Pitch (Deck) Guide: Step-by-Step to a Successful Investor Pitch
Intro
Imagine this: you have an innovative idea that could disrupt an industry. You’re passionate about your vision and ready to take the next step, but there’s one crucial hurdle to overcome – pitching your idea to potential investors, partners, or customers. A well-made pitch can open doors, whether you’re seeking funding, forming strategic partnerships, or acquiring new clients, mastering the art of pitching and creating a good pitch deck is essential.
Ready to elevate your pitch (deck) skills? We gathered our knowledge at StellarPH, which consists of several experienced and successful founders, to create a short but practical guide for you. Read the blog until the end for some common mistakes which you probably did not think of yet! Let’s dive in and explore the art of delivering a pitch!
Content of this blog:
What is a Pitch (Deck)?
Setting the Tone of Your Pitch
The Length of Your Pitch
Building Your Pitch: Key Components
Don’t Do This
Extra Tips
Extra Resources
Example of a B2B Pitch Deck
Example of a B2C Pitch Deck
What is a Pitch (Deck)?
A pitch is a short presentation where an entrepreneur or business professional explains their business idea, product, or service. Its goal is to captivate the audience and persuade them to support the venture. On the other hand, a pitch deck is a visual tool used to support the pitch. It typically consists of a series of slides that provide detailed information about the business, including the general problem, solution, market potential, and your startup infrastructure. Sometimes, a pitch deck is also sent to investors on its own, giving them a complete overview of your business even without a live presentation.
Setting the Tone of Your Pitch
The design of your pitch deck is important, as it not only shows your startup, but also you as a business owner. It displays your creativity and thoughts, giving insight into how you act as a manager in day-to-day operations. If your slides show too many numbers and statistics, you may come off as dry or boring, so aim for originality. A bit of humor can help you create a good environment! Try to find the right balance between showing data and being engaging.
It's important to remember that each audience is different, so you should learn as much as you can about the people you will be pitching to. This way, you can adapt your presentation to match their interests and preferences, making your pitch more effective. Also, different stages of your startup demand different types of pitches. In the beginning, market research and validation is more important, while later on, numbers such as revenue growth or churn rates are more applicable.
The Length of Your Pitch
On average, investors spend only 3 minutes and 44 seconds looking at a pitch deck (DocSend). Keep this in mind when creating yours, as the investor should be able to clearly understand your idea and its potential within this short timeframe. According to Harvard Business Review, successful startup founders spend an average of 18 hours to perfect their pitch! Of course, this is a very long time, but a good lesson here is that quality takes time: you need to mix precision, data, and passion.
Building Your Pitch: Key Components
Problem
It is key to a good pitch to have a convincing slide that conveys the problem that your business solves. You should precisely point out the challenge or obstacle that your business idea solves. Demonstrate the size of the problem in terms of money and/or effort that users lose annually. By concentrating on one problem alone, you seem more focused and attentive. It shows potential investors that you have a good understanding of the issue and therefore can build a well-fit and thought-out solution. Explaining the customers’ pain points may also help you connect to the reader or listener on a more personal level.
Solution
After stating your problem clearly, your solution slide should provide a clear connection to this issue. Provide a concise but clear explanation of what your startup is offering and how it directly solves the customers’ challenges. Additionally, you should demonstrate why your solution makes sense in this specific market. If you are not necessarily a new mover in the market, and are simply trying to outperform your competitors, try to explain why your solution is at least 10 times better than the current market’s offerings.
Do you want to know which problems inspired some of the most successful startups? Have a look at this article from Opinion X: https://www.opinionx.co/99-problems
How-it-works
This part is an extension of the solution. After explaining what your business does, here you lay out in more detail how it operates and how your product or service is used. Photos may be very useful here to give potential investors a visual image. Describe the technologies that are needed to create your product or to deliver your service. Also point out what steps customers should take to use your offerings. What also needs to be discussed here is your revenue structure - who pays which amounts and when (e.g. a monthly subscription).
Market Potential
This section is possibly the most interesting for potential investors, as they need to know what the current size and the expected growth of your market are. Investors are trying to calculate their possible exit values, thus knowing these numbers is crucial. In addition to these statistics, try to explain your potential: are you disrupting an existing market, are you a first mover, do you serve a specific niche, or do you see other opportunities in this market? Also discuss your defensibility and whether this will hold up in the future.
Validation and Traction
Showing that your startup has traction, confirms to investors that there is indeed interest in your business. Numbers such as monthly sales growth or statements from customers show that your startup idea truly has potential. Additionally, you could tap into patents, investors, awards, or partnerships that you have gained throughout your journey. If possible, also discuss your marketing strategy and explain why it is successful.
