Written by Donna Griffit, Corporate Storyteller and Pitch Alchemist
Pitch decks are a great exercise in being able to share your incredible idea with investors - and the world. So why when you mention creating a pitch deck to a founder do you see them wince in agony? It’s because they are probably in the throes of a vicious circle that has them writing, editing, iterating, presenting, getting feedback and lather rinse repeat. And this goes on and on - wasting their precious time, usually yielding mediocre results at best.
Real life isn’t like Shark Tank, people don’t throw money at you, so you need a stellar deck that can get you the next meeting with VCs who could change the fortunes of your business with one swish of a pen. That’s a massive deal for any founder.
The problem is so many founders get their pitch decks completely wrong. It’s no wonder that 99% of founders fail to get funding and I can tell why. I’ve seen thousands of pitch decks over the last decade and it’s incredibly frustrating for me to see people make the same mistakes over and over. A few small tweaks could have been the difference between whether their company takes off or not.
Your company is your life but to an investor, your pitch deck is just one of the potentially hundreds they will see. Everyone tells venture capitalists that their idea is the “next big thing” and they all believe it from the bottom of their hearts. Since investors can’t and won’t fund every startup that approaches them, making sure your pitch deck shines is crucial. Here are 5 tips that will help you get there.
#1 Story is everything
Your investor pitch is a story and you, the entrepreneurs, are the characters (hopefully the protagonist, rather than the antagonist.) Don’t throw random stats and information at Investors. They are busy people, you need to tell them a story they can believe in.
Stories are so underrated but according to Yuvah Noah Harari, they are the reason we outcompeted the Neanderthals. They are what allows humanity to cooperate on a mass scale; all you need is for at least one investor to believe in your story and to want to join on your journey - because they see a path to a better future.
We all know the classic structure of a story but it never gets old. You need to do the same thing in your investor pitch deck. Yes, the classic problem/solution, villain/hero, gap/opportunity. It’s worked for tens of thousands of years, and if done well, it will work for you too.
First, outline the problem - it can be your origin story, how you came up with the idea and then how it’s a shared problem across the industry (with numbers to back it up.) You can use a story that recently happened, like Target being hacked, again… Or even tell the story of one of your clients’ and their struggle in the world before they discovered you.
Next, tell how your company is going to solve it. In a simple, clear, coherent way that even my 8 year old daughter would understand. Then, you can showcase how it works - again, using a story to illustrate it - preferably a user story of a client of yours (and yes, it could be the one you used in the problem section.)
Many of the most famous startups in the world have incredible founding stories: Look at Airbnb. The founders were struggling to pay rent but realized many others couldn’t find a hotel room for a design conference. This was a big problem for those people and the solution was to allow them to stay at someone’s home for a fee. (At first, on an air mattress thus the name Air Bed and Breakfast; they even provided early users with cereal, Obama O’s to feed their guests with.)
Initially, investors didn’t think people would go for this plan, sleeping in a stranger's home. But the numbers told another story. And investors can’t argue with numbers. They pivoted their model over time - but the core story remained the same - people need affordable places to sleep, homeowners or renters love to make extra pocket money, and let’s make it safe and fun - boom - a story that resonates with millions around the world.
Your startup didn’t spring out of thin air, so think about your founding story and weave it into your pitch deck to make it relatable and memorable, showing your true connection, passion and drive.
#2 Focus on “why now?”
Investors receive at least 100 pitch decks a week. They might read them all and might not. They might like your idea, but you need them to care right now and see the immediate relevance if you want them to invest.
Think of the Eisenhower Matrix, where tasks are split by importance and urgency. Your story might convince them of its importance, but they’ll pick something else if it shows it’s urgent too.
There are a few ways you can do this:
- Can you prove there is high demand for what you’re doing?
- Are people willing to spend money to solve this pain? Can you prove this with numbers?
- Are there underserved trends?
- Has the law/regulation shifted to allow space/demand for new entrants?
- Is there a wider economic shift you can capitalize on?
