When raising funds from investors, nothing is more important than an effective pitch deck. Your pitch deck is your opportunity to tell your company’s story in a slick, yet comprehensive manner.
To give yourself the best chance of a successful raise, it is vitally important that your pitch deck gets across enough information for investors to make an informed decision about whether or not they wish to invest into your business, whilst ensuring not to bombard the reader with surplus information that makes your deck a boring read.
Clever use of diagrams and tables can help you convey more information without making the deck too wordy. It is also important to stick to one presentation slide, per piece of subject matter. But what are the key messages that need to be conveyed to investors through an effective pitch deck?
We have looked at thousand of pitch decks over the years and these are the key pitch deck sub-headings we have recognised, that are vital to an effective pitch deck and put you on the best possible path to a successful fund raise.
Problem – What is the problem you are solving? This is a fundamental, yet simple element often overlooked in pitch decks. Are you solving a genuine problem that a large number of people might pay for? It is important that you are able to convey a problem that investors are able to relate to. What are their pain points that you are addressing?
Solution – What is your solution to this problem? How are you taking away the reader’s pain points? How can you make their life easier?
USPs/Benefits – What are your Unique Selling Points (USPs) and why should customers use your solution over any others? Is your solution patented or protected somehow?
Business Model – How does your business make money? Are there multiple revenue streams? Do you see any additional future revenue opportunities?
Roadmap – What is your 3-year plan… your 5-year plan and beyond? How are you going to get there? Emphasis on your product roadmap is needed here and the funds required to get there. How long before you reach breakeven and move into profit?
Team – Who is in your team? What relevant experience have they had? Have they had any successful exits? This is also an opportune time to show potential investors the current ownership of the company via a share cap table.
Competition – Who are your competitors and where do you see yourself in comparison to them? Where does your business hold a competitive advantage? Could any of your competitors be a potential acquirer of your business?
Target Market – Who will your customers/users be? You should be specific here and get down to the core target market. How will you attract them?
Traction – What have you done to date? What are your achievements? Do you have a minimum viable product (MVP) or have you moved into revenue? Where are you currently, in relation to your roadmap? The more you have done and the more you have achieved, the more your business will feel “de-risked” from an investor’s perspective.
Financials – You should show an abbreviated cash flow for at least the first 3 years of your operation, up until your planned exit. These do not need to be detailed, but rather an abridged table detailing your top-line figures. You can always show investors full and detailed financials separately, should they ask for these.
Investment Opportunity – How much are you raising this round and at what valuation? What is your funding plan beyond this round and how much more capital are you going to require, to guide the business to the various points on your roadmap and ultimately, to an exit?
Use of Funds – How will you deploy the funds raised in this round? Where will the funds raised in this current round take you in terms of your roadmap?
Growth Plans & Exit Strategy – Where are the growth opportunities for the business? What are the likely exit scenarios and at what valuation? What is the likely return on investment for investors in this round?
There is no science to a successful fund raise and unfortunately you can never be guaranteed that you will be able to raise the funds you need in order to take your business forward. There are however things that you can do, that can make a massive impact on your fundraising efforts.
Having an effective pitch deck will certainly help; and ensuring you have most of the key elements above, covered in your pitch deck, will give you the best possible chance of success.