting facts and data around pitch decks.

The Average Length Of Time It Takes To Close A Fundraising Round

TechCrunch reports that it takes an average of 12 and a half weeks to close a Seed round. Yet, Dennis Tracz says that most startups give up fundraising after just 6.7 weeks of running a campaign.

If they would have just kept on going a little longer they could have landed that financing and made their venture a reality. You don’t fail until you quit. So, don’t quit. Keep going, keep reaching out, and improving.

It’s worth mentioning that a lot of entrepreneurs find it takes even longer than this. The better your deck is, the shorter this timeframe can be. Though don’t just give up after 12 weeks either.

Some have spent a year or more raising their first round. Of course, getting help upfront can make all the difference in how much time you spend on this phase too. Time is money, and time can make a big difference in your competitive edge and the viability of your idea.

Investors Spend The Most Time Viewing These Three Slides

According to TechCrunch investors spend the most time viewing these three slides:

We can assume this means they consider these pages the most important to them and their investment decision.

It is worth noting that they spend more than double the time on the team and financials slide than the solution slide.

Only 58% Of Successful Pitch Decks Include A Financials Slide

According to Slidebean, less than 60% of successful pitch decks include a financials slide. That’s interesting given how much attention investors give this slide when included.

It is true that new startups may have no existing financials to report. As well as investors knowing that all of the best-laid plans and projections are likely to change dramatically in just a few months.

However, using this slide to forecast financials anyway can have great benefits. It allows you to create the narrative and story and demonstrate the returns possible.

Rather than having investors make their own guesses. It is your opportunity to demonstrate the value. And this you can do by including all the interesting facts and data around pitch decks

More than this, it proves to investors that you’ve really done your homework, know your space, and are not just making up overly bullish numbers to sell them. It is more of a test of your character and effort, than what the actual numbers are and how big your projections are.

This shows up in data points like profit margins, sales volume, customer acquisition costs, etc.

How Much Time It Should Take You To Deliver Your Pitch Presentation

Again, it was Guy Kawasaki who said your pitch presentation should take no longer than 20 minutes to deliver. This is true even if you have an hour time slot.

If you have an hour pitching slot, this gives you 20 minutes for introductions and to overcome any technical glitches and still be able to give an effective visual and verbal presentation.

It then allows you 20 minutes for an engaging Q&A session to fill in any gaps, and overcome any objections, and come to a powerful closing. If your verbal pitch is any more than 20 minutes you are going to have to sacrifice somewhere, and you don’t want to do that.

How Much You Can Expect To Raise In A Seed Round

Funding rounds are getting bigger. Startups are also raising more rounds.

According to data from Crunchbase around 48% of Seed funding rounds raised more than $1M from 2018 to 2020. In fact, 6% of startups raised more than $5M in their Seed round. Almost three times more than in the previous three year period.

There are many variables, but do be sure you are watching the competition and are benchmarking against recent relevant rounds when you begin strategizing your next round. Including interesting facts and data around pitch decks will give you that important edge.

How Much Each Pitch Deck Slide Is Worth

If your startup is raising a $2M seed round with a 10 slide deck, each one of those slides is worth $200k to you.

If you are raising $20M, each slide is worth $2M to your company, and so on.

How Much A Good Pitch Deck Costs

The average cost of a professionally created pitch deck can run from $1,500 to $50,000. That’s just likely to go up too. Fortunately, if you are bootstrapping without a penny to your name then you can also use pitch deck templates to get started as well.

However, even if you paid $20k per slide, and it landed you $200K per slide in the capital, that’s really a 10x return on your investment. If you raised $20M, that would be a 100x return.

Worth thinking about.

How Many Serious Startup Entrepreneurs Are There?

The Dealmakers Podcast details the journeys of the most successful founders and fundraisers, and their tips and already has more than 1M downloads.

You are up against some serious competition. You can make it, but you need to learn and prepare and master the pitch deck more than ever before if you are going to stand out and convert the best investors. And the one way to make that happen is to get maximum traction by including interesting facts and data around pitch decks.

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.

I cover interesting facts and data around pitch decks in the video below.

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FULL TRANSCRIPTION OF THIS VIDEO:

Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about interesting facts and data around pitch decks. Before we get started, make sure that you hit that Subscribe button and this way, you will never miss out on any of the videos that we roll out every week.

