It’s not always easy to raise capital for a new idea. Whether you’re just starting out or have been in the game for quite some time, you need significant preparation in order to make a favorable impression on potential investors.
You need time to research the validity of your idea, and to work out its details and technicalities. When you already have a comprehensive and viable business plan, the next step is to create a pitch deck that will make investors sit up and listen.
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Most entrepreneurs make the mistake of including too much information in their investor pitch deck. They take their business plan, slap it into PowerPoint, and end up with a ridiculous amount of slides. Guy Kawasaki shared his experience of having to sit through pitches as a venture capitalist. He wrote,
…sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a constant ringing in my ear, and every once in while the world starts spinning.
If you were in his place and you had to sit through a presentation that’s not only uninteresting but seems never-ending, wouldn’t you feel the same way?
We can’t allow investors to keep falling over due to vertigo, so here’s what you need to know about creating a powerful investor pitch deck:
What should a pitch deck contain?
A pitch isn’t about closing in on an investment just yet. Instead, think of it as an introduction. Just as you would with someone you just met, your pitch should serve as a conversation that will allow investors to learn more about your plans.
Your pitch deck doesn’t need to contain all the data from your research. According to Kawasaki’s own 10-20-30 rule of PowerPoint presentations and Chance Barnett‘s model for investor pitch decks, it shouldn’t have lengthy paragraphs or complicated graphs. All it needs are the things investors initially want to know:
- Problem – Discuss the problem that you’re aiming to solve. Identify who is most affected by it.
- Current solutions – Give a short rundown of how this problem is being solved currently. Point out what’s missing from these solutions.
- Your solution – How do you plan to solve the problem? This is your chance to introduce your product/service and its story.
- Underlying magic/technology – Go into your main selling point. What makes your product/service different? What’s the “secret sauce”? Include a demo if you can.
- Business model – Discuss your key revenue streams. This is where you identify your target market and show off your numbers—pricing, revenues, conversion rates, etc.
- Marketing and sales – Go into your marketing strategy. How do you plan to expand your customer base? What’s your targeted growth rate and how will you get there?
- Competition – Where do you stand in the overall market space? Identify your competitors and explain how you’re different.
- Team – Introduce the other people on the project with you and the key roles that they play. Show off their credentials and relevant experience.
- Projections and milestones – Explain your financial projections, as well as your current milestones. Highlight some press mentions, partnerships, and other accolades.
- Status and timeline – What is the timeline of your project and where are you at the moment?
- Summary and call to action
These are the information that investors need to know to be able to tell if your plans are a perfect match for them.
Tips to keep in mind when working on your pitch deck:
- Cover only the most basic parts of your business plan and be as concise as possible. There will be time to go into specifics in the future. To keep it short, discuss only one concept per slide, and limit yourself to only 10.
- Let the investors dive into the minute details on their own. Give them separate documents like executive summary, patent details, financial and marketing reports, and other technical explanations. They can go through these documents after your pitch.
- The design of your pitch deck is important. Enhance your presentation with color schemes, images, and fonts that are consistent with the story you’re telling. We’ve written a lot about PowerPoint design in the past. Read up on some of our blog posts if you’re looking to work on the aesthetics yourself. You can also drop us a line if you want a more professional touch.
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Conclusion
An effective pitch deck doesn’t need to have every single detail of a business plan. Investors don’t have the time to sit through presentations that are too long and vague.
The point isn’t to immediately seal a deal, but to introduce your idea as something that has great potential for success. Your pitch deck should be clear and concise, showcasing only the key points of your vision. Be brief but memorable.
References
“The 10/20/30 Rule of PowerPoint.” Guy Kawasaki. 2005. Accessed July 11, 2014.
Barnett, Chance. “The Ultimate Pitch Deck to Raise Money for Startups.” Forbes. May 9, 2014. Accessed July 11, 2014.
Featured Image: ImagineCup via Flickr
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