What is needed for the financials portion of a pitch deck? What do you need to include?
The financials slide is one that investors will spend the most time viewing in a pitch deck. In fact, at least 10% of the total time they will spend on your pitch deck may be on a single financials slide.
That alone makes this a pretty important part of not just your pitch deck and pitch, but your entire fundraising campaign and business.
Plus, no matter how much you might want to gloss over it or prioritize showing off other parts of your venture, the decision to offer you a term sheet and fund your startup all comes down to a financial decision, and a financial transaction.
If the numbers just don’t work, it won’t work for them. No matter how much they may love you, your mission, or technology, and your passion for it.
The Ultimate Guide To Pitch Decks
What Financials Should Be Included In Your Pitch Deck
For brand-new startups with no operating history, the only financials of any meaning that can really be provided are essentially financial forecasts and projections.
This is a single slide, with a simple spreadsheet-like table. Supporting information can be provided by linking to and citing sources in your appendix.
As a startup that has already been in business, and has some activity, then you will have both a financial forecast slide and a historical and current financials slide.
Your introductory pitch deck to investors need not have any sensitive company information. You want to be able to share it as freely and widely as possible. You don’t want to cut off your chances of funding and turn off investors by trying to demand an NDA is signed before viewing it.
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Then you can provide all of the additional and official financial information that investors will need in your data room. Including tax returns, contracts, income, and balance sheets.
Perhaps the best way to evaluate what is needed for the financials portion of a pitch deck is to look at it from the investors’ perspective.
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.
17 Things Your Financials Slides Will Show Investors
Consider what information investors require, expect, and are looking for. As well as how they will view and evaluate the data you provide or hold back.
This includes the following.
1. That You Understand The Fundamentals Of A Real Business
There are countless wannabe entrepreneurs out there that are bombarding investors every week, but don’t really get the basics of a real business.
This is something that idea people and technical founders can really struggle with. An idea, invention, or great product concept alone does not make a business. It may not even make a decent foundation for a real business.
There is a huge difference between these things and real commercial viability. This may go a long way to explain all of the big companies with a lot of money, with not-so-great products, and worse service.
That’s not to say that you shouldn’t be dramatically improving things. The point is that you have to have the makings of a real business. Including knowing how the financials work and knowing your numbers.
2. That You know Your Industry
A few serial entrepreneurs have managed to leap from one industry to another and leverage their business experience to be successful in new spaces. This is extremely rare.
It is far more typical that someone who really has industry expertise will step up and build something great within their circle of competence and domain knowledge. After all, it can take a decade to really understand the nuances of many markets.
You can round out this expertise with a cofounding team that compliments each other’s skill sets and experience.
What is really important here is that you show that you have invested in doing the homework, know your industry benchmarks, and are basing your financial projections on reality, even if you are aiming to achieve what many think is impossible. That’s what you need to include in the financials portion of a pitch deck.
3. That You Can Make A Plan & Focus
What many entrepreneurs simply don’t get, and which dooms their fundraising efforts from the start, is that a pitch deck is largely about evaluating whether or not a founder can make plans, and focus. Most cannot. Yet, it makes all the difference between startups that are successful and not. It is easy to think big and wide. Being able to say no, and to prioritize and execute with laser focus is what turns startup ideas into unicorns and bigger.
So, keep your financial slides simple and fast to digest. Focus on what is most important; all of the other nice things and bonus features can be what you overdeliver on later.
4. You Have A Plan To Generate Revenues
Having revenues, sales, or profits is not necessarily a prerequisite for funding with some investors. However, they do want to see that you are thinking about the money, and have a plan and path to revenues.
Again, this is a business. Meaning that it is about making money. The real core purpose is to make a profit. Before you can do that, you need to be able to make sales and generate revenues. Simply relying on fundraising forever is not really a concrete business plan.
5. How Much is Your Company Growing
In addition to your traction slide, your financials will show how much your company has been growing.
Positive growth is a huge deal for investors. They want to see that you can achieve it and maintain it. In spite of all of the challenges.
