What is the best pitch deck for seed rounds? In other words, what is the best formula for a seed round pitch deck?
The Seed round is one of the most important fundraising stages for startups. This is a pivotal moment that can make or break your startup. Getting funding at this stage will make all the difference in giving your venture the fuel it needs to become a true, fast-growing startup with big potential, versus just another small business attempt.
It may mean all the difference in whether you survive past this point. How efficiently you are at raising a Seed round will also dictate your survival, the shape of your business after the process is complete, the terms you can achieve, and the investors you are able to bring on board.
So, what are the keys to most successfully raising a Seed round for your startup? How would you identify the best practices for great Seed round pitch decks? What slides do you need to include? What do you do with it once your deck is polished?
The Ultimate Guide To Pitch Decks
Here is the content that we will cover in this post. Let’s get started.
- 1. Seed Rounds For Startups
- 2. Preparing For Your Seed Round
- 3. Investor Expectations
- 4. Investors
- 5. Use Of Funds
- 6. Seed Pitch Decks
- 7. Steps To Building A Winning Seed Stage Pitch Deck
- 8. Gather Your Data
- 9. Identify Your Target Investors
- 10. Choose How You Will Design Your Pitch Deck
- 11. List your Slides
- 12. Overriding Principles Of A Successful Seed Deck
- 13. The Best Pitch Deck For Seed Rounds
- 14. Cover slide
- 15. Problem slide
- 16. Solution slide
- 17. Market slide
- 18. Product slide
- 19. Traction slide
- 20. Team slide
- 21. Competition analysis slide
- 22. Financials slide
- 23. The ask slide
- 24. The Data Room
- 25. Putting Your Deck To Work
- 26. FULL TRANSCRIPTION OF THIS VIDEO:
Seed Rounds For Startups
This is when the first meaningful outside money often comes in for a startup. It’s seeding the company to really get going. Getting the financial start and fuel to really have a chance, and to have a chance to do things well.
These rounds can range from as little as $10,000 to tens of millions of dollars.
Experienced entrepreneurs seem to be increasingly skipping the pre-seed round, and are bootstrapping up to a larger Seed round, where they have more power in raising from investors.
Though as a brand new, first-time entrepreneur, you may need a pre-seed, and benefit not only from the financing but the investors and credibility an earlier round can provide.
Preparing For Your Seed Round
Unless you are a serial entrepreneur with a few big rounds and startup exits under your belt there is a lot of work to do. You need to build your credibility, network, get introductions, build relationships, and work that marketing and PR. and, you’ll need to devise the best pitch deck for seed rounds.
At this stage investors expect you to have done sufficient research and have enough data to warrant pursuing this and taking up their time to listen to you. They also know that it is early days, there is going to be a lot of iterating ahead, though you’ve also done a lot of the groundwork already.
They are looking for validation of the problem. That you are in a really big space with lots of room to provide super-sized returns, and that you have the best team to bet on in this race.
Perhaps most importantly, they are looking for proof of execution, ability to push progress, and that you understand the startup game and future raising and exiting as much as your field of business. This is what will serve their investment well.
Types of investors can vary widely at this phase of the fundraising game. They may consist of individual angel investors, startup accelerators, college grants, and even big well-known VC firms.
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Sometimes you just need the money. Though repeat founders who don’t even need the cash often use this fundraising opportunity to simply bring in great investors for their experience, credibility, connections, and other resources.
Use Of Funds
Common and typically acceptable uses of funds from a Seed stage round may include completing your MVP or enhancing the current initial product. To make high-quality hires to round out the team on the development and operational and marketing and sales sides.
Most importantly, this round is about getting the capital and financial runway to achieve the milestones you need to cross off to qualify for a strong Series A fundraising round.
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.
Seed Pitch Decks
Pitch decks are really the number one factor in closing and acing this round of funding.
Far more important than the idea, product, sales, revenues or profits, and your resume is how it is all told in the pitch deck. It is about storytelling and presentation.
Overall this is a lightweight pitch deck. It is sales material. A brochure if you will. It’s about standing out to grab their attention and powering them through to taking instant action.
It is not about wowing them with your technical genius, beautiful code, or inner workings of your product.
Keep these factors in mind when designing the best pitch deck for seed rounds.
Steps To Building A Winning Seed Stage Pitch Deck
Where do you start with creating a successful pitch deck?
Gather Your Data
Get all of your information together. Gather all of the facts. Refresh your market research and competition analysis. Make sure you have all of this at your fingertips when you need it.
