We need to define a better way of pitching and here’s why
How start-ups raise funding hasn’t changed for dozens of years, with most founders acknowledging that the process is complicated, even though they now have more options for funding the growth of their business without needing to give away equity. At the same time, data is used more frequently when decision-making in venture capital investments.
These solutions play important roles in providing more options to founders, but because of their nature, they ignore the actual process of how people make decisions. So you could say the gap is widening between the human and the data, and I say we still need stories to help us come to a decision that we think will be satisfactory.
That’s why the relationship between founders and investors will continue to start with the pitch. But is there a version of a pitch deck that answers everything that both parties need in the process?
Below, Serkan Ferah, co-founder of Pitchspace, outlines some of the most obvious ways in which pitching should change to help both investors and founders.
The pitch poses different challenges for investors and founders
The first thing that needs to improve is the pitch itself – investors become fatigued going through thousands of pitches that are created in a different format. They need to understand how the pitch is structured and what information is where each time a new one lands at their door. It is for this very simple reason that investors lose out on some of the best deals available to them.
On the other hand, founders spend an exceptionally long time and dedicate a lot of effort to try and figure out how to put together a compelling pitch deck that speaks the investors’ language. Despite their time and effort, so many founders will fail to raise funds simply because of a poor pitch deck, even if their ideas are extraordinary.
Pitch deck templates don’t solve the real problem
It might seem logical that pitch deck templates would solve this problem, however, using a template will only address the design element of the deck, rather than the bigger and more significant issue of the pitch itself. In fact, using a template can create an even bigger problem for founders, as it can confuse them by failing to place all the elements in the right contexts. Founders need to be clear on which aspects of their business they need to explain and how to best do this, as well as knowing how to give answers to specific questions from investors, which can be difficult, especially in those early days.
We need to standardise pitch decks
The first step towards creating a successful pitch is for founders, especially those in the early-stages, to really understand what it takes to raise funding from investors, how they can best communicate the value that their start-ups offer and most importantly, why they need to do this in the first place. Investors will receive hundreds of pitch decks and yours needs to cut through the noise and be clear to truly standout.
Secondly, we need to standardise pitch decks – it is impractical and time-consuming for founders to spend weeks and thousands of pounds putting together a pitch deck to then have to go in and change it to adapt to an investor who has a different approach. The standardised pitch deck should be clear, it should outline the value that the start-up can bring and, most importantly, it should answer any potential questions that investors might have, especially the question that gets asked every time - what’s the problem that you’re uniquely positioned to solve? To create a successful pitch deck, founders have to think like angel investors and venture capitals, who want to use their time and energy to execute the best possible deals that fit their criteria, without having to waste time looking for answers to (to them) logical questions.
While creating PitchSpace, we knew that the only way to achieve this was to create a way to pitch that is universal, easy to understand and simple to engage with. We had to create an automated pitch builder that pushes founders to find the core elements of their business which in many cases made teams rethink their strategies and prompted them to build a stronger proposition.
A standardised way of pitching not only makes things easier for the ecosystem, but it also helps start-ups understand if they are ready for investment, while also helping investors evaluate pitches and improve their investment strategies.
