Few things keep entrepreneurs up at night like pitch decks do. Founders often spend excruciating hours debating pitch deck design and ordering while giving short shrift to the fundamentals that keep the deck tied together and top-of-mind for investors.
What do investors look for most in pitch decks?
Below, we’ll list a number of key pitch deck components and explain why they’re essential to capturing investors’ attention.
It all starts with:
1. A clear problem and solution
The problem and solution is the central narrative of every pitch deck and is used to hook investors. These components can be on one or two slides, but they need to be in the first few pages of your deck to capture your audience’s attention.
Think about telling a story. The problem (expensive hotels and empty apartments in the case of Airbnb, for example) is the conflict and the solution (affordable lodging and secondary income) is the resolution. You want your investor to be able to easily understand and relate to the problem your business is addressing and the solution it’s offering.
You don’t need to cover every contingency in your problem and solution slide(s). You want to tighten your story as much as possible and communicate it with precision. The goal is to excite investors and start a conversation.
Investors will want to get involved with your company if…
- They have experienced the same problem in the past or know many people who have
- There is a clear sense of ROI down the line for them (exit via acquisition or IPO)
- They understand the problem and solution given their professional expertise (e.g. a doctor being pitched on a healthcare business)
You have your first investor if they fall into all three buckets. Here’s how PopSurvey clearly and vibrantly communicated its problem and solution.
2. Visuals. Visuals. Visuals.
The average length of a pitch deck is 19 slides, yet you’d be surprised to find out how easy it is to fill up those 19 slides and still feel like there’s much more to say about your company.
As tempting as it might be to get everything down in the deck, you need to be economical with your text and leave room for visuals. These plant an initial impression in the investor’s head and reinforce your problem and solution throughout the deck. Most investors take about two and a half minutes to sift through your deck, so your visuals will have to be distributed throughout the 19 slides, not at the end of a 40-slide behemoth.
What needs to be illustrated?
Start with an eye-catching logo and some clever, concise copy for your cover that states your value proposition. Why do you exist? Why do you do what you do? This will prime your investor audience for what’s to come and leave them with a visual fingerprint to remember your company by. Try leading and finishing with the value proposition and raison d’etre.
Also, visualize data throughout your pitch deck, including user acquisition, revenue growth, and operating expenses. This will show your investors that you spent time calculating these figures and didn’t manufacture them to look good in a pitch deck. Visualized data will also reinforce your narrative. Dwolla, for instance, used contrasting flowcharts to show (not tell) how difficult it can be to transfer money between traditional channels.
3. The product
Fundraising is done to speed up the machine, not to figure out what will work. This means that investors want to hear about a built-out product (even if it’s an MVP) and not one you’ll create when you have money.
When you get in front of them, don’t concern yourself with blowing them off of their feet. Investors hear pie-in-the-sky ideas every day — and they generally pay them no mind. Keep your product page(s) simple and always remember to tie them back to the problem and solution that got you here.
For example, Uber doesn’t just let you hail a cab from your smartphone because you want to get from point A to point B. Instead, it simplifies the often difficult process of finding a cab in major cities and areas without adequate taxi service or public transportation.
Once you reinforce how your product is a solution to a problem, leverage testimonials from established customers and visualize traction statistics. The traction slide can be the most important proof point in the entire deck. It shows investors that the problem is a real one and that customers feel that you’re an important solution to it.
Whether you’re illustrating registered users, acquisition strategy, user retention, or revenue growth, you always want to show investors at least a 10 percent improvement in any metric month-over-month.
Check out how Cadee shows user demand for its product.
Investors reviewing pitch decks spend 23 percent of their time on the financial slides, so it can be tempting to fill them with every figure and projection imaginable. You’ll want to steer clear of this bait, however. Investors aren’t interested in a barrage of numbers that are really just broad estimates. Instead, they seek honest projections (even if it isn’t hockey stick growth) and a thoughtful analysis of how you calculated them and how you plan to achieve them.
Start by visualizing simple data (such as sales, revenue, expenses, and user growth) and having an expert check it over. Once you’ve done that, work on contextualizing and explaining that information. What are your user economics and market size? How is your current traction tied to your projections? You always want your commentary to corroborate and elucidate your data, showing investors that you have a complete understanding of how your business runs.
Try using 1000 Angels’ Startup Investment Return Calculator to understand how investors will look at your projections.
Also, check out how YouTube kept its data simple and tied it back to user behavior.
5. The team
It can be easy to skip over your team members in a pitch when you only have a few minutes with an investor.
Don’t do this. It might shock you to hear this, but investors prioritize a slide about team members.
Why? Let’s assume you’ve convinced a group of investors that there’s a problem and you have the solution. They still don’t know why you’re the best people to implement that solution. Your job is to communicate why your team is personally driven to further this mission and vision. What in you and your team’s past experience has led you here? What makes you qualified to grow this company? Remember: Investors aren’t only investing in your product. They’re investing in your story and your team.
Check out how Mattermark sells its employees as part of its mission.
6. Market and competitive landscape
Founders love to think they’re entirely unique, but in most situations there are similar companies that have been around for longer.
That’s reality, but it’s one you can work with and even use to your advantage. Find comparable companies and their funding and revenues to show potential traction for your company and benchmarked valuations. For instance, use graphs to show how the market is growing. Then segue into stating your unique value proposition in a booming market. Illustrate this in a diagram that sets your business apart. A complimentary slide can bullet out your competitive advantages, such as IP, distribution channels, and partners (don’t be afraid to use logos!).
Check out how 300Milligrams illustrates market and competitive landscape.
Pitching is storytelling. You need to grab investors’ attention with a relatable problem and solution and illustrate how everything your product does is in service of solving the problem by implementing the solution.
For more comprehensive lessons on how to craft pitch decks and raise a round of capital, check out the Mastering The Fundraising Game online certificate.
- How to reach out to investors
- What questions investors ask
- How much capital to raise
- How to nail an elevator pitch
- How to compose the ultimate pitch deck
- How to avoid fundraising mistakes
- What to do after you raise capital
- Much more!