Pitch Must-Haves Before Sending to Investors
Most fundraising stories involve a pitch deck. Every year, investors wade through hundreds of presentations trying to uncover the proverbial diamond in the rough with massive unicorn potential.
Being able to cut through all the noise and stand out from the pile takes unique skills, especially when you are a new to the investment game.
For most founders, the daily startup grind is already a big enough challenge without the added burden of continuously finding new money and preparing investment documentation.
With only so many hours in the day, you really need to up your game in terms of knowing what to include in a pitch deck and quickly grab an investor’s attention from that very first slide. So, how do we do that? Let’s dive in together!
Why are pitch decks so important to investors?
The optimum way of uncovering future unicorns is setting up a radar identifying the most promising ventures. However, that takes time and money, and nobody wants to spend hours wading through documents to understand your business. That’s why a pitch deck is a quick and efficient way of gaining a snapshot that filters out the “no go’s” from the potentially promising investment opportunities that might be worth examining in more detail.
Typical pitch deck issues
Founders can often be very emotionally connected to their startups and investors love this. However, this can often be a trap for founders because they want to tell as much of the story as possible. This results in “deck overload,” where unnecessary and completely redundant information has the potential to bore the investor to death. This can result in the pitch ending up on the “no-go” pile. Let’s examine some of the typical pitfalls.
Fluffy or absent storyline
When reviewing the decks that come across our desks, we often see a lack of a compelling and consistent story. Often, there’s no clear connection linking the slides, and everything is disjointed. When this type of deck becomes difficult to read, it’s easy to see why an investor can struggle to understand the pitch and ultimately lose interest.
That’s why you need to ensure your slides stick to a logical flow. These days, there are so many templates out there to help you structure your pitch narrative. Whatever structure you choose, what matters is how the overall story looks. Have you woven a consistent, strong red thread throughout the fabric of your pitch, or are you jumping aimlessly from one page to the next?
You may have an amazing product or service, but you really don’t need to bore investors with all the technicalities. Investors just want to see your value proposition and clear competitive advantages. Skip the spare parts list.
Of course, provide some color to your path/vision/mission because your emotional involvement really needs to jump off the page for investors. Also, make sure that the narrative is tight, not too fluffy, and shows the path to future substantial profits. Ultimately, investors will be looking for evidence of traction, a sound strategy, and a realistic forecast.
Always ensure your presentation makes the investor’s life as easy as possible. If you plan to send out the deck to investors, then it needs to be self-explanatory. Run the “ten-year-old” test. If a ten-year-old can’t understand it, don’t expect your time-strapped investor to give it any consideration either.
If you’re pitching in front of an audience, avoid large chunks of text with small font and over-complicated slides. Nobody will pay attention to them. You may run the risk of giving the impression that you’re trying to hide something or distract attention.
Some founders feel they need to share everything in their presentation. In reality, investors will initially skim a deck due to the lack of time. The average deck read time for an investor is around 2.5 minutes. The average active listen time for a pitch (when presenting) is 20 minutes. That’s why you need to focus on the most important things.
Poor attention to design
While it is true that content is king, also make sure that your presentation looks aesthetic across different devices. The overall design should make your data even more compelling and impressive. Always check if your slides are readable and understandable.
Whatever you do, when showing market sizes, statistics, or other sources, everything must be up to date. This may seem obvious, but in our experience, so many decks contain outdated data sources. Don’t be complacent here and ensure you include the latest information available. Unless you are showing how a market evolved, if investors see numbers and trends from years back, you’ll come across as a rookie.
There’s a famous quote that says, “If you can’t explain something in simple words, then you don’t know how it works.” This is so true. Nobody likes a smart ass, so avoid the complicated technical jargon, and intricate explanations. If your business pitch is too hard to digest, apply the “ten-year-old” test mentioned earlier and avoid putting your investor through the pain.
What key elements should you include in a pitch deck?
