Putting together a pitch deck is so important. It can make or break a relationship with a potential investor. If it’s too long, the investor may lose interest. If it’s too short, the investor may think that the entrepreneur hasn’t done his or her diligence. So what’s the best approach?
Listed below are the key components of any pitch deck. They are essentially the major topics that a smart investor will eventually cover in a due diligence process. Most entrepreneurs get only 10 minutes (if that!) to pitch their business in 10-15 slides, so if you address these topics comprehensively from the start, you’re well on your way to piquing the investor’s interest and getting the next meeting.
So here goes…
Business Summary – What does your business do? I can’t say how many times an entrepreneur launches into a lengthy explanation about the problem he or she is solving and the size of the market only to have an investor raise their hand mid-presentation and say, “But what do you do?!?” Tell your audience what your business does clearly and succinctly from the start.
Market Assessment – How big is your market? Most investors want to know that you’re playing in a multi-billion dollar market. That way, if you carve out even a small portion of the space, you can develop a multi-million dollar business. Do your research and demonstrate that the market is large and attractive.
Barriers to Entry – What’s to prevent competitors from replicating your idea? Perhaps you have a patent which protects your technology or intellectual property which no one else possesses. Maybe you have exclusive relationships with partners or customers. Whatever your edge is, investors want to understand your competitive advantage.
Scalability – How does your business scale? Scalability is the difference between investing in one doctor launching an individual practice and investing in a software company which all doctors with practices can purchase. Investors want to understand how your business can grow, geographically and/or across a large customer base, by making the most of limited resources.
Traction – What milestones have you reached to date? This could mean a number of things. You could highlight revenues generated, users acquired, strategic partners, etc. Whatever your metrics, investors want to see that you’ve made progress and are demonstrating proof that your concept will be successful.
Sales and Marketing – How are you reaching your audience? Perhaps you plan to build out a sales team. Maybe you have a social media plan or established partnerships to help acquire users. Investors want to know how you intend to reach your audience, and many want to understand whether you have thought through the costs required to obtain customers.
Team – What are the backgrounds of your team? Maybe you have deep expertise in the sector, or maybe someone on your team is developing the software. Investors want to understand why you and your team are best positioned to make the company successful. If you’re a serial entrepreneur who has sold a company in the past, you know to highlight that too!
Competition – Who are your competitors and how do you compare to them? A matrix can be helpful here in neatly displaying all the major players in the space (including you!) and how each measures up across different criteria. (Hint: you will likely have more checks against the criteria while your competitors have more x’s!).
Exit Strategy – How are investors going to get a return on their money? Be thoughtful about who could potentially acquire your company and what comparable transactions have occurred in your space. Investors do not want to invest in “lifestyle businesses” where they will never get their money back. It is critical that investors and entrepreneurs be in agreement on this topic from the start so that they are working towards the same exit goals throughout the growth of the business.
Funding Needs – How much are you raising and what is the structure of the offering? It helps to be clear not only about the total funds needed but also how those funds will be spent. Are you spending money on hires, technology, marketing, etc.? Also, be clear about whether you are offering convertible debt or equity, how you are valuing your company, and any relevant legal terms of the offering.
Financials – What are the past financials and future projections of your company? Some companies seek funding before revenues are generated while others may have already generated sales. In any case, investors want to see relevant metrics (e.g. sales, expenses, gross margins, etc.) for historical periods, if applicable, and future projections going forward.
And there you have it! The above topics make a great pitch deck, and it goes without saying that the overall presentation should also be of high quality. But there’s one more critical component…PASSION!!! Investors want to see entrepreneurs with enthusiasm. Make sure your oral delivery of the pitch deck conveys the same excitement and drive which inspired you to found the company in the first place, and you should be well on your way!
Alicia Syrett is the Founder and CEO of Pantegrion Capital, an angel investment vehicle focused on seed and early stage investments. She currently serves on the Board of New York Angels and is a recurring panelist on CNBC's PowerPitch. A former entrepreneur herself, she now works actively with a number of startups on their advisory boards and speaks often in the startup ecosystem.
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