You have a business idea but no funds? Don’t worry! Most of the successful start-ups do not fund themselves but approach investors for funding. However, raising money from investors can be a daunting task. You get a limited amount of time and you cannot afford to lose your audience’s focus. A well-structured pitch deck that clearly communicates your message to the investors can help you go a long way in your fund-raising mission.
Here are 13 slides that you should definitely have in your pitch deck in order to grab the investors’ attention:
This slide will create a first impression on your audience and is going to be displayed even before you start pitching. It provides you with an opportunity to create a brand for yourself, more like a billboard.
Include the following in the slide:
• Your company name (Big Font)
• A catchy slogan (One liner)
• Name of the presenter
Note: Do not put dates on this slide as you may forget to update the date and this may give an impression to the investors that you have been out there trying to raise capital for quite sometime.
2. Elevator Pitch:
The purpose of this slide is to provide a brief on three key points:
• What is your business about?
• What is the problem in the market that you are providing solution for?
• What is the solution?
Do not hurdle up this slide. Present each point with one or two liners or graphics.
3. Team & Future Hires:
Your team is something that gives the investors a reason to listen to you. It is important to sell your team even before you sell your idea. The purpose of this slide is to convince the investors that “You are the right team to invest upon”. It is always a bonus to have a strong team with enough experience. Mention the five major points about each team member:
• Industry experience
• Their success stories and achievements
• Their leadership experience and
• Their role in your start-up
• Education (if received from top universities)
Include images of the team members as they make the slide look lively. You may not have set up the complete team before pitching to the investors. In such a case, let your audience know upfront that you recognise the key gaps in your management team and you are trying to put together a right team through your planned future hires.
4. Market Opportunity:
This slide is all about the assessment of the market size. You need to highlight the potential of the market for yourself and for your investors. Represent the size of your overall market either in terms of the number of units sold or revenue generated per year. Let your investors know at what stage the industry is in: Growth, stable or declining. A fast growing market is the best one to enter.
It is important to understand that the overall market size is different from your total addressable market. For example: if you are selling computers, its market size will be smaller as compared to the size of the general industry, i.e. the retail industry.
Be very clear about the actual sub-sector of the industry that you are targeting and just after presenting the general market size, focus on defining your total addressable market. Size it in terms of units sold or revenue per year and mention the growth stage.
Clearly define your ideal target customer. Highlight the important points about the customers including their type (individual or business), their needs and who they purchase the services from currently. Let the investors know why you think it is the right time to enter the market and how your entrance may resolve the current issues faced by your target customers.
5. Market Problem and Current Solutions:
Talk about the problems that persist in the market, either because there is no solution or the current solutions themselves are the problems as they are expensive, difficult to use, outdated or technologically inferior. Ensure that the big pain points that keep your customers up at night are clearly highlighted in this slide. Remember “Bigger the problem, greater would be the opportunity”. It is very important to nail your views about the market in this slide as this will set the stage for your next slide speaking about the solutions that you have to offer.
6. Your Solution to the Market Problem:
This slide is one of the most important slides of your pitch deck as it focuses on the major reason your investor should invest on your idea. The purpose of all the earlier slides is to generate an interest among your audience to listen to this slide. Instead of just verbally presenting the solution, use tools like a short video, screenshots of the key features or a demo. Story telling can be a great way to represent the solution as it is easy to understand and relate to. Let your audience visualise how your target customer has a specific problem and how the use of your platform helps resolve the same. In case you are using a demo ensure that it is not too long and does not distract your audience from the presentation. Do not elaborate much on the technical aspects of your product or service as it is not something your audience wants to listen to. Investors are interested in understanding the key value proposition of your solution, whether it is better, faster and more efficient than the existing ones.
Investors meet a lot of start-ups and they face the need to make a choice between the deals. They compare the deals on the basis of the traction that the companies have achieved so far. Present your key milestones since the beginning which may include conversion rates, number of customers or revenues. Show that you have a very strong pipeline of customers for the coming years. Very early stage start-ups with no revenue should at least develop a basic Minimum Viable Product or MVP to get feedback from the market. This will show the investors that your company is more than an idea.
The purpose of this slide is to let the investors know that you have a clear understanding of the current market landscape and the potential future changes. Present your direct and indirect competitors and show how you are several times better than them. Not necessarily, your product or service should have a bunch of features that are better than the competitors. You can have one feature which is several times better than the closest competitor. Avoid being the first mover in any industry as investors are not keen on investing on sectors that have not yet been proved. Do not say that you have no competitors in the market because even if there are no direct competitors, you will definitely have indirect competitors in the market, without any exception. As soon as you will start proving yourself, bigger players from the related industry will enter your industry and they may have many more resources to take over your space.
9. Competitive Advantages:
Use this slide to show how you are going to be competitive in the market. Your competitive advantages can be in terms of your unique technology, price or availability but ensure that the advantages are sustainable. Investors are much more interested in your sustainable competitive strategies than the current ones. Sustainable advantages can be in the form of unmatched experience of your team, your network of partners and customers, your resources and your patents. Ensure that you very well understand the weaknesses of your competitors as you can use those as the base to build your own competitive advantages.
10. Your Business Model (Revenue Streams):
Present your key revenue streams which help you make 80% of revenue. Investors are more interested on a recurring revenue model like monthly subscription or ad revenue through regular customers. Explain your pricing strategy to the investors. Let them know how you reached to a particular pricing strategy. The strategy should have a good logic behind it and should be developed after conducting a thorough market research. You may also want to include the rate of conversion of the visitors coming to your platform into paid clients. 10% -20% conversion rate is considered to be a good conversion rate for a startup.
11. Marketing Strategy:
This slide is meant to explain to your audience, the efforts required to generate revenue. Mention the unique channels to reach and to attract the paying customers like marketing campaigns and strategic partnerships. Remember that the investors are interested in the companies with economical scalable strategies. It is always a bonus to show economies of scale in your business model.
12. Financial Projections:
Show that your market penetration will be a fraction of the total industry size. Back your numbers with a realistic logic and rationality. Even 1% penetration of the market in the first year may be challenging in the first year. If you are an early stage start-up, provide 6 years of projections instead of 5 years as the first year may not have any traction or minimum traction. In the projections, include revenue, expenses, EBITDA and EBITDA margin.
13. Exit Strategy:
A well-defined exit strategy is very important for both early stage and late stage start-ups. Acquisition by other market players is considered to be one of the most common exit strategies. If you are considering this, do not just mention the names of your potential acquirers but also clearly explain why they will be interested in acquiring you instead of developing things by themselves. IPO is another exit strategy but not as preferred as acquisition. If you go for an IPO, you will not be able to sell your all your stocks on the day your company becomes public. You may have to wait for a good amount of time to sell your stocks and by that time the price of the shares may decrease significantly. In case you are acquired, you and your investors get the money upfront and therefore acquisition is considered to be the most efficient exit strategy.
Believe in your idea and get started!
About the Author
Aalo Mukherjee is a professional business plan writer supporting start-ups in mapping out their business ideas and strategies.
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