Identify Your Target Investors
Just as with your product and getting to know your customers intimately before writing a line of code or crafting a single ad, you want to make sure you know your investors before attempting to create a single slide.
You may even want to know your ideal investors far better. After all, they are the gatekeepers to the gold that will allow you to serve your customers, keep your employees, and realize the full potential of this venture.
Who are they exactly? Who are they as individual humans? What makes them tick and invest, or not?
Choose How You Will Design Your Pitch Deck
How will you create the best pitch deck for seed rounds? Who will build your Seed round pitch deck?
The simplest hack for pitch deck creation is to use a proven pitch deck template. One which is recommended by active fundraising consultants and investors. It takes out all of the guesswork, and will dramatically slice the time burden, while greatly increasing your odds of success.
You may create your deck yourself. Especially if you have a good advisor, some strong design skills, copywriting and sales talent, and plenty of free time.
Or you may find it more efficient and effective to hire a design agency, or freelance writers and designers to get it done professionally and expediently.
If you will design it yourself, then you also need to pick which software you’ll be using. Microsoft Powerpoint and Google Slides are two of the most commonly used.
While Powerpoint may have a little more depth, Slides may be much more agile in today’s world. It offers a lot of integration and collaboration and enhanced productivity capabilities, without the distractions.
List your Slides
Create the framework for your deck, by listing out the slides you will use before getting started filling them in. This will help ensure that you stick to a tight slide count, and focus on getting the right data boiled down on each slide.
Overriding Principles Of A Successful Seed Deck
The guiding principles for creating a pitch deck that gets funded should include:
- Demonstrating focus
- Establishing credibility and capability
- Conveying the attractiveness and fit of the investment
- Compelling real action
Even as you’re creating the best presentation to raise financing, you would also want to plan how to crush it with your pitch deck on demo day.
The Best Pitch Deck For Seed Rounds
Start well, with an attractive cover slide. Include your company name, logo, slogan, and contact information. This slide is the key to getting them to swipe through and view the rest. It should also make it easy for them to get right in touch with you when they come back to look up your presentation again.
You can fail at getting just about everything on the first try, but not the problem. This is the real foundation of your venture. Many successful entrepreneurs have stuck out and even raised money just based on the problem they want to solve alone.
Make sure it is strong, painful, urgent, and big. Even better if people are already seeking out and paying for a solution to it. Be sure you really, really understand it and have verified it.
What are you doing to solve this problem? What’s the big idea?
How big is this market? Is it growing? By how much and in what time frame? Use a strong visual diagram to display the size of this market, as well as your anticipated slice of it. This is a critical facet of the best pitch deck for seed rounds.
At least 50% of this slide should be visual versus text. For your text, use a simple tagline and up to three bullet points layout out the most significant benefits. Use images of your product.
Preferably in action by your target customers in a real-life situation. Screenshots and images of prototypes are also acceptable if you don’t have sales or a completed product yet.
How much progress have you made? If you haven’t started sales, then what milestones have you checked off? If you are closing customers and sales, investors want to know how fast you are growing.
This is incredibly important to them. The growth rate is more important than sales dollars or profits at this point. Investors want to see that hockey stick-shaped graph on this slide.
Use this space to show off how great your founding team is. Use headshots and one-line bios and titles for each cofounder.
You can augment any missing skills or credibility by including notable advisors you have brought on board already. This may also include credible board members which you picked up during pre-seed rounds.
Competition analysis slide
This is where you can plot how you are better than the competition. You will have competition. Use this to your advantage by positioning your startup against them, rather than trying to ignore or hide them.
This is best displayed as a visual diagram. It can sometimes be especially useful to not only position against famous brand names but other startups which have raised significant capital at your round from notable investors.
Presenting this information accurately is an essential feature of the best pitch deck for seed rounds.
You probably don’t have much in the way of revenues or historical financials to report at this stage of fundraising. Use this space to focus on the forecast of what you will achieve over the next 12 months, and then three to five years out.
Keep it simple. Show you know your industry and math, but don’t distract investors here. Use a simple spreadsheet-style table with just a handful of rows of data.
The ask slide
Here is where it all comes together. Be sure you have done your homework and are not asking too little or too much given the current landscape, your stage of business and the check sizes your target investors are handing out.
What may be most important on this slide is your use of funds. Use three bullet points to list the categories where you will put their capital to work for the best returns. This may include making important hires that will increase your competitive edge in this space, completing development or the latest iteration of your product, unleashing your go-to-market plan, and scaling your marketing and customer acquisition efforts.