Are you ready to raise capital? Pitch decks are the ultimate document that investors are going to look to review. In today’s video, we’re going to be talking about the different facts, the different data, what goes in successful pitch decks, what goes in pitch decks that fail, and you can use that data and facts to compile better your slides and to optimize for those chances of being successful and getting that money in. So, without further ado, let’s get into it.

Before anything, let’s talk about what pitch decks are. A pitch deck is ultimately the form of presentation that investors are going to expect in order to review and understand your business and to consider a potential investment. Those pitch decks are between 15 – 25 slides in terms of length. They are slides that combine images and text and that follow a certain flow and structure like cover, problem, solution, and so forth, in order for them to get what you’re up to. That’s pretty much it.

Typically, you would put the pitch decks into Google Drive or into Dropbox, and then you grab that link and share that link with the investors so they can review the slides in a very easy and concise way. 

There are over 1,000 pitch decks being created every day. To give you an idea, that’s a crazy amount because venture capital firms only invest in 1,500 companies every year. Think about the amount of pitch decks that are being created and only a small amount of companies that end up receiving an investment, a first-time investment from those venture capital firms. It’s almost none. Again, really standing out and putting a compelling story are going to be absolutely everything to capture the attention and to move, touch, and inspire the investors with your story.

So, 10 slides are what are going to essentially determine for you to get money. You don’t need to go the lengthy route. Just create 10 slides. You can put the cover, the back cover, and maybe you can get up to 15, but those 10 slides where you’re covering the essence of the story, you really need to nail it. The other slides that you may add on top of those 10 could be to dress it up, to create a nice wrapper around the story, and your packaging and positioning. But, again, you need to be very clear and very concise and have a very nice balance between the images and the text that you’re adding as part of the pitch deck.

In terms of font size, the best font size is 30 points. This is what people like Guy Kawasaki are recommending. You want to follow this direction because you want to have a nice font size because the investor is ultimately going to be skimming through the presentation. They’re going to be reviewing super-fast, so you want to allow them to go and read your pitch deck super-fast, and they don’t have the time to go word-by-word slowly, so make it easy for them to review your document super-fast.

Typically, investors only spend two minutes and 41 seconds, 2:41, per presentation. That’s it, so that’s why when I say that investors are really skimming through your presentation, they actually are skimming through the presentation. So, you only have 2:41 – that’s it! That’s the amount of time that is going to determine whether you are or you’re not going to get that introductory meeting to be able to sit down and pitch to them.

Typically, investors only invest in 1% of the pitches that they receive. To give you an idea, in venture capital firms, they probably are going to see 400 pitches, and out of those 400 pitches, they would only invest in 1 out of those companies. That’s it, so it’s a very small chance, and for that reason, not only do you want to make sure that you’re putting all that packaging and that pitch deck in a very powerful way, but you also need to make sure that you get a nice warm introduction that is going to push your pitch deck to get in front of the person and the decision-maker so that you are getting closer to getting that money.

One hundred is the number of pitches that you’re going to be delivering in order to get just one single investor. That’s pretty much it, so the odds are against you. It’s a numbers game, and you need to pitch as many investors as you can, and obviously, as many investors that are related to your business because if you’re in fintech, you’re not going to go and pitch an investor in healthcare. They have nothing to do with your space, so you need to optimize the chances. You need to optimize your time, and for that reason, you need to only go after investors that have a desire in opportunities like the one that you have.

Twelve weeks is the average amount of time that it takes to close a seed round of financing. That’s it, and that’s from the beginning all the way to close. If it’s taking more than 12 weeks to close the round of financing, then something may be fundamentally wrong, whether with your business, with your story, with what you’re pitching, and that’s the reason why you may want to close it up, and if you don’t have the money by then, then you need to go back to the drawing board and reflect back on what have been some of the concerns that you have been hearing from investors. And then tweak and redo whatever you need to do in your story so that you can go back at it again in a little bit of time.

Investors spend the most amount of time on the team, on the financials, and also on the competition. Those are the three most important slides, and according to data, the ones where investors spend the most time reviewing. Again, the team: you want to make sure that people are able to understand why they should invest in you and your team members versus investing in another team. Here, you want to make sure that you’re putting front and center the capabilities, the expertise, the skillset, and some of the accomplishments that you’ve done in the past, as individuals, that coming together makes this thing incredibly powerful.