So, what should a pitch deck include if you’re going to nail the meeting with the investors? When it comes to finding the right pitch template, scouring the internet can be time consuming, and knowing what template covers all the right information can blow your mind. So, what to include in a business pitch so that it covers all the necessary points but isn’t overcomplicated?
01 The Problem
Every business seeks to resolve a specific customer pain point. Investors need to understand the size of this problem. They also need to know that addressing it will convert into hockey-stick growth generating substantial returns. How large is the target market? Is the target audience growing? If you can’t show either of these, your startup is doomed.
Prove the problem you’re solving is a sizeable one by relating that pain point to a substantial number of customers. Don’t forget to include in a pitch deck information about whether the problem represents a big loss for customers in terms of productivity, time, or money. Make sure to back up your statements with recent statistics or facts that can be confirmed by credible sources.
Example of the Problem slide
02 Product & Value Proposition
There’s no doubt that every founder can go on for hours talking about their business’s product or service. There’s really no need to devote half the deck to the product and its features. What investors want to see quickly is whether your solution solves the problem mentioned earlier, how it works, and what compelling benefits it brings to the customer.
Don’t just tell investors you’ve made progress. SHOW them. This will increase their trust and prove you’re at the development stage you claim to be. Has an MVP been developed? Has the market been validated? Have you completed beta testing? Provide clear details on the product, market, financials, and customer feedback. Again, focus only on the most important and impressive things. Then skip the rest.
Example of the Traction slide
04 Market Size and Potential
Investors want to know your potential growth opportunities, so you’ll need to show what market you operate in, how large it is, and what the current trends and factors boosting demand that will allow you to scale quickly are. These points quickly allow investors to assess whether you’re realistic about the market size and opportunities and if this is a potentially worthwhile investment.
Example of the Market slide
05 Team Background
Many startups seriously underestimate the team slide, even though it’s one of the most critical aspects of the pitch. Having a good ship and fair weather on your side are simply never enough. You still need an experienced crew with the vision, stamina, foresight, and skin in the game to steer the vessel through choppy waters.
Show that you have the right experienced team to leverage opportunities in the good times, but you can weather the storms with minimum losses.
Highlight relevant experience and key achievements of the core team. Showcase any advisers who add specific value to your startup.
Example of the Team slide
06 Strategic Roadmap & Contingency Plans
Don’t forget to elaborate on the company’s future vision and plans too. Your long-term results will be highly dependent on certain strategic moves. It’s critical for the investors to see whether you have a realistic and thorough plan and vision for the next years (business model, GTM plan, product development roadmap, etc.) and if they look reasonable and realistic.
A common startup trap is claiming there’s no competition. Investors don’t buy it! In fact, it’s a complete turn-off. In the real world, consumers always have an alternative solution, so you must be able to show those alternatives.
On the other hand, this is your opportunity to shine the spotlight on how you can stand out from the crowd. Be ready to describe and explain any competitive advantages and emphasise both your unfair advantages and moats (if any).
08 Financial Forecast & The Ask
Any investment pitch is about the numbers, so make sure investors get to see them quickly. Show how your financials will evolve over the years. What are the unit economics? How will they change once you scale? Most importantly, how will their investment funds be used and over what milestones? Make sure your pitch answers these questions clearly and succinctly.
09 Call to action
No matter how long your presentation is, it’s always a good idea to provide a strong summary and call to action. Remind the investor of the pros of investing in your business. Just don’t retell the whole story. Select the top four to six “sweeteners” that will attract investors and ensure that your call to action is very clear. The investor wants to know your timeframe, expectations, and how to reach you. So, outline the next steps.
Remember – every pitch deck is just the beginning of the investor conversation. As you have seen – understanding what to include in a business pitch takes a great deal of effort and time. We hope that this advice comes in handy and of course – understanding how busy founders are – our experts are always ready to help you with your pitch deck.
Here at Waveup, we help companies raise funds by creating bullet-proof investor materials. Our projects raised ≈$0.5B in total last year. Why not join this hall of fame too? Just drop us a message when you’re ready. We look forward to hearing from you.