July 31, 2014 | 4-minute read (785 words)
One question I get asked often is “how do I craft a pitch deck that will get me funded?” A great deck is obviously only one element in getting startup funding, but it’s a crucial piece in instilling confidence in potential investors.
Your deck should be 10-12 pages max, with any supporting documents (financials, management bios, etc.) included in an appendix. Below, I’ll fill in the blanks with a slide-by-slide look at what your deck needs to include.
You can follow along with this Pitch Deck Template.
Download the template here: Pitch Deck Slides
Slides courtesy of Marc Phillips' fantastic book: Inside Silicon Valley: How the Deals Get Done (if you haven't read it yet—I highly recommend you order your copy now!!)
Mission — Create a brief and cogent one-sentence description of your startup’s reason for being.
Problem/Solution — Clearly define the problem your business exists to solve. What is the customer need? How do you plan to address it? Why is your product/service/approach better than the alternatives?
Market Opportunity — What is the market for your product? Who are your customers? Here’s where you describe the structure and dynamics (barriers to entry, intensity of competition, growth rates, and regulatory environment) before outlining and quantifying the size of the market. Make sure to distinguish between the total addressable market versus the segment your business targets.
Market Strategy — Explain how you will make money by going through your business model and the assumptions behind it. Which sales channels will you use to target customers? What do you expect acquisition costs to be? What are the key risks? And how will you mitigate them? You also need to outline your sales effort and production process, and key partnerships for distribution as well as any strategic business alliances. How will you measure success?
Technology — (if applicable for your company) This is where you show your audience the proprietary assets underpinning your business. Walk potential investors through your offering, explaining its unique value proposition - what makes it best-in-class - and how it will scale. Then elaborate on your strategy for safeguarding your IP, including copyright and patent registrations, and how you would defend against infringements.
Competitive Landscape — It’s not enough to say “our product will be the best on the market.” Provide an honest appraisal grounded in extensive research and analysis that describes your competitors, details their relative advantages and disadvantages, and demonstrates why/how your business and approach are uniquely qualified to succeed. Don’t ignore your competition -- investors will find them!
Financials — Your financial model should include a bottom-up financial forecast with revenue projections for the next 3 years. Be able to explain and defend all of your underlying assumptions and your relevant metrics, including revenue, gross margins, number of users, number of visits, and others that are tailored to your business.
Funding requirements — No surprise, here. Of course you need to cover how much money you want to raise. But you should also explain what valuation (and this could be a range) you’re using; whether and when you anticipate needing future financing; your capital equipment requirements; and who your lead/other investors are. What return can investors expect?
I’m also a firm believer in milestone financing. As you go through your planned use of funds, closely tie this to discrete milestones that you will accomplish over a 12-18 month timeframe. That helps investors see where their money is going, and, provided you hit your milestones, sets you up for a much higher valuation going into the next round.
Management Team — For many investors, the quality of the team trumps nearly all other considerations. Describe the backgrounds and past successes, and outline the relevant domain expertise of all members. This is also where you can address skill gaps/future hiring.
Remember that the initial meeting is just the first step in building a relationship with prospective investors. Use each one as an opportunity to refine and retool. As they say, practice makes perfect.
What are your tips for pitching success? Tell us about it in the comments section below or contact Early Growth Financial Services for pitching advice.
David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial and accounting services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.