On the financials, instead of putting a screenshot from your financial model, you want to break it down, and you want to add beautiful graphs. Please, spend the extra time and maybe extra money. Get a freelancer to help with the design so that investors can digest very easily how money is coming in, how money is coming out. That’s going to come a super-long way.

Then, on the competition, you want to create a matrix-type of thing with Y-axis, X-axis, and yourself on the top right, and everyone else across the different quadrants. Essentially, don’t leave anyone in your market out because then people are going to think that you’re trying to hide some of those competitors. That’s why you want to put everyone out there that is competing directly or indirectly against you in a way where people can see it, can acknowledge it, and appreciate where you’re at and what makes you different from everyone else.

Only 58% of pitch decks that are successful include financials. This is a crazy stat because you’ve got to remember that financials are essentially the slide or slides that investors spend the most amount of time reviewing. The fact that only a small percentage, not 100% of them, include financials. That means that if you were to just include the financials, that’s going to be putting you far ahead of everyone else.

Remember that as an entrepreneur, you are going after the same dollars as other entrepreneurs. Once that money is invested, that’s it. That’s it because a fund, especially a venture capital firm, is not going to be investing in a competing business. You want to be able to optimize your chances so that you can get that money quicker than potentially a competitor that also wants to pitch that same venture capital firm. Again, try to have the financials. Put them in a way that they can appreciate them, that they can digest them super-easily, and that’s going to be giving you a nice edge when it comes to potentially securing the money.

Twenty minutes is the amount of time that it should take you to deliver your presentation. If you’re being asked and invited to present your pitch deck, you’ve got to allocate at least 20 minutes. If you have about 20 slides, that’s about 1 minute or so per slide. There are going to be some slides where you’re going to be spending the most amount of time versus others of not so much time. 

Again, the three most important slides, as we said, are the team, the competitors, and the financials. So those are the three slides where you want to allocate a big chunk of those 20 minutes. Maybe you can reduce from other slides, like the cover slide or the back-cover slide, and the thank you slide. Optimize for those slides where you know that there’s going to be full attention when you’re presenting.

Between $250,000 and $5 million dollars, that is what you should expect to receive if you’re at a seed round or at a Series A round of financing. When you’re going out to raise money, and you’re at an early stage in those two financing cycles, you should expect to fall in that range in-between. Obviously, there are going to be exceptions, and I’ve seen super-big Series A rounds. But typically, it goes from $250,000 when you’re starting at a seed round all the way up to a $5 million round if you’re at a Series A.

$100,000 could be the amount of money that each one of your slides could be worth because if you’re putting together a pitch deck that is 20 slides, and you end up raising a seed round of $2 million, which is what the norm is right now, the average that is raised on the East Coast or the West Coast in the U.S. That means that each one of your slides is $100,000. That’s why you want to spend the time. You want to be mindful. You want to make sure that you’re putting your best foot forward because, at the end of the day, each one of those slides is going to justify the time that you’re allocating on it if you’re able to secure that round of financing.

Between 1,500 and $50,000 is how much a good pitch deck could cost you if you’re getting a professional to help you on it, and we actually do this type of work at Panthera Advisors. So if you need help, just shoot me an email, alejandro@pantheraadvisors.com.

Again, consultants and advisors are going to be charging you about that much, and I think my suggestion is that internally, there’s so much that you can do. Your main focus should be on the business. Obviously, fundraising is a steep learning curve, so I think that it doesn’t hurt to get outside help to help you put together your deck.

You’re competing with a lot of other founders, so having access to those stats and this data is going to allow you to understand how you can optimize your time and how you can make things better.

Hit a Like on this video. Leave a comment and let me know if you’ve heard of other data points or data that should be interesting to share here with the community. Then also, Subscribe to the channel so that you don’t miss out on all the videos that we’re rolling out every week, and if you’re raising money, shoot me an email at alejandro@pantheraadvisors.com. I would love to help out. Thank you so much for watching.

 

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Neil Patel

I hope you enjoy reading this blog post.

If you want me to help you with your fundraising, just book a call.

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