A well-crafted pitch deck can be a game-changer for any startup raising investment. Understandably, it serves as one of the most prolific gateways to potential investors, allowing the opportunity to unlock financial backing and propel growth. As a condensed version of a business plan, it is designed to captivate, persuade, and leave a lasting impression. The difference between securing the investment and losing interest often hinges on how effective startups are at conveying their vision and value proposition, so creating a compelling pitch deck has never been more important.

To assist you in creating a wining pitch deck that not only impresses but also lands in the right hands, we will be looking at the steps you need to take prior to serving up your pitch deck, as well as the fundamentals you need to include.

Whether you’re ready to raise or not, being well-versed in how to prepare to pitch will be valuable for when the time comes.

Understanding Investors

Don’t make the mistake of pitching to every investor you see on a list; they are not a homogenous group. They come with diverse backgrounds, interests, and investment criteria that can span across fintech, retail, or sustainability. Instead, tailor your pitch deck to resonate with investors interested in your industry to capture their attention and generate genuine interest.

So, before you start designing your deck, you need to find your people.

There are quite a few platforms that will allow you to search by industry to find relevant investors, for instance, Crunchbase or even LinkedIn. Through these platforms, you’ll be able to conduct research to understand their focus, previous investments, and track record.

Whenever you discover an investor that you think is the right fit, it’s a good idea to ask yourself a few questions:

• What stage does the investor typically fund?

• Can the investor provide more than just capital?

• What is the investor's reputation in the startup community?

• Can the investor provide follow-on funding and support for future rounds?

Once you’ve created a list of investors that fit your startup, and you've established that your missions align on paper, it's time to closely examine your business to ensure it’s the perfect fit for them. A successful founder/investor relationship goes beyond financial support. It involves a strategic and collaborative relationship where all parties work towards a singular goal. Demonstrating that your startup is the perfect fit indicates that you’ve done your due diligence. This boosts the investor's confidence in your startup's potential and management.

Iron out any concerns

Being a promising startup is great, but investors will want to mitigate potential risks and ensure their investments align with their overall strategy. This is where you take the time to put yourself in their shoes and anticipate what these might be. It may seem unconventional to do this, but it could offer incredible perspective into areas you may not have considered whilst wearing your founder hat. By proactively addressing potential questions ahead of any conversation with an investor, you show that you are well-prepared and serious about your venture.

Building on the insights we shared last week regarding the essential steps before creating your pitch deck and presenting to investors, let us move onto the core elements of crafting a pitch deck that captivates and converts…

Social Proof 

Social proof refers to the phenomenon in which people rely on the opinions and actions of others to make decisions, especially when they are unfamiliar with a product, service, or experience. For instance, in the case of e-commerce, social proof allows consumers to make better purchase decisions based on reviews, which increases buyers confidence and confirms whether a product or service is worth the investment.

In the context of raising investment, social proof provides evidence that your business is endorsed by others in the form of positive reviews or past success.

As well as reviews, you can demonstrate social proof through:

• Industry Awards

• Industry expert endorsements

• User traction

• Partnerships

• Previous investment

By incorporating some or all of the above, you’ll increase interest in your business. Remember to provide evidence to support the social proof you present to increase trust and leverage opportunities for growth.

Tailor your Pitch

As previously stated, knowing who you’d like to invest in your business and why increases your chances of raising investment, so it’s important to tailor your pitch deck to suit. A tailored pitch deck shows that you’ve done your homework whilst differentiating yourself from the competition.

Customisation can also allow adaptability, whether you’re pitching to individual investors, venture capital firms or angel groups. This flexibility allows you to adjust your pitch based on each audience's preferences and requirements.

Now, let’s look at the key elements that make up an impactful pitch deck, starting with problem and solution:

Problem and Solution

The problem and solution portion of your pitch deck allows you the opportunity to share how your product or service will address the pain points and needs of your target audience.

Problem:

Clearly define the problem your business solves or aims to solve if you haven’t already launched. Highlight how it will benefit your target audience - showing that you understand their challenges. Support your argument with data and insights to emphasise the problem's relevance and urgency.

For example, if you are developing a project management tool that offers planning, tracking, and management capabilities - emphasise how the problem of productivity and lack of project visibility affects users. Utilise statistics on project management errors, collaboration issues, and inefficient resource utilisation to bring to light the gravity of the problem you plan to solve.

Solution:

After outlining the problem, detail your innovative solution and how it will address the identified pain points. Focus on the features and functionalities your product or service will deliver to tackle user challenges.

For example, if your project management tool offers industry-based project management templates, explain how it will empower users to simplify complicated processes and focus on efficiently handling their project timelines.

Top tip: Incorporate real-world examples and case studies to better illustrate the problem and solution.

Market Research

Market research is the bedrock of every business plan and pitch you’ll make to potential investors. It is the crucial process of gathering all the data necessary to validate the demand for your product or service. Through comprehensive research you’ll identify the current size and growth potential of your market share, and pinpoint any gaps that your business can capitalise on to gain a competitive edge.

Market research can be categorised into two forms:

Primary market research

• Primary market research involves collecting data directly from the source through surveys, observations or interviews. This form of research is typically carried out by the researchers or organisations seeking data to address very specific objectives.

