How to wow investors with the perfect pitch deck
Startup founders should be excited. In the first half of last year, more venture funding (£220 billion) was invested across the world than ever before. It’s a fantastic time to realise a business idea. But it’s also a competitive one.
Since the turn of the millennium, the number of SMEs in the UK has grown by 61%. So while investors are handing out bags of money, there are truck-loads of competitors. Founders need to communicate every ounce of their business’s value to claim investors’ cash. The first and foremost place to do this is in a compelling and confident pitch deck.
Even though most recognise the value of an awesome pitch deck, founders are still failing to play the right tune. At SeedLegals, we close more funding rounds than any other business in the UK - we’ve worked with over 35,000 companies so here’s what I've learned along the way to wow investors with the perfect pitch deck.
Rise to the investor’s level
Startups often suck entrepreneurs into their own worlds. It can take every ounce of your focus to make and execute decisions. But when raising funds, you need to switch focus: you need to think like an investor.
Many entrepreneurs don’t realise they operate on a different wavelength to investors. Entrepreneurs are working at ground level; investors are looking down like satellites. They’re asking themselves: what are the emerging trends? And where does your business fit into that?
Investors think big. And all too often, entrepreneurs think small. Ridge Ventures partner Brendan Baker described it well, saying that investors are “thinking about how the world is changing, where that creates opportunities, and then they’re trying to find companies that satisfy those opportunities.”
This tip is crucial when creating a pitch deck. You’re making it for investors, so you need to imagine what will matter to them, and then deliver that. Do this, and your deck will rise from ‘already forgotten’ to ‘save for later’.
Don’t try to re-invent the pitch deck…
Most pitch decks follow a similar template for a reason: it works. Yet every now and again, founders try to gain an edge on their competition by throwing out decades-old standards. Don’t.
Similar to writing an academic paper or press release, there’s a reason there’s a conventional way to write a pitch deck: the people you’re writing it for expect a certain set of information. The ‘standard’ pitch deck provides all that information, and mixing it up could mean you lose some detail, or investors can’t find it. And investors don’t have the time to ask.
In short, here are the points you need to address:
The problem - we found a really interesting problem that affects real people.
The solution - our idea helps real people by solving that problem.
The product - ok, this is how our idea works.
The market - these people might pay real money for our solution.
The evidence - look! People are already paying for our solution.
The competition - there are other solutions out there, but this is why ours is the best.
The team - here’s why we’re the best people to realise this solution.
The ask - this is what we want from you.
… But remember to tell your story through it
While you need to include certain details investors expect, don’t allow your pitch deck to become a series of loosely connected slides. Tell a story. People remember stories.
To do this, think about how your business arrived at its current coordinates. You’re solving a problem, but how did you discover that problem? And why did you decide to choose that specific solution? What else did you try?
It’s a tough ask when research suggests investors look at a pitch deck for an average of 3 minutes 44 seconds. You need to be succinct. It could make the difference between a follow-up call and disappointment.
Be bold and make predictions
Your pitch deck should show investors who you are and what you’re doing. But it should also show where you’re going. After all, investors want to see a return on their cash so they need to see your idea has the potential to make money in future.
When making projections, be bold but honest. And by that I mean don’t shave potential earnings off because the figure scares you, but never inflate a calculated forecast. The former will undersell your proposition. The latter will ruin your reputation with investors who will, I assure you, interrogate your projection to discover where it came from.
Consider your sales pipeline, your conversion rates, and the time it takes to close a sale. Be prepared for questions. It can also help to work with someone outside the organisation to make these calculations. Their unbiased approach will steer you away from the mistakes mentioned above.
Cut, and then cut again
With a simple search online, you’ll find thousands of articles, blogs, videos, and podcasts giving advice on pitching your startup to investors. They almost all share one common insight: your pitch is too long.
You’re an entrepreneur. You’ve probably tipped years into this idea, maybe your life. We get it. You want to tell everyone all there is to know about it. But you’re going to have to be ruthless. Adjust your mindset: investors don’t need to know everything. They just need to know enough.
When choosing the parts to cut and the parts to keep, consider what you would tell someone in one sentence to convince them to hang around for the next sentence. Then what would you tell them in the next sentence to secure them for a third?
Tell investors the most fascinating parts of your business. Let them ask to find out more.
