As an eager business owner, the pitch deck for your Series A is often the first thing on your to-do list. This item is one of the more exciting parts, after all. But just as we’ve described in this entire blog post series, the strategy is everything. Take a step back and slow down to get it right the first time—we’ll show you how.
In this third blog post of our Series A funding series, we’ll cover creating the perfect pitch deck. As in the rest of our pieces, we’ll feature insights from a seasoned VC investor—Mike Rogers, partner at Interplay Ventures.
Before we begin, though, let’s get one thing straight. Outsourcing the design of your pitch deck is an excellent way to make it look polished and pristine. But—and that’s an enormous pause—never outsource the creation of your pitch deck. This business story is yours to tell, and not even the greatest novelist in the world can tell it better than you. Now, let’s dive in!
When you pursue a round of venture capital (VC) funding, the presentation doing your bidding is called a pitch deck. In other words, it typically serves as the workhorse in this whole process. To start the presentation on the right foot, let’s talk about the first couple of slides.
Although a typical pitch deck is under 20 slides (the fewer, the better!), use the first one or two slides to summarize the highlights of your business. These slides are more like high-level teasers than anything else. Also, include vital points and the central business objective you want to communicate.
Remember that the median US venture capital fund size will top $110 million, reaching an all-time high. To land a piece of the pie, stick with a no-fluff approach, embracing well-structured sentences and words that communicate what you’re all about (minus slang or jargon, of course).
The Problem You’re Solving
Next, what is “broken” in your industry that you’re trying to fix? Take a chunk of time to genuinely ponder that question, too. Sure, you could tackle the issue head-on, but a dozen or more entrepreneurs have probably tried that way before.
Instead, consider approaching the problem at a unique angle—sideways, in other words. This approach will communicate to potential VCs your ability to solve complex problems with innovative solutions.
After you’ve determined your approach, use the next slide or two to convey the nature of the market opportunity that you are looking to address with your product or service. Here are some pointers regarding what to include in this portion:
- Focus on one industry problem (not several) you aim to solve.
- Dedicate one to three slides to this portion.
- Be clear, concise, and relevant—don’t ramble.
- Describe the problem by weaving it in a compelling storyline.
- Keep the problem slide separate from the solution slide.
Your Business / Product
As we reviewed in the previous post of this particular series, the best way to convince an investor that you know your business is merely to know your business. When you’re an expert in your industry, VCs are more likely to lend you an ear (and dole out cash).
That said, now is the time to present your solution by describing how your product can fill the gap in the market. Explain how your business or product is different from others. Also, talk about what you’ve done to improve current products that are available in your space. More than boasting about how awesome you are, you’re laying a foundation—establishing confidence and trust in your industry expertise.
Regarding your solution, remember to focus on your particular angle rather than setting yourself up as a “clear leader.” As mentioned, dozens of others have likely approached the same problem, and you’re not saying anything new to the investors. Be sure to present your solution as unique as you presented your problem, as well. Find a relevant angle—and crush it!
Marketing & Customer Acquisition Strategy
Venture capitalists are looking for scalability and a solid return on investment (ROI). For example, can this opportunity provide a 10x return for them in under seven years? Let’s hope! So, your marketing strategy slide needs to help VCs quantify their ROI. In other words, this information needs to scream, “I can make you lots of money in the future!”
An excellent way to show your plan to capture market share effectively is to use graphs. These graphs should display past market growth as well as potential growth. Be sure to use market research papers as sources, too.
Also, be ready for sideways questions about how your strategy fits into the market. Rogers explains, “When asked questions about things that might be outside of your core business scope that are important to the overall market, you really better know them and understand how they impact or don’t impact the business that you’re trying to build.”
Your goal is to show the VCs that you’ve come up with a thoughtful plan to roll out your product that will profit everyone involved. Be precise when you present your strategy, too. For example, talk about how you’re going to acquire customers if you get the investment. What channels will you use—digital advertising, content marketing, sponsorships, partnerships, affiliates, or something else altogether? Don’t forget to include projected numbers regarding your chief metrics, as well, including customer acquisition cost and lifetime value, if possible.
Competency and compatibility are the two primary qualities investors will want to see in your management team. That said, the team slides are often the most important ones out of the entire pitch deck. Mainly because your team is the people driving this endeavor.
It’s beneficial to have entrepreneurs on your team who’ve done this before. However, having numerous startups under your belt isn’t the only way to show competency. Again, being prepared and having the knowledge to navigate your market effortlessly is an enormous benefit. The more people on your team who can achieve this, the better.
When you introduce your team, here are vital points to include:
- Talk about each team member’s background and strengths.
- Hit on how they contribute to the company.
- Bullet your team’s achievements related to your company and industry.
- Weave industry knowledge in every single description of your team.
- Show how committed your team is to your goal and the industry.
How do you stand out from the rest in your space? VCs want to know what’s different about you than your competition, so have a slide dedicated to this information.
Keep in mind that at least three direct listing of VC-backed companies valued over $1 billion will close in 2020. In other words, VCs might be more cautious and picky than ever, so you must outshine your competition.
Display a competitive analysis to drive home how your product or business is differentiated. The report will give investors a chance to see who you are going up against in the market.Use a competitor matrix to illustrate how your product fits in the current market landscape.
Not only does this approach speak volumes about your industry knowledge, but it communicates level-headedness. In other words, you’re not the “golden child.” Instead, you’re ready to do what it takes to spearhead the market.
Rogers couldn’t have said it better, “If you’re coming in and pitching a VC on why they should give you millions of dollars to build a business in a specific vertical, you better know that vertical better than anybody else.”
Even though your company isn’t massive right now, thoughtful projections will boost your credibility to investors. Touch on the revenue and cost side, showing how you plan to use the capital that you are raising responsibly.
Naturally, this is the part where you mention how much you’re looking to raise from investors and how you’ll be using it. Be sure to demonstrate how you’ll appreciate the capital. Go as far as to touch on the financial milestones you plan to reach.
To put it plainly, goals are fantastic. But the combo of goals and a game plan, including concrete benchmarks, are nearly unbeatable. When you’re talking about financial projections, tell them your future business story and back it up with actionable steps.
Remember that these slides are only a summary, and yet, it’s an excellent idea to have an Excel sheet ready for VCs that request more financial information. Still, this particular portion will display that you understand financial metrics. Plus, the projections are critical in terms of future funding, too.
Pitch Deck Design
As mentioned at the start, you need to tell your business story. However, outsourcing your pitch deck design is undoubtedly a smart move. Remember, use your time on developing your content, and delegate the creative part to a design pro.
Besides, VCs are more concerned with content than a sleek design. The aesthetics of the presentation should focus on cohesiveness rather than the stellar assembly. The best part? Plenty of creative individuals and organizations offer creative services for these types of projects, such as:
Social media, especially LinkedIn, is another excellent resource for finding a freelancer or local designer to help you with the project.
The Take-Home Message
To sum up, according to Rogers, three chief problems with pitch decks stand out:
- Lack of preparedness
- Not knowing your business economics
- Not being an industry expert or understanding your market fully
If you can overcome these obstacles, then you’re well on your way to creating a solid pitch deck that will attract potential investors. Still, prepping for a Series A fundraiser might seem overwhelming, but using the advice in these blog posts will help you to conquer your to-do list and make a stamp on your industry.
As your company evolves and you take on new professional endeavors, you’ll face unique exposures, as well—especially during a Series A growth spurt. Founder Shield specializes in knowing the risks you face at each stage of development, and we work to make sure you have adequate protection. Feel free to reach out to us, and we’ll walk you through the process of finding the right policy for you.
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