November 2, 2018
Creating An Investor Pitch Deck
Pitching potential investors is a pretty involved process. It can be nerve racking but it doesn’t need to be. Entrepreneurs often get so focused on the opinion of the investor because they are focused on receiving cash for their business. This creates increased stress and pressure on the entrepreneur to say “the right thing” to impress the investor. It really shouldn’t be about impressing anyone rather it should be about laying out the plan for your business and finding people who buy into the vision of the business. The way you share the plan is through a properly developed presentation.
Developing a presentation is a combination of the PowerPoint and what you say. The PowerPoint provides the visuals to support the story. In the initial presentation you are not trying to get the check you are trying to generate interest. Get the prospective investor talking and asking questions so you know where they are coming from and both of you can determine if creating a business relationship makes sense.
Having a good presentation deck is really important. A good slide deck will emphasize your important points, keep you on track, show that you are serious and should be taken seriously.
Here is a good general format for your presentation. This is 10 slide format to will allow you to hit the key points of your story in an way that speaks to investors.
Title Slide: This is where you start the presentation. Put the logo and company name on the slide and give a quick description of the company and what you are asking for. Not much detail here just get the ball rolling.
Problem: Describe the pain you are alleviating for your customers. This is probably the most powerful slide in the presentation for getting the audience to understand the business. This example should be real world, clear, easy to understand and free of technical jargon.
Solution: If you did the Problem slide correctly the Solution slide should follow right along. This slide should show how your solution solves the customer’s pain. Paint the picture in the investor’s mind so they can quickly get what you are doing. You don’t want the investor missing other parts of your presentation because they are unclear on what you do.
Business model: Now is the point where you start to explain how your business plans to make money. Talk about what you have done to date in building your business. Be clear about your target audience and why have you decided to target the verticals you have selected. Here is where you start to discuss how you plan to make money.
The advantage you have: Why are you different and better than everyone else? Now is the time to unleash the “secret sauce”. Whatever it is you feel will make you standout and be able to attract customers this is the section to show it. If your advantage is a technology change/improvement now you can begin to talk about it just be sure you don’t end up going down a rabbit hole that is going to derail your pitch.
Your Target Market and Your Marketing/Sales: Here you are going to discuss your market and your marketing/sales strategy. This will be key to getting investors to agree with your financial projections. You should discuss the size and penetration of the market you expect. This should be validated with both primary and secondary customer research data. Yes you will have to talk to possible customers to get this.
Important, to not forget to include your pricing. Don’t be afraid of this. The listener will be trying to calculate what will be required to happen for you to reach your financial projections so it is important that you tell them how this will happen rather than letting them make assumptions.
Competition: Hey guess what, there is competition for what you do. Be excited about it. Having competition shows that there is a market for your product. Show your competition on the slide and discuss what they do well, where they fall short and how your solution will be better. Also, show there is enough of a market available to buy your product even with the competition. Important note…Don’t bash the competition. Be respectful but show you can be better.
Management Team: This is all about your team’s ability to EXECUTE. Execution is the key to success. Most investors look at the the ability of the team to execute as more important than the product. Have you heard the adage that an “A” team with a “B” product will beat a “B” team with an “A” product? Know that the investor has heard it and believes it.
You need to convince the investor you have the team that can execute and will succeed. Saying it is not enough. You need to show why your former positions as well as your experience has equipped you to succeed.
Financial Projections: Again don’t shy away from this. You must be clear and the projections must make sense. Be super clear here. Justify your numbers. You need to know your numbers backwards and forwards to convince the investor that your numbers are real.
Current Status/Future Status: This is where you get specific with you financial ask. Show your use of funds and how that will drive the growth of the company. Talk about what the future looks like and what future funding rounds you expect.
You also get to talk about exit here. How are planning to get the investors money back as well as creating a massive return.Typically this is through an acquisition of the company. While you may not have exact date/time of your exit you do need to discuss exit options. Who are possible acquirers and when do you see this as potentially happening. Don’t hem-haw around. You need to show the investor that they can not only expect the company to succeed (which is about you) but also that they can expect a return in a certain time frame (which is about them).
- Appendix: Since you are only using 10 or so slides there may be other things that you want to have prepared. Having additional slides prepared beyond the presentation are for you to use to address possible questions you feel investors might ask. These are not part of the presentation and are not to be shown unless they would help in addressing a question. Note, don’t flip to these extra slides if the question is raised during the presentation (expect questions during the presentation by the way). During the Q&A post presentation use the extra slides when needed.
- Executive Summary: This would be a one to two page overview of your business plan. Lots of white space and bullet points. This should tie to the points being made in the presentation.
- Copy of the slides: I go back and forth on this but for purposes of an investor presentation it is good as it allows people to follow along and make notes on the pages. Be clear, people will jump ahead most likely to the financial slide. Don’t get rattled, just do your presentation.
- Always have a backup of everything: If something can go wrong it will go wrong and that is not good for a presentation. Always have a backup of the presentation on a jumpdrive. Have power cords, dongles to connect to the projector, an extra HDMI cord, etc. This is your presentation so it is on you to prepare in case something goes wrong.
Beyond The Deck
Seeking investors is a LOT of work. Typically it will take several months and many many presentations to get money.
Make sure there are people on your team focused on seeking the investment and people focused on running the company. This will allow you to be sure proper attention is given both to seeking the investment and to business operations.
If you go into presentations prepared, confident and relaxed knowing that this is about creating a team (you and the investor) who wants to see the company be successful and create value for the customers you will win.