Team and Funding
In the last part of your presentation, it is good to provide an overview of your team members and their expertise. Have they already founded successful startups or do they have a niche expertise in their field?
Want to read more on how to create your team slide? Check this out: https://www.basetemplates.com/pitch-deck-slides/team-slide
This last part of your presentation also allows you to share some remaining details - maybe you have a pending patent or you are building a warehouse. Also mention where you are currently standing regarding funding, thus explain whether you are still bootstrapping or whether you have already passed a few rounds.
Don’t Do This
Competition
Avoid saying that your firm has no competition - it is unrealistic. Investors might think you are either naive or arrogant. Show that you have a deep understanding of your competitors’ products and explain your startup’s defensibility.
Money Questions
When asked by your potential investors about what your plans are with their investment, make sure to answer clearly and prepared. If you don’t know this answer exactly, you might create distrust. Also try to stay realistic in terms of company valuation - saying your company is worth PHP 2M while you don’t have any traction yet, might not be a good idea.
Extra Tips
In the early stages, especially if you lack significant traction, highlighting your team is crucial. Investors need to see that your team has the skills and experience to execute your vision.
We will say it once more: show that you are well-prepared. Show this by doing thorough market research and talking to potential customers. This demonstrates that you understand the market and have validated your business idea.
If possible, give live demonstrations of your product rather than just talking about it. Seeing your product in action can be a lot more convincing and engaging for your audience.
Conclusion
By using these tips and resources, you can create a pitch that grabs attention and gets people excited about your idea. Remember, a good pitch tells a story and gives important details without being boring. Show that you are well-prepared and understand your audience. Keep practicing and asking for feedback to make your pitch even better. With hard work and the right approach, you can turn your startup dream into reality and get the support you need. Good luck with your pitch!
Extra Resources
Want to read more on creating the perfect pitch? Read this Harvard Business Review article!
Want to have a look at the original pitch decks of the world’s largest companies? Have a look at this HubSpot page!
Example of a B2B pitch deck
Description
Present a brief description of your company and the products/services you offer
What investors look for
2-3 line description of your solution is and how your clients benefit from it
This may include your company's purpose, mission & vision
Example text
"[Company Name] provides a solution X to the Big Data industry through our cloud-based analytics service"
"[Company Name] is a spin-off from the University of Cambridge and is comprised of specialists in Artificial Intelligence (AI) and Natural Language Processing (NLP)"
Problem
Present the problem/s you’re trying to solve and the impact on your target customer/s
What investors look for
2-3 lines outlining the exact customer problem/s and/or challenge/s that you are solving
More information on how costly the problem/s are to your clients (whether it’s time, capital, resources, etc...)
Example text
"Companies who currently house their data analytics engines via 'on-premise' servers often find it exceedingly difficult to scale their collection and processing operations"
Solution
Present how your product/service directly addresses the client's problem/s presented
What investors look for
Screenshots demonstrating how your products/services address the problems presented
Clear explanation of features and how they benefit your clients (qualitative and/or quantitative)
Clear ROI (return on investment) for clients
Example text
"[Company Name] enables more efficient data management and much shorter delivery time to help companies grow smarter organically"
"Our solution can process data 15x faster, saving clients up to 30% on costs and eliminating all paperwork"
How-it-works
Present your technology stack and/or operational process flow and how the solution will be used by your end-customers
What investors look for
Diagram of how your product/service works
Tech stack used
Business model/s and revenue stream/s
Example text
"The solution is available through a combination of hardware and software. The software utilizes AI, NLP, and Machine Learning. The hardware can be connected to a client’s existing infrastructure"
"The solution is available for SMEs ($/month or $/year) and large enterprises ($/month or $/year)"
5. Market
Present your company’s target sector/s, market potential, customer/s or use cases, and competitive landscape
What investors look for
The total addressable market, serviceable addressable market, and serviceable obtainable market for your specific solution/service
An alternative would be to show how costly the problem is that you are trying to solve within the market and/or how many of your target customers are affected annually/within a specific year
Specific target customer segments (individuals, SMEs, large corporates, etc...), sectors, and/or geographies
Example text
"Within the Big Data industry, our solution is able to address the $20bn database analytics segment contributed to by problem X"
"[Company Name] pursues opportunities in the global AI in the healthcare market, which is expected to reach $45.2Bn by 2026"
"[Company Name] caters to financial services and transactional services companies that use chatbots to engage, converse and transact with their customers."