- Are there signals in the market showing that others see it as hot? (i.e. major rounds or acquisitions of others in your competitive landscape)
Hopin is the fastest growing European startup ever. It went from being worth $200M in late 2019 to over $6B today. Investors fought each other for the honor of investing because Hopin was perfect for what happened in the world in 2020. Their virtual conference event software could replicate real life interactions while everyone was stuck at home in lockdown.
I can imagine if their founder had shown his pitch deck to investors 5 years before, there would have been far less of a frenzy. Fun fact - going back to Airbnb - Brian Chesky, the Co-Founder and CEO released 7 rejection emails from investors when they were raising at a super low valuation. If only these investors could have known… you need to help them - hand them the crystal ball, turn the FOMO fire up and make them believe the time for you is now.
#3 Be clear how you will go to market
You might not have the money right now to have a sales team, but you need to convince investors that you’re thinking about it and grabbing the low hanging fruit on your way to building an all star sales team. It’s best to think about this in realistic phases so they can get on board with your plans.
Your go to market strategy is how you will penetrate the market and it must be plausible. Content is king and can be cheap, but going viral is a dream not a strategy.
One great way to show you are grounded is to use the Customer Acquisition Cost (CAC) in your explanations. You want to show how you can be cost effective with the money your potential investors will give you. They want to see you’ve done the research to see what channels work best for your startup.
Investors see so many pitches so if you have original ideas, share them. Guerilla marketing strategies show creativity and can be highly effective when they are targeted.
Monica Ohara of Datascore (acquired by Lyft) explains how to pick your targets: “Finding smart avenues of growth all begins with brainstorming where your target customer ‘hangs out’ online. Do they read certain websites? Are they active on any social media channels or forums? Once you identify where they are, you can put a plan together about how to engage with them.”
#4 Why you and not the competition?
First, and oh so important, never say anything bad about your competition. (I mean never.) If you’re a new startup and telling seasoned investors that Apple and Microsoft, or Venture backed startups are doing it all wrong, well, that’s not the way to be taken seriously. Not only that - negativity reflects poorly on you, especially in a place like Silicon Valley where everything is “great, awesome, and terrific.” They will be left wondering what you might have to say about them behind their back...
You want the focus to be on why you’re great, not why other competitors are bad. Start your phrasing with “What truly sets us apart is…” rather than a list of attacks on everyone else.
Do show you understand the state of the market though. You can do this through a magic quadrant, petal diagram or marketscape after you group them into a few types. Show them you know the size of the entire market too and what share you think you’ll be able to gain and why.
Whether you go top down or bottom up, prove that the market size is lucrative. Venture capitalists need big potential numbers to make it worth investing in your business.
Clubhouse is a great recent example of a company that did something different. The social media space was crowded, but none were focusing on the audio experience that had grown so popular in the past several years with podcasts. So they carved out their niche and proved there was demand, and the others soon followed suit.
#5 Make them believe in your future
The final thing is to demonstrate you have a plan and can be assertive. Say exactly what you want: “Seeking $X million for….” (never put a straight up valuation on the slide.) Don’t give a range, tell them how much you need to reach your next big phase. And then explain the big allocations - mainly development, sales/marketing, team expansion, etc. You don’t need to itemize it down to paper clips - there will be time for detailed excels later.
Then - the Round Objective - tell them what major milestones you’ll hit in the next few years and how you plan to get there, and the KPIs (Key Performance Indicators) that will reflect this success. Critically put the two together and explain how the money they give you will help you to achieve your targets. Be as precise as possible because many startups mismanage their funds. A whole 38% of startups fail because they run out of money. You don’t want investors to think you’ll be one of this group. One Silicon Valley Partner said to me that when he’s signing a check, he’s thinking about the startup’s next round - because if he doesn’t join in, this is a poor signal for other investors. So he must see that your plan is achievable.
Many investor pitch deck mistakes are fixable and you can stand out simply by getting the basics right and focusing on your story so investors can relate.
My final note is that there is no magic number for how many slides. I’d rather you have more slides that are uncluttered than cramming everything into 10. You can always have a send out version that has fewer slides with more text on them - otherwise you’ll compete with your own slides.