26 Feb The Perfect Pitch Deck: Startup Funding
Support for small businesses and startups has grown strong over the past decade. Everyone, from representatives in Washington D.C. to the celebrities of NBC’s Shark Tank, recognize that small companies and start-ups are the backbones of our economy. Investments in these companies help create jobs and promote innovative products.
The support is out there, and entrepreneurs, like you, are full of great ideas and powerful ways to implement them, but to make those ideas a reality, you need to raise capital. Whether all you have is just an idea or you are actively involved in the early stage development of your company, you’ve probably realized the need for startup or venture capital because money makes things happen!
However, raising money has become difficult. This is because “sub-industries” are emerging within existing industries which have made the broad product markets more competitive. But there are smart ways to raise funds for your ideas. Apparently, your pitch deck will contain the relevant information to convince your potential investors that the business plan you have in place is worth their investment, but the difficulty lies in successfully gaining their confidence, trust and getting the money.
The good news is, there is an excellent formula for a great pitch deck, which has helped entrepreneurs raise large chunks of money. In fact, Airbnb, a website for people to list, find and rent lodging, used these slides in their pitch deck, with similar content, which helped them raise millions.
Let’s have a look at how this pitch decks is designed;
Slide 1: Vision and value proposition
This is a one-sentence overview. It represents the value you provide to your customers. The value proposition drives the future success of your company. Make sure your investors get a clear understanding of how you are going to create value for your customers.
Slide 2: The problem
If you are not solving some problem in the world, you are going to have a long uphill climb with your business. In this slide, you should give a clear message on how your company or product will solve problems and who exactly has that problem. Basic economics teaches us that individuals place value on commodities that make life easier, add-on convenience to their daily routine or provide entertainment. Moreover, investors look for the answer to this these questions.
Slide 3: Target Market and Opportunity
Here, you will explain who your customers will be and how many customers are there. Investors want to see a large potential market for your business. Make sure to also demonstrate where your potential customers are located.
Slide 4: The Solution
Finally, you can explain your product or service. You might be tempted to put this slide closer to the beginning, but try to resist this temptation.The beginning slides give your investors answers to some of their most important concerns and pave the “ground” for you to present the real thing.
Slide 5: Revenue Model
You’ve identified the need for your product or service in an earlier slide. Now you will explain exactly how your product or service makes money. How does that need translate to the monetary value that your customers will pay? Many wise investors want the answer to this question.
Here, you can also discuss the competitive landscape of your market and tell your investors how your pricing fits into the larger market.
Slide 6: Traction and validation/roadmap
Investors want to see that you have reduced some aspects of the overall business risk. So if you already have some early adopters or sales of your product, mention those here. IF you have any other proof that validates your “solution”, present it here.
You can also talk about your milestones here and go into how you expect to achieve your goals. It is important to show investors that you have a roadmap and know how you’ll reach the destination.
Slide 7: Marketing and Sales Strategy
So how will you grab your customers’ attention? What will the sales process look like? Try to discuss in detail the key tactics you intend to use as a part of the marketing plan.
Slide 8: Team
Why are you and your team the right people to start and grow this company? What experience do you have that other do not have? You can highlight your and each of your individual team member’s past success.
Even if you do not have a complete team yet, identify the key positions that you still need to fill and why those areas are critical to grow your company.
Slide 9: Financials
Investors want to see your projected sales, income statement, and cash flow forecasts for at least three years.
Slide 10: Competition
Even if you are opening a whole new market, your potential customers are probably using other alternatives by your competitors. It is important to get detailed here and explain how your company will be faceoff competition. Typically, investors want to see that you have a plan which will give you a ‘sustainable competitive advantage.’
Slide 11: Investment and Use of Funds
Finally, it is time to ask for the money that’s why you have made this pitch deck right? Yes. However, don’t say that in the most obvious way. Here, you have to tell your investors how much money you are looking for.
What’s even more important is to be able to explain, why you need that amount of money and how you are going to use it. Go over how that money will help you achieve your goals.
The idea is to start out by highlighting a problem and demonstrating how you will solve that problem. Then you explain why your customers will place a monetary value on your solution. After that, you go into how you will obtain that obtain that value from those customers. Next, you will explain why you and your team is the right one to start and grow the business. Moreover, then you further convince them that you have a great business plan in place and show your projected financials. After that, finally, you ask for the money.
You need to adopt the right approach to get your funding and the slides discussed above, give you just that.