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Securing funding for a new or early-stage business is hard – don't let anybody tell you otherwise. New ideas are risky, so every conversation with a potential investor probably starts with a "NO."
The brutal reality of fundraising is that most ideas do not get funded. Many tremendous but poorly articulated ideas perish in the inboxes of potential investors. The sole purpose of a pitch deck/investor presentation is to progress to the next stage, which will likely be an evaluation of the financial projections and business plan. Great ideas expressed with clarity, cohesion, and detail make it past the first round and to the due diligence phase. Piquing an investor’s interest may be as simple as holding the reader's attention. In other words, the strength of your pitch deck really matters.
What makes a winning pitch deck?
Strong pitch decks tell a story logically and comprehensively. Each idea must naturally lead into the next concept, building a compelling argument slide by slide.
A Google search for "pitch decks or business plan templates" yields hundreds of results, many of them from companies or business “influencers" pitching their secret formula. Many templates are marketed and sold as the "Best Pitch Deck" formula. We disagree with this approach – here’s why:
Imagine you are an investor and a big part of your job is evaluating business plans and pitch decks. The reality is that you will likely reject the majority of the business ideas that land in your inbox. Generic and formulaic decks all blur together after a while. On the other hand, an original, beautifully crafted narrative captured through excellent copy and beautiful design will stand out from the crowd.
I prefer the fit and look of a tailored suit made with care and to my measurements over an off-the-shelf mass-produced version. The same should be true for a business plan: it should enhance the company's assets and describe the entrepreneurial vision while demonstrating competency and attention to detail.
Therefore, it should be no surprise that I won't lay out our secret irresistible investment deck formula here. Instead, we discuss the broad themes an investor presentation/start-up deck should cover and, in doing so, present a better alternative to the one-size-fits-all approach. There are undoubtedly specific points that every investor will expect to see and understand, so let's start with them:
1: The Executive Summary
Typically used to trot out a mediocre sales pitch outlining the company's capabilities, this ubiquitous slide can be potent and attention-grabbing. At Amos + Advisors, we recommend using this as an opportunity to express the pain point your service or product addresses and how your customers' lives will benefit after its use. Adopting a client-centric approach from the beginning of your deck shows that you are laser-focused on your customers' needs and that this underpins everything else. In contrast, most executive summaries tell a myopic, inward focusing story describing the company's assets and capabilities without thought to the only thing that truly matters -- how well the company serves its market.
Cookie-cutter business plan writers and deck designers often fall short of the mark when crafting this vital component of a company narrative. Their business model simply doesn't allow for the investment of time in discovery needed to articulate the company's value proposition from the perspective of the most important stakeholders -- the customers. Before writing a single word, Amos+ Advisors conduct in-depth interviews with significant stakeholder groups, ensuring that we understand and can articulate why they need the product or service and how they benefit from it. We recommend thinking of your executive summary as your elevator pitch.
2: The Vision Statement
Lazy pitch deck writers love vision statements, but few use them correctly. It is hard to underestimate the damage a vapid generic-sounding platitude of a vision statement does. How often could you read "Our vision is to understand and serve our customers while maintaining high levels of integrity" without your eyelids drooping? Instead, think of your vision statement as an attention-grabbing big picture tweet. Keep it short and tight -- one sentence that sums up your core value proposition and shows your ambition.
One helpful trick here is to reference a well-known company.
"We are the Tesla of automated wheelbarrows" or "Imagine if Airbnb and Better Help had a baby" or "Imagine if Burger King was vegan."
I'm obviously having some fun with these examples, but the point is valid. By anchoring your vision to that of already dominant businesses, it is possible to convey what would otherwise take many words. One word of caution here: your company model must be close to or an improvement to the referenced business model.
3: The Mission Statement
Once a mainstay of the pitch deck, the mission statement has been responsible for more corny and grandiose sentiments than the Hallmark aisle at Walmart.
Unless your company truly serves to affect social gain, then skip this slide. Suppose your company is solving a big problem and genuinely benefiting a section of society or the world in general. In that case, the mission statement could be a vital part of the narrative. Tesla's mission statement" to accelerate the world's transition to sustainable energy" undoubtedly sounded far-fetched in 2012, but few would argue with it today. Mission statements are probably more helpful for most companies as internal documents designed to rally the troops around a common objective.
4: The Problem
All businesses exist because they offer a solution to a problem." This is a true if overused statement, and most pitch decks make the mistake of speaking in broad generalities at this point in their narrative. We recommend that our clients use the problem slide to demonstrate their subject matter expertise and empathy for the challenges faced by their competitors. The better the customers' pain point is articulated, the more powerful this slide will be. This is where an immersive discovery process will yield great results. Powerful, concise descriptions of customer pain points will show a potential investor that you have deep subject matter expertise and have built a solution based upon this knowledge.
