Your guide to building the right pitch deck for startups
Preparing for your first round of funding as a start-up company is a difficult and thorough process. This round of funding is known as the Pre-Seed or Seed round and will be the first true capital raised from investors not being from friends, family, or crowdsourcing. With these funding rounds comes the vigorous task of convincing investors that they should trust and invest in your business. This stage is a little less finance and metrics, and more vision that you must convey in order to sell to investors effectively.
In order to portray your vision, there are certain documents that must be prepared for investors. The first and arguably the most important is the pitch deck. A good pitch deck for the pre-seed to seed-stage is between 10-15 slides and will include the following:
Name of company and logo: Include general and important information about the company, the product or service, slogan, and the elevator pitch.
Problem: Many investors enjoy the problem-solution type of framework thus, the problem will always be discussed in the pitch deck. The problem includes how potential customers are suffering, what is going on at that time in that specific market and why it is not working. The timelier the problem is at the time of the presentation, the better.
Solution: The solutions slide will explain how the company will be fare against the competitors, how it will save the potential clients or customers time, money, etc.
Product/ service: Nothing is more powerful than a demo. A demo shows that the company has built something that works, and to see that in action and buy into the solution.
Market size: This slide will give an estimate of the size of the market the company is entering. Venture capitalists are primarily interested in investing in large opportunities so it must be shown the company is pointed at a big market and built to scale to that market.
Competition: Competition is inevitable, and they must be identified and educated about competitors. The best VCs like successful competitors, because it helps validate that there is a market for the solution.
Go to market plan: Creative and novel approaches combined with things that investors have most likely seen work before are the key to winning this section whether you are using a sales team, partnerships, online marketing events, or a mix.
Financials: The basic questions you need to answer are how much money does the company need, how far out will that money take you, when will revenue be generated? You will want to show that you have a roadmap calculating how much you need to get to the next round of funding which will most likely be a Series A. An appendix may be needed with additional docs in case there are questions.
Exit opportunities: Some seed investors do not want to talk about an eventual exit, some do. In any case, the point should still be made that when the company is successful, there will be companies that will be interested in acquiring the company.
Team: It’s important to introduce the team with bios and pictures to help the investors identify them and know who else they will be investing in.
Examples of progress: If it can be shown that there are already clients, revenue, etc., it is much more convincing to investors. Anything you can think of to show that what is being done is working, that it is legitimate, and that it is a market that others are getting into so that the seed investors want to be a part of it. The purpose of this section is to leave the investors with a lasting feeling that it is safe to believe in your vision and with a feeling of urgency that it is happening with them or without them.
In addition to a strong pitch deck, be sure to polish the cap table to show who will own how much of the company. This is one of the most important documents needed in the first funding meeting. What an investor sees, or does not see, on the cap table will make or break the chance of seeing a term sheet. It’s highly encouraged to hire a CFO for the process of funding, creating a pitch deck and other necessary documents, and communicating with investors. A CFO brings a substantial amount of trust to the financials and the company in general to investors.