Secondary market research

• Varying from primary market research, secondary market research involves the collection and/or analysis of existing data from sources that are publicly available. SMR relies on research sources such as industry reports, company reports, government data or academic research.

Both forms of research are important to help businesses make more informed decisions, understand their market, and develop short/long term growth strategies. When it comes to your pitch deck, a combination of both primary and secondary market research should be utilised to provide an expansive view of your market and consumer landscape.

Within the realm of market research here are a few areas to address in your pitch deck:

• Current market share and growth potential. Break-down the market size in terms of revenue and potential growth rates. A great way to show how valuable your market is based on growth is to assess the Compound Aggregate Growth Rate (CAGR). CAGR is a financial metric used to calculate the annual growth rate of an investment, business, or market.

• Target market and customer segments. In this portion of your market research you will need to provide a well defined analysis of your target market and customer segments. You can do this by showcasing a detailed table of your ideal customer, their behaviour, demographic, where they spend time online, buying frequency, etc. The more you know about your customer the stronger your strategy to find and convert them into paying customers.

• Competitor analysis. Your competitor analysis can be included within your market research or under a separate heading of its own, but for the purpose of this guide, we will include it within market research. Take time to do your research and identify who your competitors are and assess their strengths and weaknesses. When assessing competition in your industry, it's essential to consider three types of competitor categories: direct competitors, secondary competitors, and indirect competitors. To illustrate, let's take the example of Tesco and Sainsbury, which are direct competitors as they offer similar products and target the same customer base. On the other hand, secondary competitors like Zoom and Uber serve the same purpose of facilitating meetings, but through different means. Meanwhile, KFC and SkinnyDipped, as indirect competitors, both provide food options, but their goals and offerings are distinct. Once you've identified and analysed your competitors, including their strengths, weaknesses, and market share, you can leverage this information to your advantage. By showcasing your unique value proposition and the advantages that set your business apart from the competition, you can differentiate yourself in the market.

• Pricing Strategy. How you price your product is unique, so it's important to choose a price point that aligns with your market positioning and business model. Pricing will have an impact on client acquisition and revenue, so do take some time to assess what price point is best for your business. Two of the most popular pricing strategies at the moment are tiered pricing and fixed pricing. The tiered pricing strategy is typically used when the cost of a product or service varies depending on the quantity of usage a customer requires. A fixed pricing strategy on the other hand, offers an unchanging rate for all customers regardless of their usage rate or purchase volume.

Remember, each business is unique, and there is no one-size-fits-all pricing strategy. Consider your target market, competitive landscape, and business objectives before making pricing decisions.

Remember that your market data should tell a compelling story about the opportunity your business offers and well as potential growth.

Business Model

A business model serves as the fundamental anchor of every successful business. It forms a robust framework that outlines the entire process, from the creation of your product or service to its delivery to customers. At its core, a well-crafted business model ensures not only profitability but also lays the foundation for sustainable long-term growth. It encompasses the intricate interplay of value creation, customer engagement, and financial viability.

A business model should cover:

• The unique value or benefit a product or service offers its customers.

• A specific segment within a market that your business will sell to.

• How your business aims to make money. This includes pricing structure, subscription fees, etc.

• Various forms of distribution channels, which may include partnerships and distributors, online/direct sales or retail stores.

• The strategies you’ll use to engage with your customers from the moment they interact with your business, all the way through to sales and sales after care.

• All assets, intellectual property, employees and technology you’ll need to run your business effectively.

• Any key partnerships that will work to enhance the performance of your business.

• A thorough breakdown of all costs associated with keeping your business operational. Understanding your cost structure will ensure that your business remains profitable and you’re better able to better allocate resources.

Team Strength

Your team is the backbone of your business. Their capabilities play a critical role in the overall success and growth of your company. You’ve probably heard it before, but investors tend to value your idea as much as your team, so take the time to showcase any achievements that will work to demonstrate your team’s ability to carry out the work required for your business to thrive.

An example of how to present your team:

• Introduce founder/s and key leadership roles within your team.

• Share a short background summary of each team member, along with relevant experiences and accomplishments.

• Include any industry awards or internal recognitions your team has received.

• Highlight previous projects they were involved in and delivered successfully.

Traction and Milestones

By detailing traction and milestones you are providing evidence of your businesses viability.

Traction can be summarised as progress and momentum a business can measure. You can include customer adoption, revenues, and other key performance indicators (KPIs) that provide evidence that your business is working and there is market demand.

Milestones relate to company accomplishments that have been achieved or being worked towards. Some examples may include partnerships, awards, product development goals, key hires or funding rounds.

The overall aim is to provide evidence of growth potential.

Financial Projections

Financial projections are a glimpse into the future of financial performance of your business. These projections will showcase expected expenses, revenue and profit over a three to five year period. 

When drawing up your financial projections, it’s important to find the right balance between ambition and conservatism. Although being overly optimistic can raise eyebrows, try not to be too conservative either. This way you project a healthy financial runway, whilst presenting the full potential of your business.

Crafting a winning pitch deck requires a delicate balance between data-driven evidence and engaging storytelling. As you embark on your entrepreneurial journey, ensure that each component of your pitch deck is thoughtfully crafted to communicate a cohesive and compelling narrative. Embrace innovation, tenacity, and a forward-thinking approach, for it is with these qualities that your business can navigate the path to success and thrive in the competitive market landscape.