Your financial projections will show how much you are aiming to grow your company, and will paint a picture of what is possible, and what they can be a part of.
While these are only projections, you have to be on track to deliver what they are looking for, while retaining your credibility. This is one of the key components of the financials portion of a pitch deck.
6. You Know Your Breakeven Point
If you are not yet profitable and are losing money, investors will certainly want to know where your break-even point is, when you expect to reach it, and what it is going to take to get there.
Having a path to being self-sustaining is essential. Especially in turbulent economic times when capital markets may be changing, and there is no guarantee funds will be available, or it will be attractive to go public in the near future.
7. You Have A Path To Profitability
A real business is supposed to make profits. You should be on track to profitability and have enough profits to justify the journey for your own sake, and that of your team and customers. Regardless of what your investors’ priorities are.
Others will want to know how soon they can expect profits and returns of some level.
8. You Understand Your Unit Economics
While it can be a journey for new startups to find their way to a repeatable business model and scalable sales, with predictable revenues and finances, understanding your unit economics is vital.
Unless you understand these levers and their outcomes, you really can’t make the right investments and steer your business where it needs to be and to continue to survive and thrive.
9. How Much Your Customer Acquisition Costs Are
A significant part of your unit economics, the sustainability of your business, and how competitive and successful it will be is your customer acquisition costs (CAC).
Investors will be evaluating this to see whether this is good enough for them to invest in if you have enough of an edge, or whether they can bring a lot of additional value to your company by helping to improve this data point.
10. How Much You Are Spending On Essentials Versus Nice To Haves
Your financial slides will show investors what you are doing with the money.
Is it going into the highest returning activities? Or are you splurging on perks, unnecessary office rents, and underperforming areas of the business that are dragging you down?
If you haven’t been using the money you’ve already had wisely, they can’t believe that you are magically going to change your money management and financial discipline if they give you a lot more money.
11. How Well You Performed With Previous Capital
For investors, the best predictor of future performance is your past performance. Just like your credit report.
If you were able to grow your business by 10x with the last round you raised, then they can be confident that you can go even bigger with more capital.
If you just burned it all away going down the wrong rabbit holes, they should be very afraid of giving you free rein with a lot of new disposable cash.
12. Your Current Financial Position & Strength
Your financials show how healthy your company is right now. Investors will be able to figure out if this fundraising round is about desperately seeking a bailout before you have to close the doors, or if you are really ready to scale up from a sound foundation.
This tells investors how much power and negotiation control they have over you. If you are about to go broke, then you are going to have to take whatever deal they offer you. Or you’ll be out of business. If you are in a position of strength, then you and your team have more power to negotiate all the clauses that come with a funding agreement.
13. Burn Rate
This is how much money your company is burning through each month. Which relates to your financial health when compared to how much money you still have in the bank. As well as how well you are managing your money. That’s another datum you must include in the financials portion of a pitch deck.
Your runway is how many months you have left before you run out of cash. Or how many months of operating capital investors are willing to put in this round.
If your startup has yet to generate a cash flow, you’ll need more in-depth information on how to present financials for a startup with no revenue. Check out this video, where I have explained how to impress investors with financial projections and estimates based on real data.
15. Required Investment To Get To Next Milestones
The previous two points, along with what you plan to invest in next, say how much money is needed to be invested to get to the next stage where you can raise more funding. Or when you may hope to achieve an exit.
16. Projected Returns
Investors want to be sure that your forecasts are at least aiming for the level of returns that they are looking for. Which may include cash flow and dividends.
17. The Future Value Of The Company
Your projected trajectory and financials indicate how much the company may be worth in the future, along with its share of the equity.
What do you need in the financials portion of a pitch deck for your startup?
Depending on the stage of your startup, you may have tangible existing data to include in your deck or just financial projections of what you are aiming to accomplish with this funding in the bank.
What’s really important is understanding how potential investors will view this data. Know what information they are looking for, how they will evaluate it, and react.
Then you can craft the best possible pitch deck, and be ahead of the game when it comes to answering investor questions, and negotiating the terms of your funding in this round, and the next.
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.