I’ve been building pitch-decks for the better part of the past two years. Not only for my own startup, but also for fellow-enterpreneurs who pitched me, and on behalf of angel investors who wanted me to evaluate investment projects. I’ve created a heap of crap ones myself, but also built pitch-decks that actually raised money. So if you find yourself in the situation where you’re looking to build a decent pitch deck, I will share you some of my experiences based on some successful pitch-decks I’ve created or seen from others.
First and foremost, pitch-decks don’t matter. Actually, they do, but what good is it to have a great looking pitch-deck when the founder can’t bring a coherent story?
Never forget that first thing an investor looks at is you. Most likely an angel investor will not even have a look at your pitch-deck before you walk in. They size you up first. They look at the pitch-deck only as a supporting element to your story and the basis for further negotiations.
Pitching can be a gruelling experience, but it’s your chance to tell someone your story. So just go for it with all of your passion and energy and try to establish rapport. You’ll see it’s your most valuable objective for your first meeting.
However this post is not about how to pitch, but rather how an above average pitch-deck should look like.
What topics should I include in my pitch-deck?
I always try to come up with a story that only tells one tale. No sidetracks. No plots. Just a nice and simple story that has a beginning (the problem you’ve identified) and a closed end (how much money you need to solve it). Between those two points, I’m sure there is a heap of information you’d like to share, but don’t. Chances are you’ll get sidetracked and all your excessive information will becomes noise and divert the attention of the real story you’re trying to share. So try and keep your pitch-deck short. I typically keep it under a maximum of 15 slides.
Don’t try to be complete. Try to make sense. I once tried to be complete and I started writing pages as if they went out of style and I ended up with a 120 page business plan that was so thoroughly made investors doubted I even created it in the first place.
At least you must cover following topics:
- Market opportunity
- Problem definition
- Solution that you have built (or are building)
- Distribution and marketing (how to build traction; or do you have traction already?)
- Business model and financials
- Investment requirement (don’t forget you are here to ask for money)
The order doesn’t really matter, as long as you can bring your story in a coherent and logical flow. Personally I usually break it down in four large blocks:
- The Team (a good way to break the ice is to present yourself under one minute)
- The Problem (what it is we are solving and how we are solving it)
- The Solution (including demo, product description, … )
- The Market (market size, competitors, distribution, …)
- The Financials (business model, investment need, …)
The pitch-deck should at least address following topics:
- Is the addressable market a large and (more importantly) growing market? No one wants to play in a small, let alone shrinking, market. It is really important you can name the market you are in and you have trustworthy numbers. Market research agencies may be cool, but better is your own numbers of speaking with prospects, clients, your own survey, etc. Express growth in terms of CAGR.
- Do you actually solve a problem, or are you looking to find a problem? A definite red flag is a solution without a clearly defined problem. Describe the problem in great detail, as this inherently helps defining your market potential. This is the part of your pitch-deck where you want the room to keep nodding at you, confirming the problem. If they start giving you blank stares, you’re in a world of trouble.
- Has your solution any credibility at all? Does your solution look and feel as a real solution? Is the technology and architecture to build this beast credible? Is it field-tested? “Sure, I’d like to have retail-windows show me deals and ads specifically profiled for me, but what if we are five guys standing in front of it?” I mean, it’s often all too easy to come up with a solution, without testing the possible adoption of your solution by your customer. This is the part where I’m an avid supporter of the Consumer Development Process (read the Four Steps to Epiphany!).
- Is your team dedicated, on-board and delivering? What’s the story with your team? Having a co-founder or team members that worked at Google, Facebook or Twitter weighs against new fresh-out-of-school guys; but the most important thing is if every team member is fully committed. I’ve seen quite some startups that go “this and so will join me whenever I get the funding in”, which is (for me) a definite no-go. If you can’t convince someone about your passion, about your story or your product you won’t be able to convince your customers. This is typically a good test to see if you are onto something; chances are high you can fool yourself, but chances are slim you can fool a team of five or ten guys to quite their jobs to work with you on a bogus idea. You must demonstrate you can deliver.
- What is the lead-team on the competition? How hard was it to build what you’ve built? If you can build it in five days, you most likely don’t have a product. Is your tech patentable? If so, kudos; if not, no harm done as long as your lead and your business-model is so disruptive your immediate competitors won’t be able to keep up with you quickly enough.
- How will you get your product distributed? The worst part of every pitch, even yours I’m sure. There is no golden bullet on this one. There is no magical formula that will give you millions of users overnight. If it only were that easy. In my opinion, this slide should at least give the investors the feeling you know how distribution-models work and that you are capable of not selecting the wrong one. I mean, calling 600 million users and asking them to sign up to Facebook would’ve been a bad distribution tactic Of course, this slide is ideally the part of your pitch where you will need to moderate discussions and note down every word said. This is superimportant to learn from the feedback.
- How will you make money or reach mass adoption? Simple enough. Yet, I know little businesses that actually make money based on their initial business model. But that’s good, as long as you’re willing to pivot and have room to do so. This is the part where you want to explain your assumptions, take criticism and be extremely honest and transparent.
- Can you execute? This will be tested over and over again. If you said in your first meeting you were about to launch and by the second meeting you didn’t, you failed. If you said you’d send them a follow-up e-mail that day and you don’t, you failed. At the end of the day, the investors want to know if you’re for real. Simple rule of thumb: say what you do, do what you say.
How does my pitch-deck need to look like?