5: The Target Market
Normally the realm of unbelievable Total Addressable Market (TAM) figures, this slide is another contender for the most enormous missed opportunity in most start-up decks. How often have you seen entrepreneurs on "Shark Tank" claim a massive TAM and suggest they only need a tiny percentage of it? The answer is almost none that actually got funded.
A much better approach is to use this slide as an opportunity to demonstrate a deep knowledge of your customer base or market. An excellent way to do this is to segment your potential buyers into discrete audiences and create idealized customer "avatars" for each. How much does each segment currently spend on similar and inferior products? How many of them are there? By showing that you understand that your products or services appeal to different audiences for different reasons, you are once again demonstrating mastery of your niche. The bottom line is that you can't go wrong being customer-centric throughout the deck.
6: The Solution
If you have told your story well, the reader will already know the problem you solve and for whom -- know it's time to tell them "how" you do it. Be specific here, and if you can, use graphics to show rather than words to "tell."
Here is an example of an Amos + Advisors solution slide prepared for a digital health provider to the Department of Defense and the Department of Veterans Affairs. When played in presenter mode, the man zips down the line above all of the pain points felt by service men and women seeking access to healthcare. These two slides were critical in securing investment.
7: Revenue+ Business Model
Now that the audience knows that you have deep subject matter expertise, an understanding of your clients' pain points, and a better solution, it is time to describe how you are going to monetize this advantage.
What are your product or service lines?
- How does your pricing compare to that of your competition?
- Are your margins bigger because of proprietary manufacturing processes?
- What is the lifetime customer value for each audience segment you detailed earlier?
- Are your sales one-offs, or do they create service and maintenance revenues?
- Do you have recurring revenues from subscriptions or service contracts?
- Can you cross-sell? Upsell?
8: Traction
This is where you start to prove out all of the previous statements answering the question: "Ok, so this sounds great, but is it real?"
Have you built a proven prototype? Do you have a credible team? Most of all, have you proven everything you have claimed with actual verifiable sales? Be specific and show the growth potential. Timelines showing important milestones are an excellent visual way to demonstrate traction and point to a bright future.
9: Go-to-Market Strategy
Also referred to as a marketing plan or sales strategy document, we think go-to-market (GTM) slides are more persuasive than boilerplate marketing slides. Exceptional GTM plans enable the potential investor to realize that you have all your bases covered by showing exactly how you will deliver sales. Show how you plan to reach each customer segment and the messaging you will use to inspire them to enter your sales funnel. Will you use direct sales or will social media populate the top of your sales funnel? What are the steps a typical customer goes through before purchase, or in other words, what is your "Customer Journey?
10: Your Team
By this point, potential investors should believe in your vision for the company and understand the problem you are solving and for whom. They should also feel comfortable that you have demonstrated traction and confidence that you can attract and retain customers. The last remaining question should be, "Do you have the expertise and skills to deliver this plan?" Keep this in mind when writing your team bios. Focusing on how team members' skills tie into the business plan through relating relevant experience is an excellent way of tying the narrative together.
If you have not completed your team, include brief job descriptions and requirements on an org chart.
11: The Financials
While all investors expect to see financials, most will understand that even the best are not much more than a combination of many assumptions. However, you must demonstrate competence at this point in the deck. Try and avoid the over-optimistic and often naive looking bottom left to top right line graphs unless you have actuals upon which to base it.
Financial slides should include modeling showing three-year sales forecasts, a profit and loss or income statement, and a cash flow forecast. A repayment schedule may impart a desirable sense of comfort if you are applying for a loan.
Keep these slides to big-picture content and make them visually compelling. Most importantly, ensure every financial assumption is tethered to a defendable truth.
12: Analysis of the Competition
Your potential customers are currently looking for solutions to their pain points. SWOT analyses are often poorly executed because the authors rarely invest the time to understand the competition solutions. However, they can be a very effective and visually exciting tool as a feature comparison or pricing table. The key is presenting well-researched and insightful information that demonstrates your superiority.
13: How will you spend my money?
Every investor wants to believe that the only thing holding a prospective investment back is the lack of funding. If your deck has done its job, investors should believe that all you need is their money and untold riches will materialize – all you have to do is follow the plan you have detailed. Be specific and show precisely how you will allocate funds and if you can mitigate any risks, do so.
You may want to utilize numerous other slides to tell your story better. Don't be afraid to be creative and remember to use illustration and design to make a point wherever possible.
In summary, your vision is too important and unique to trust in a cookie-cutter template. These are often optimized for the preparer's convenience and profitability at the expense of telling your story in the most resonant way possible.
Happy Pitch Deck Creating! And good luck!
