In general, pitch decks should include slides that cover the following topics:
- Market Potential
- Go to market
- Exit Strategy
- Deal terms*
- Contact Info / Call to action
* Required slides to be considered for Perfect Pitch competition. Other slides are strongly recommended.
State the problem you are solving and why now is a great time to solve it.
Do: Spend 30 seconds or less describing the problem.
Don’t: Camp out on the problem. Many problems are obvious to your users. Don’t waste valuable time talking too long about the problem. Most investors will grasp the problem. Focus most of your valuable pitch time on your compelling solution.
Describe your product, solution, or service and discuss why it’s better than alternatives. Better to focus on the benefits than the technology. For example, “our unique software saves lawyers 50% of the time needed to draft legal documents” instead of “our proprietary deep tech machine learning AI crunches through 1TB of data daily to provide 20 recommended drafts.”
Do: Describe your offering like you would if explaining it to your grandmother. Explain why you believe you have obtained product/market fit.
Don’t: Do not get too technical, which is the problem with most of the pitches we see. Many first-time CEOs are technical founders and love getting into the weeds on their technology. Problem with that approach is most, if not all, of your angel investors are not subject-matter experts. Many angels believe they have to understand all the materials presented in order to invest, and if they don’t understand it, they will not invest.
Highlight the key players on your team. The founders are the most important.
Do: Note who is full-time and who is not. Also, note how much capital the team has put into the company. Only list advisors who have offered significant time, money, or subject-matter expertise. LinkedIn profile links are helpful.
Don’t: Load up the team slide with a bunch of part-timers, consultants, advisors, and others who wouldn’t be viewed as impactful from most angels. If you only have two or three employees, that’s fine. Just do not make the company seem bigger than it actually is by adding a bunch of folks who really have little impact on the success of your business.
Provide investors with insights into the marketplace reception for your product or service.
Do: Highlight month over month growth. If pre-revenue, group prospects by milestones (e.g, number of app downloads, active daily users, beta customers, on a waiting list, etc).
Don’t: Stuff your pipeline report with very low probability deals or companies where the conversations are in the early innings. Savvy investors will ask to speak with key customers and prospects, so avoid traction hyperbole.
Provide your thoughts on how big the market is for your business assuming you capture 100% of the market.
Do: Provide a bottoms-up approach.
Don’t: Talk about TAM, SAM, and SOM unless talking to professional investors. Most people won’t know the differences, and TAM is really an inflated metric that has no basis is reality.
Highlight your competitors and demonstrate your understanding their strengths and weaknesses.
Do: Know your competition inside and out. Better than a quadrant showing your company as the best – up and to the right – provide a comparison chart with your top 3 – 5 competitors. Providing facts in the comparison chart – pricing, functionality, size of the competitors (# of employees, capital raised, or sales), etc. Subjective elements or opinions (e.g., “ease of use”) should not be in your comparison chart.
Don’t: Say “we have no competitors.” There is no faster way to lose credibility with sophisticated investors than to say you have no competitors. Also, saying that competitors are “legacy solutions” or “too big to move as fast as us” doesn’t really resonant, so avoid saying you are the best because you are new and nimble. We already assume that.
Explain how you are going to sell your product and the results you have seen so far. If post-revenue, provide common sales metrics – such as customer acquisition costs (CAC), lifetime value (LTV), length of sales cycle, etc.
Do: Discuss what has worked or what hasn’t in the past and provide details on exactly how you plan on grabbing market share.
Don’t: Tell your investors “we’ll hire some salespeople.” Investors need more meat on the bone than that, as the inability to sell is typically the primary reason startups fail.
Provide a summary income statement (revenues, gross profit, overhead, EBITDA, and net income) preferably for five years – last year, this year, and the next three years. Also, mention current and projected cash burn with the raise along with “runway” – how many months of cash on hand assuming a successful raise divided by the monthly cash burn (or net loss) anticipated after the raise is completed. To back up the revenue projections, include a sales pipeline with closing probabilities if you are post-product.
Do: Know your numbers – both historical financials and your projections. Be able to explain key assumptions in detail, such as margins, sales growth, and overhead. It’s very hard to project what the business will look like in a few months, so projections for a few years out will be rarely accurate. The important consideration is demonstrating you have thought through the assumptions and have a firm grasp on what needs to happen with your startup to create a business that will succeed financially for all stakeholders.
Don’t: Slap together projections without much thought just so you can “check the box.”
Talk about who the universe of potential buyers are for your business and their buying rationale. Recent peer transactions valuations at exit or at acquisition are helpful to provide if known.
Do: If you have specific milestones you know are necessary to hit to be attractive for a buyer, state those. For example, “Medtronic typically buys device companies like ours once the product is in 15 states and has been used in 500 procedures.”
Don’t: Unless it’s the only option to return cash, do not mention “dividends” or “IPO” as the way investors cash out. That rarely happens. You’re most likely exit is selling the business to someone. Focus on that as your primary exit strategy. Dividends, as a form of liquidity, sound like a lifestyle business, and angels in general do not like lifestyle deals as they may never get their money back. IPOs are very hard to pull off, and unless you have an extraordinary team with IPO experience, we do not recommend IPO as your only stated exit path.
Timeline and milestones
Preferably in a graphical form, show how much time and money it will take to hit major milestones. For the first year or two, show quarterly segments and then yearly milestones and capital requirements in the out years.
Do: Show anticipated capital raises in the future.
Don’t: Overcomplicate the slide. Just stick to time, money, and major milestones.
State your asking valuation and structure, the amount of the raise, and how much has been verbally committed (“soft-circled”) so far. If you have a lead investor or well-established investors in this or past rounds, show those logos. Ideally, you will want to raise enough cash to provide the company with 12 – 24 months of runway with a target of 18 months.
Do: If you have institutional or professional investors interested or already invested, speak to why they invested and how much due diligence they did. Many investors will follow credible investors with good track records into deals. Also, ask your lead and/or prominent investors in this round to be available for reference calls from other prospective investors.
Don’t: Be vague on the terms unless a big Series A or later. “Subject to negotiations” is fine if it’s a large round ($5M or more) and your later stage (e.g., > $3M in revenues and 2+ years in business), but if early revenue and just getting started state what you are looking for. And be realistic about it. All deals are subject to negotiations, but many investors won’t spend time on a deal if they think there is a huge valuation/structure disconnect in the founder’s ask.
Contact Info / Call to action
Provide you contact information for investors looking to follow up with you.
Do: Provide email and phone number of one or more co-founders, preferably the CEO.
Don’t: Outsource this task to someone other than CEO unless the company is 100+ employees.
Adding an appendix is a great solution to your slide deck for the following scenarios:
- There are 20+ slides
- Anticipated questions
- Technical concepts
Most investors view the Appendix as information they don’t need to review, so shoving some slides in the appendix is a great way to provide more granularity, answer anticipated questions, or deal with technical concepts most of your angels will not understand.
- Don’t feel like you must discuss every bullet point / data point on every slide.
- Practice, practice, practice! If you are given a certain number of minutes to pitch, practice so you can stay under the allotted time. Many entrepreneurs go way over and are stopped before going through all the important slides noted above.
- Pay a graphic designer to make the pitch deck look nice once you’ve ironed out the content.
- During Q&A, be precise and concise. Answer the exact question asked efficiently. Don’t ramble on. A rule of thumb is 20 seconds or less per answer.