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There are a million different articles on what needs to be in your pitch deck to investors. How would you like to hear what a venture capitalist wants to see in your pitch deck? Marc Phillips, Managing Director of Arafura Ventures and author of Inside Silicon Valley: How the Deals Get Done, joined EGFS Partner Gadiel Morantes on a recent webinar to reveal the key slides of any successful pitch deck, and what should be included in those slides.
View the webinar recording here, or read more in the recap below:
The Methodology for Your Startup Pitch Deck
You can spend a lot of time preparing the wrong presentation...you only get half an hour to an hour in front of a venture capitalist. It’s really critical that the deck has some structure to it.
Three things need to be included on your first slide: An inviting picture/image, the name of the company, and the elevator pitch. Mention your Management Team up front if you don’t know the investors ahead of time.
Pitch Deck Slide #2 - The Problem We Solve
You want to move into the problem you are solving, pretty quickly. Skip the backstory, and get to the point - “The problem is X.” If there are multiple problems, focus on the largest and most immediate to start. Avoid jargon and acronyms...keep it straightforward and simple.
Pitch Deck Slide #3 - The Solution
Within the first couple of minutes, you should be through the introduction, and stated your problem. From there, you should be ready to show the solution, either live (mobile app), or in graphical format on your slide. Speak clearly and confidently.
Pitch Deck Slide #4 - The Market Size
Venture capitalists want to see the math - “If this company got 1% of the market, would that be a significant company?” Make the calculations simple and easy to digest...what is your Initial Market vs. the Serviceable Market vs. the Total Market?
Pitch Deck Slide #5 - The Product - Technology Architecture
The product. It’s often hard for the investors to see what you see. You should make the product’s benefits easy to see and understand. Show, not tell. A “parallel” conversation is ideal...showing the “over the hood” as well as the “under the hood” of your product architecture. It should make sense - really quickly.
At this point, the VC is thinking, “I’m interested in this, or not.” This is another side that should be high-level, without getting too deep into details. Prove two things: show that your product is scalable, and show that it is defensible (can’t be easily copied). Nothing impresses VCs more than founders who show that they are really smart, and are on to something that not many people know about yet.
Pitch Deck Slide #7 - Go to Market - Distribution
It’s really about communicating how you’re getting to market; this slide shows you have taken the time to research what the best method(s) will be for getting your offering out into the world. A lot of incubators and accelerators today will spend time with their member companies to assemble a proper distribution strategy.
Pitch Deck Slide #8 - Competitor Matrix
Usually the slide that is left out of pitch decks, but it is one of the most important. Rule #1: There are ALWAYS competitors. Rule #2: If you don’t tell the VC who the competition is, they’ll find out for themselves. Rule #3: Tell the VC about the competition in an informed way. It allows the VC to determine if the funding truly offers a competitive advantage.
Pitch Deck Slide #9 - Revenue Projections
Keep it to one slide, with 2-3 years of revenue projections. Top line operating expenses. Most importantly, what does the cash burn look like, and what’s the head count? Avoid going into a five year model at the early stages. Keep it simple...VCs are only going to remember a few key numbers.
Pitch Deck Slide #10 - Advisors
Choosing advisors is very important. Pick advisors that can do things that you can’t do. Pick advisors that are doing it because they believe in your idea, not just for the payout. As far as compensation, a tenth to a quarter percent stock vesting monthly over 12-18 months is a great benchmark. Keep in mind, the advisors and their involvement can and do change as your company scales.
Pitch Deck Slide #11 - Use of Funds
The “Show Me the Money” slide. VCs want to know what you need, and what the valuation is. Be ready to discuss valuation if you’re approaching a VC about leading a raising round.
Pitch Deck Slide #12 - Exit Strategy
Some entrepreneurs don’t like to put it in, but VCs usually like to see it. Give a sense of what the potential exits are...there’s always a chance that the VC in front of you has the connections to help facilitate one of your ideal exit paths down the road.