At least it should reflect your company’s style and attitude. If you’re a company selling ERP software, try and look as corporate as you can. If you’re selling an internet consumer app, you can go with a more flexible and aesthetic feel. Just never forget you are presenting a company, not a vague idea and certainly not a bunch of rock-stars. You are still a business whose sole intent is to make a truckload of money in a professional and disciplined manner.
Some basic hints I personally use:
- Select a readable font with a size that is half of the age of the oldest person in the room (if you’re pitching to a 70 year old, you’re probably in the wrong room).
- Use English. Even I go blank when I hear someone pitching me “our product is a collaborative social platform for the enterprise 2.0″. Just use simple words. If it’s a website, then it’s a website and not a “platform”. Get it?
- Use graphics and drawings instead of words. I’ve even bought myself a drawing pad to give my pitches a “paper based feel” as it brings more authenticity to the audience and connects better.
For more hints and tips on how to build your pitch-deck and how run it; have a look at Kawasaki’s tips, some of Jay jamison’s slides. I specifically recommend this article on ReOverThinking as well! A must read if you’re building your pitch-deck!
Do I need to bring my product or demo?
This is not even a debate. Of course you must show it! As a matter of fact, the past few years the technical means founders have at their disposal are so rich and present that having no demo or prototype is a no-go.
- If you don’t have traction, show the product
- If you don’t have the product, show a prototype (or demo)
- If you don’t have the prototype (or demo), show mockups
- If you don’t have mockups, please do your homework before coming in
Ideally you bring your demo by the time you have come to explain the problem-slide, and you start explaining your solution. This is where your co-founder comes in handy to click the slides away as you demonstrate your product or prototype, and also share nuggets of interesting information you would typically leave out.
Should I send my pitch-deck prior to the meeting, or as part of my introduction e-mail?
No. Investors are literally drowning in PDF, XLS, DOC and other exotic file-types being sent on a daily (if not hourly) rate for them to look at.
Sending a pitch-deck beforehand will only result in two things. Either they will look at it and send you a polite e-mail stating you don’t fit their investment profile (or at least keep you waiting for weeks on end before giving you any feedback). Or, your second best outcome would be a meeting with an angel investor that is prepared so well he starts firing questions at you right from the get-go, which will inevitably throw you off balance, and you will most likely make your first meeting an awkward one. Not cool.
Simply send an introduction e-mail that will catch the attention. Make sure it is complete but don’t write a two-pager. Do not send the pitch-deck in attachment. As a matter of fact, send nothing in attachment at all.
So how do I get introduced?
I’ve done cold-calling, inviting myself into a meeting, which nearly always resulted in a good discussion by the end of the first meeting. But this is a practice I wouldn’t recommend. Only do cold-calling as your final option, and don’t even think about using web-forms where VC firms ask you to submit your business plan/pitch deck. They just go straight to the bottom of the priority-list.
The best thing you can have is someone that trusts you and has a trusting relationship with some angel investors and is willing to endorse and introduce you. You get it. Being introduced is all about trust. Just as is fundraising. First your establish trust, and then you validate your idea or product, and then your raise money. Never forget that a strong introduction is always made by someone that is already fan of what you’re doing.
If you can’t have one to introduce you, and you hate cold-calling, you can always take your time to see where investors and entrepreneurs gather and join in. Just be physically present and try not to pitch anyone (unless asked to of course). Just make yourself noticeable in a positive manner, contribute to discussions and leave a good impression. Repeat this process a couple of times so that at least your physical presence leaves an imprint in the minds of the people you’re trying to reach. Ok, so this may sound a lot like stalking, except for the part where you start making indecent proposals
Another tactic may be evaluating what kind of people investors always need to pass: lawyers and bankers. Indeed, upholding strong and good relationships with a respected and highly reputable law firm, or having good connections with investment/private bankers nearly always provide for a decent hit on sourcing decent investor introductions. Of course, this is a huge personal favour on their part, so these types of introductions mainly come after you’ve established a long-lasting and fruitful relation with a law firm or your banker.
You could also use social media (such as Twitter or LinkedIn) to get in touch with angel investors, but I wouldn’t recommend this. It’s a very “cold” and emotionless medium, that doesn’t leave an impression except often the wrong one (ever read what people put in their Twitter profile descriptions?).
The best introductions are of course the ones where you can introduce yourself. Just make sure you are physically close with the guys you are trying to reach out to. Take time to build a trust relationship. Don’t pitch them at first, but have a cup of coffee. This is a karma-thing. No one ever declined my requests for a meeting as long as my request was sincere and the intended discussion would prove to be an interesting (or disturbing) one.
I bombed out. The investors hated my story. Now what?
Well. Truth of the matter is chances are more likely you’ll find people that aren’t buying your story than people who are. But don’t let that discourage you. As a matter of fact, you’ll be hearing alot of “NO”‘s in your fundraising round, so you’d better be capable of handling rejections well.
This is also a time where having a co-founder can be valuable as you can support each other in a negative emotional state. But whatever it is you have to do after you were rejected, just go do it and get it out of your system. Some like to take a long walk, others like to play a video-game, etc.
Cleanse your mind and body with all negativity and build yourself up for your next pitch. So whatever it is, simply do it, but do it fast. But don’t go out and do stupid stuff.
Just try to take even negative messages as a piece of sound advice (never argue and always say “thank you”… and mean it!) and see if you can use this to fine-tune your pitch-deck or enhance your product. And if you can’t use the information to improve and you come to face your idea is worthless, then at least someone took the time and courage to tell you.