How to create a pitch deck?
There are three levels of investor relationship:
The investor understands what the founder wants: the structure issue, intelligibility, coverage of all essential aspects (rational component).
The investor likes what the founder says: the problem solved by the startup, the market, the team, the product.
The investor believes that the founder could build a fast-growing startup, take a significant market share and, as a result, bring him the desired profit. And that this founder can do everything that he promises in the pitch deck (emotional component).
The pitch deck is responsible for the rational component of communication, and the founder's ability to pitch and communicate is accountable for the emotional part. How to develop pitching skills, charisma, inspire interest in your work - we tell you in Sannacode. How to make a pitch deck that will delight the investor, and he will exclaim: "Where have you been before?!" - we analyze in this article.
What is a pitch deck?
A pitch deck is a presentation in a concise and accessible form describing your business plan and aimed at a specific audience, mainly investors. The pitch deck basis is the proper structure. The goal is to fund startups from investors. In the financial and banking sector, the so-called pitch book is marketing presentations describing the main features of the offer of shares, shares for purchase.
How long should a pitch deck be?
Various experts will tell you that a presentation should be five slides, eight slides, or ten slides. There are no particular rules. The pitch deck should support you with a comfortable presentation of your ideas in the time allotted for this. It usually means one slide for every minute of the presentation. So if you have 15 minutes to speak, you should leave 2-3 minutes to answer questions. It's mean a 10-12 slide presentation is fine.
What should a pitch deck include?
Slide 1 - Investment summary
This slide contains a concise summary of the project and an investment proposal for a potential investor.
Slide 2 - Market
Here you can show the potential market size, the share of your startup in the market, opputinuties for growth (TAM, SAM, SOM).
Slide 3 - Problem
Any pitch begins with a description of the problem you are solving. No problem, no startup. Remember this.
Slide 4 - Solution
The solution is your startup. Explain how you can solve this problem and why no one has done this before. Describe the pros of your product.
Slide 5 - Company description
Don't duplicate information from the investment summary, but tell investors what is worth knowing about your startup.
Slide 6 - Business model
Describe your business model and earnings plan. If you already have a profit, show it.
Slide 7 - Traction and metrics
You should tell about key KPIs. It could be the number of users, the cost to attract a customer, profit, any indicators of the unit economy. Show what is beneficial to you, such as successful pilots, sales to large companies.
Slide 8 - Competitors
Tell investors who your competitors are and why you are better. You can put a benchmark analysis to your pitch deck.
Slide 9 - Scaling strategy
Describe your future goals and the strategy that will help the startup become a market leader.
Slide 10 - Milestones
Your pitch deck should show where you start, where you are now, and your plans for the future. Focus on essential stages of your startup's development.
Slide 11 - Team
Tell about the prominent participants in your startup, their experience, and key competencies. Your team should include at least one "rock star.”
Slide 12 - Contacts
Include links to your social networks and startup site.
These are the main slides that are important to include in your pitch deck. You still have at least three slides, which you can use depending on the company’s specifics. For example, describe the peculiarities of the functioning of artificial intelligence on your platform or attract an investor’s attention by cooperating with eminent clients.
3 key factors of an awesome pitch deck
The market size should be big enough. On average, the market should be at least $1B because every investor dreams of a unicorn (a startup with a capitalization of $1 billion-plus).
If the startup has success and takes at least 5% of the market, it will have $50M in revenue. With a multiplier for high-growth tech startups of 20x, the capitalization is $1B ($50M (revenue) * 20x (multiplier)). That is, the investor gets his unicorn.
The market size should actively grow in the future. Otherwise, you must be competitive with other businesses to get more share, which is not a perspective strategy (large marketing budgets, less chance of success, etc.).
It is important to show 2-3 main drivers because the market will grow in the future (technological, economic, industrial changes, and prerequisites). The average CAGR that investors consider sufficient is 14%.
Investments are given to the founders personally, not per a project, not per a product, not per a market, but privately to specific people in whom the investor. The investor believes in the team.
All key competencies are closed by team members. But you should have plan B for extra expertise. For example, you can attract an advisor with extensive experience in a particular industry.
Your team should have clear and relevant experience. We recommend telling about specific, measurable results that a person has shown. For example, the revenue growth that he provided for the company, the exit of the startup he launched, any professional achievements relevant to the current startup, and show that a person knows how to work for a result.
You can also include well-known brand names, companies that team members have previously worked with, and education if these are top universities.
The problem that a startup solves is more important for an investor than the solution. A startup has many pivots during its life cycle. So6 when it steadily takes its market share, with a probability of 99.99%, the product will already be different.
What should be the problem:
Understandable: in 1-2-3 sentences, the problem can be explained in such a way that any person who is not immersed in the industry and hears about the product for the first time will understand
Validated and highly worried about the client: the client is ready to pay for solving this problem right now. The problem can be exacerbated by relevant statistics, numbers, graphs, and authoritative opinions from trusted sources.
Pitch deck template
As an excellent example of a pitch deck, we took presentations from the most prominent accelerators and foundations. Let's take a look at each of them.
American startup accelerator founded in 2005. Recognized as one of the most successful in the world.
American startup accelerator. The second most famous in the world after YC.
The world's most successful venture capital fund, founded in 1972. The companies that Sequoia Capital has invested in are worth more than $ 1.4 trillion.
The essential thing for accelerators and venture capital funds in a startup is the team and the founders in almost all rounds. The deal’s success will largely depend on your experience, expertise, and reputation in the market.
Almost everyone expects a fast startup presentation from you: 10 to 15 slides—the ability to express one's thoughts concisely and is highly valued among investors.
The pitch should describe the market, target audience, and uniqueness of the product. It is precisely what all those who were able to enter the IPO did.
Have a startup idea but lack technical expertise? The Sannacode team helps with product development from scratch. We can evaluate any idea and turn it into a working solution. Fill out the form on the website, and our specialist will contact you.