The Data Room
Instead of trying to cram more info onto your slides or more slides in your Seed round pitch deck, put your additional data and supporting documents in a virtual data room in the cloud.
Pass out links to this folder, and your pitch deck, instead of trying to send any of these documents as attachments. Other info in this folder may include investor updates, extended versions of your deck, business plan, and marketing plan.
Putting Your Deck To Work
While your Seed pitch deck can have personal and internal uses, it isn’t going to help you put a single dollar in the bank until you start putting it to work. Practice your pitch, test it and get feedback.
Then begin connecting with investors on Linkedin, through advisors, by sending emails, networking, and applying to pitch opportunities and startup accelerators. Make sure you present the best pitch deck for seed rounds.
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.
In the video below The Best Pitch Deck For Seed Rounds I cover this topic in detail.
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FULL TRANSCRIPTION OF THIS VIDEO:
Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about the best pitch decks for Seed Rounds. 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.
Seed Rounds of financing are essential. They are the very first round of financing that you’re going to be getting for your startup, from outside capital, from investors. In today’s video, we’re going to be breaking it down for you so that you get a good understanding as to what is going to be the pitch deck that you’re going to require to put together to come out with a bang, to convince those investors and to get that money in the bank. So, without further ado, let’s get into it.
First and foremost, what are seed rounds? Seed rounds are any round of financing before a Series A. Series A rounds are, in a sense, the very first institutional round that you’re going to be doing with your business when you have venture capital firms, private equity firms investing. Anything before that is a seed round. It doesn’t matter if it’s pre-seed or micro-seed; it’s still a seed round.
Seed rounds typically go anywhere from $250,000 all the way up to $2 million, and the valuation is all over the place where you’re going to sometimes have an equity round, where you’re pricing the round, and that could be anywhere between $3 million all the way to $10 million. In essence, what you’re doing, and what many people are doing, is using a convertible note or a safe note, which is taking the money in some form of debt that would convert later on into equity ownership. That’s, essentially, a seed round.
Now, in a seed round, typically, the investor is going to be more interested in the founding team in the roadmap that you have. It’s not so much about historicals, what you’re doing, and where you’re coming from. It’s all about the future, and it’s about possibilities. That’s what you want to capture in the essence of your story and also in the pitch deck when you are putting it together for your seed round.
The investors that you’re going to go after when we are thinking about a seed round and who those investors are who are going to be reviewing your pitch deck. And, by the way, when it comes to pitch decks, you should download, below, the pitch deck template that entrepreneurs are using all over the world to raise millions so that you don’t start from scratch.
In essence, the investors that you’re going to go after are going to be angel investors. Those are individuals that are senior executives that qualify as accredited investors. That is someone who is making over $300,000 a year, with their spouse, or that has, without counting their residence, $1 million in assets. That’s typically in the U.S. Otherwise, the investor can’t invest in the company; he’s not an accredited investor.
The other ones that are going to be investing at a Seed Stage could be angel groups, which is a collective group of people. There are some of those former groups like the Houston Angel Network, the New York Angels. Those are angel groups that invest in Seed Stage companies. The other ones that you’re going to go after are venture capital firms and micro-venture capital firms.
Typically, my recommendation is that you shy away from venture capital firms at a Seed Stage because you still don’t have the wheel already turning, that wheel that venture capital firms like. So, if you need to pivot the business to adjust to whatever the market is telling you, you may run into the problem that it could be a turnoff for that venture capital firm, and if they don’t reinvest in your next round, then that is going to send a negative signal to the market, and that could leave you to die. So, that’s why I always try to recommend to shy away from those institutionals, from those VCs, and perhaps go more the individual route, where they’re going to be more flexible, and they’re going to be more understanding in the event that you need to change your business model.
Typically, the money that you’re raising from a Seed Stage financing round is going to be allocated for hiring more employees, more team members to get that leadership in place. And then also to create the minimum viable product, what is called the MVP. That could be for creating your product, for creating your service, but that prototype that you want to put over on the market so that you can start to get some validation and some feedback from customers and potential customers that you can use in order to optimize whatever you’re doing that is going to get you to the next round of financing, which is the Series A, which could happen 18 to 24 months from the time that you close your seed round.
Seed Stage pitch decks ultimately could be seen as a brochure. They’re going to be between 15 to 25 slides, and that’s it. Obviously, you want to have the right type of flow, the right type of structure and in a way which is compelling, so it needs to be gradually getting the investor excited. You don’t want to start with a bang at the beginning because then it’s going downhill from there.