6. Traction
Present your company’s milestones to date
What investors look for
Average revenue per client
Revenue from top 3-5 clients
Total ARR and/or MRR (and/or per client)
Customer pipeline, including potential contract values
Partners and investors
Patents, certifications, awards, and media coverage
Example text
"Our contract with Oracle contributes £80 of MRR"
"Currently, we have Google and Amazon who are looking to be onboarded as clients in Q4 2020"
"[Company]'s ECG Analysis Solution is supported by a number of clinical publications and was the world’s first medical device powered by deep learning technology to receive regulatory clearance"
"[Company] has secured paid contracts and partnerships with X and Y"
"[Company Name] was recently featured in the Financial Times and was listed as one of the 'Top 100 Hottest Startups in the UK' by TechCrunch"
7. Team
Present your core, management team and notable advisors (as applicable)
Example of a B2C pitch deck
1. Description
Present a brief description of your company and the products/services you offer
What investors look for
2-3 lines on what your solution is and how your clients benefit from it
This may include your company's purpose, mission & vision
Example text
"[Company Name] automatically gives you cash back when you shop at your favourite online brands"
"[Company Name] is a social video platform for gamers where they can gather to broadcast, watch, and talk about their favourite video games"
"[Company Name] is a deal-of-the-day website that offers discounted gift certificates, usable at local or national chains"
"Through an easy-to-use mobile app, [Company Name] enables consumers to shop for groceries and have them delivered to their doorstep"
2. Problem
Present the problem/s you’re trying to solve and the impact on your target customer/s
What investors look for
2-3 lines outlining the exact customer problem/s or challenge/s that you are solving
What is the benefit the customer is missing out on by not using your product/service?
What would push the customer to use this product/service?
More information on how costly the problem/s are to your clients (whether it's time, capital, resources, etc...)
Example text
"Without our product, consumers have to manually search for available discount codes via search engines"
"Currently, gamers cannot compete against each other and win money unless they participate in competitive e-sports tournaments"
Solution
Present how your product/service directly addresses the client's problem/s presented
What investors look for
Screenshots demonstrating how your products/services address the problems presented
Clear explanation of features and how they benefit your clients (qualitative and/or quantitative)
Clear ROI (return on investment) for clients
Example Text
"We enable customers to automatically find and apply discount codes when purchasing a product online. With our solution, customers can save up to 40% on costs whilst eliminating the need for paper discount coupons."
"We have created a platform where casual gamers can compete and win money by winning games. Players can enjoy competing one-on-one or create teams with other casual gamers."
How-it-works
Present your technology stack and/or operational process flow and how the solution will be used by your end-customers.
What investors look for
How easy is it for individuals to use your product/service?
Tech stack used
Business model/s and revenue stream/s
Example text
"After the user downloads our app, they then insert their gamer tag and decide in which games they would like to compete"
"Using AI, our platform verifies the gamer’s skill to ensure they only compete with other users that are on their same skill level. We apply our proprietary matchmaking algorithms to find a suitable opponent"
"When they want to start a match, we check if they have enough credits available in their account to begin. Once the match has ended, we check who won, and award the prize money accordingly"
5. Market
Present your company’s target sector/s, market potential, customer/s or use cases, and competitive landscape.
What investors look for
The total addressable market, serviceable addressable market, and serviceable obtainable market for your specific solution/service. Note that the most relevant information is the serviceable obtainable market, which is the percentage of the target population that can be realistically reached
How fast is the target market growing?
An alternative would be to show how costly the problem is that you are trying to solve within the market and/or how many of your target customers are affected annually/within a specific year
Specific target customer demographics and/or geographies
Direct or indirect competitors
Example text
"TAM: 27.7m open banking retailer customers expected in the UK by 2022"
"SAM: 15.4m sophisticated spenders"
"Targeted market share: 1.4m clients (9% market share by 2024)"
"Competitors in this space include Twitch and YouTube"
6. Traction
Present your company’s milestones to date
What investors look for
Daily or Monthly Active Users
CAC (Customer Acquisition Cost)
Customer LTV (Lifetime Value)
User Churn
Average revenue per user (ARPU)
Partners and investors
Patents, certifications, awards, and media coverage
Example text
"We currently have 120k downloads and 40k monthly active users"
"Our customer acquisition cost is $10 and the customer lifetime value is $30"
"We have established an official partnership with Nintendo for the company’s Switch platform"
7. Team
Present your core, management team and notable advisors (as applicable)
Example text
"John Smith (Founder & CEO) – John was a founding member of Twitch. He also held a variety of technology management roles at Sony, Electronic Arts, and Big Fish Games"
"Jane Doe (Advisor) – Jane is Chairman of the Board at Tencent and has been active in the online gaming space for the past two decades"