It’s like a story that you’re sharing that ends with a very powerful end that is going to trigger more meetings, or that is going to trigger more questions because, at the end of the day, more questions that you get to address, more concerns that you’re also able to put out of the way. When there are no concerns is when the money is in the bank, and that’s why and what you want to go after.
Next is gathering all your data. Before you even go into preparing the pitch deck, you want to gather all the data; you want to understand what will be those key pieces of information that you’re going to be including in your presentation, whether it’s metrics, whether it’s milestones, but you need to have those in a way that they’re accurate and in a way that you could validate those whenever the investor is asking you. Or you need to go into due diligence, which is validating whatever claims that you’re making.
Now before you’re even sending your pitch deck or even thinking about the pitch deck, you want to understand who those investors are going to be. Typically, the investors that you’re going to go after, you’re going to do so because they are checking the mark on the investment thesis that goes with your opportunity, whether it is your geographic location, where you’re located. So, obviously, if you’re in Europe, you’re not going to go after investors that are investing in the U.S.
Also, the other thing that you’re going to go after is your segment. If you’re in healthcare, you’re not going to go after investors that are investing in fintech. The next is the financing cycle. If you’re going after seed-stage investors, depending on your ticket size and valuation, you’re not going to go after Series A or Series B financing rounds type of investors because it’s going to be outside of their investment thesis and mentality. Again, you want to make sure that you’re gathering that list, those people that you’re going to go after, and you can use tools, as I have mentioned many times, like Crunchbase, Mattermark, and PitchBook.
Next, you want to choose how you want to design your pitch deck. You definitely want to use a nice balance between visuals as well as text because when it’s too texty, it’s going to be overwhelming for the investor. Remember, investors only spend two minutes and 41 seconds (2:41) reviewing those pitch decks based on data. That’s it. They’re literally skimming through the presentation, so you need to put the presentation in a way in which the flow is super nice when you’re skimming through it, and right away, they’re going to get what you’re doing. That’s why, as they say: an image or a visual could be worth a million words.
There are many principles that identify and define a super-successful pitch deck. For example, on our Inner Circle, which is the fundraising training, where we help from A to Z with raising capital, you would see in there—and, by the way, you can see it on the link below this program. In essence, you can see there some of the successful pitch decks of startups today that went IPO, where, back in the day, they were doing their seed round, their Series A, as great examples that you could use as a form of inspiration.
In any case, the key factors to keep in mind that determine the success of a raise based on your pitch deck are the following:
- Demonstrating Focus
- Establishing Credibility and Capability
- Conveying the Attractiveness and Fit of the Investment
- Compelling Real Action
In terms of structure, you need to nail it! And the structure of your pitch deck, the one that you want to follow, is going to be the following:
- The Cover Slide: Which is where you put your contact information or where you put a super beautiful picture of what you’re doing.
- The Problem Slide: Listing what you’re facing.
- The Solution Slide: What you’re bringing to market and what the gap is that you’re covering.
- The Market Slide: Here, you are talking about how big it is and how it’s growing.
- The Product Slide: Maybe you can introduce some screenshots of what you’re doing.
- The Traction Slide: Some of the metrics. You could talk about revenue, customers, and whatever that is, that is going to put you in a good spot.
- The Team Slide: Here, you’re going to be adding some nice pictures of the team, and you’re going to be talking about the key accomplishments of each one of you.
- The Competition Analysis Slide: You can put it in as an axis and list all your competitors, and put yourself in a place where they can see you in a Blue Ocean Strategy.
- The Financial Slide: Here, you’re going to be showing your projections and how you’re growing over time on the numbers.
- The Ask Slide: How much are you raising? It’s probably better here to go with a range.
- The Thank You Slide: Obviously, don’t forget your contact information here.
When you are grabbing your pitch deck and sending it, you need to be very careful because the last thing that you want is to have a massive document as an attachment that is going to forbid people from opening it. One thing that you could do is literally use a Dropbox or a Google Drive, where you’re placing your presentation in there, and grabbing a link, and sharing that link because that’s going to help you from landing in spam filters or anything that could prevent the investor from seeing the pitch deck.
So, hit a Like on this video. Also, leave a comment and let me know the way that you’re thinking about your seed round. And also, Subscribe to the channel so that you don’t miss out on all the videos that we’re rolling out every week. Then, if you’re raising money, send me an email at [email protected]. I would love to help you with your fundraising efforts. Thank you so much for watching.