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A pitch deck is a must-have tool when you’re fundraising for your start-up.
It’s essentially a brief presentation in which you provide an overview of your company to investors. If done well, it will capture their interest, get a conversation going, and set you on the path to gaining funding for your business.
Putting together a truly compelling pitch deck isn’t an easy task and will require time and effort. Here are some tips to help and common mistakes to avoid.
1. Keep it brief
The purpose of a pitch deck isn’t to raise money – it’s to pique an investor’s interest to secure the next meeting. In order to grab and retain their attention, you should distil all the necessary information into a short, easily digestible presentation. 10 – 15 slides is a good rule of thumb. You’ll also need an executive summary or ‘one-pager’ to send to investors.
Investors are usually under tight time constraints and will read hundreds of pitch decks every year, so they’ll appreciate it if you can convey your message as succinctly as possible. Remember that by communicating it well to the investor, you’ll also demonstrate to them that you can communicate it well to your customers, so take the time to make it engaging and easy to understand.
2. Make use of visuals
Infographics, images, graphs, and charts can remove the need for lengthy paragraphs and can convey more information much faster, so utilise these where appropriate.
3. Consider the context
Are you sending your pitch deck in a cold email or will you be talking through the slides during a meeting? This will determine the level of detail you need to include. If an investor is reading it on their own, then it’ll need to be a bit more information-heavy than if you’re delivering the presentation in person, where you can use more visuals and elaborate verbally.
4. Don’t use Word
Microsoft Word documents probably won’t get read. Use PowerPoint or other presentation software to create your pitch deck.
5. Ensure it’s realistic
Investors will generally retain a copy of your pitch deck and refer back to them in years to come, so make sure your financials are realistic and demonstrably attainable.
6. Make it printer-friendly
Avoid using solid colour backgrounds and optimise the text contrast for readability when printed in black and white.
7. Include your contact details
Make it easy for investors to contact you if they’re interested.
8. Prioritise substance over style
Unless you’re pitching for investment into a graphic company, investors generally aren’t too interested in your design capabilities. Fancy fonts, animations, and an overly busy template can distract from the information you’re presenting. Opt for something simple and clear.
What should your pitch deck include?
The order of your slides may vary depending on how you want to tell your story, but these are the general areas to cover:
What problem is your company solving, who experiences it, and how big is it? A good idea is to write the problem down and rate it on a scale of 1-10. If it’s less than a 9 out of 10, it may fall into the ‘nice to have’ category and won’t attract attention. It should also affect a specific target market. If you try to appeal to everyone, you’ll probably appeal to no-one, so it’s better to have a clearly defined segment of customers in mind and tackle the particular pain that they’re facing, e.g. Facebook started in Harvard and then went global.
Solution and value proposition
How do you solve this one problem and why are you best placed to solve it over existing solutions on the market? Again, try to be as specific as possible, and focus on one concrete solution rather than offering several different weaker ones. Remember that you’re competing for an investor’s attention, so no matter how complex the solution may be, explain it as simply, concisely, and powerfully as you can.
In this slide you should clearly articulate what your product is. Talk less about features and more about benefits – how does it improve the lives of your customers? When you know your product inside out and deal with it every day, it’s easy to forget that other people don’t have the same knowledge. Make it accessible and easy to understand for the layman. Photos, screenshots, and videos can be effective here. If you haven’t created your product yet, you can include a mock-up to show what it’ll look like.
How big is the market? Is it growing or contracting, and how fast? Be realistic about the size of the market opportunity and give your TAM, SAM, and SOM (Total Addressable Market, Serviceable Available Market, and Serviceable Obtainable Market). Also, be realistic about how much market share you can capture. Remember, if the market is big, it means there’s lots of competitors so 1% might be harder than you think.
Explain how you make or plan to make money. What makes your business model tick and what levers can you pull to enhance profitability? Here you can also talk about how you’ll acquire and retain customers. What is the lifetime value of a customer (LTV) and the customer acquisition cost (CAC)? The commonly accepted benchmark for the LTV:CAC ratio is 3:1, i.e. the value of a customer should be three times greater than the cost of acquiring them.
Every company has some form of competition – don’t make the mistake of saying that you have none. Investors will want to see that you have a thorough understanding of the competitive landscape and your place in it. Identify the direct and indirect competitors in your market and show that you’ve thought about how you’ll deal with competitive threats.
Competitive advantage / unique selling point (USP)
What sets you apart from the competition? Why will customers choose you? According to Peter Thiel, entrepreneur and VC, a start-up needs to have a proprietary technology at least 10 times better than its closest substitute in order to get noticed. If you’re competing against major players, you’re going to have to rely on being much better because you don’t yet have the brand recognition or capital to build it. With this slide, try to show that your product is not only better, but is significantly better than what already exists.
Marketingplan / go-to-market strategy
How are you going to sell and promote your product? How will you engage target customers and get them to buy your product? If your answer is simply ‘social media’, you probably won’t get funded. Talk about the marketing and sales strategies you’ll use now and in the future to maintain the competitive advantage / barrier to entry you talked about in the previous slide.
This is one of most important slides in your pitch deck. Do you have the skills and experience to deliver on the business plan, or is it going to come at a large additional cost to the business via consultants?
Board and advisors
This is often one of the most underrated ways to fill gaps in the management team and improve the calibre of business. Name your board members and advisors and outline the experience they bring.
Traction and milestones
The best person to evaluate your product is your customers. If you can provide evidence that there is demand for your product, this will give the investor confidence. Are your customers parting with their hard-earned cash for your product? Try to include a graph here showing how your product is being adopted by the market, rather than just statements.
This slide should cover how much money you’re looking to raise, at what price, and when. How long of a cash runway will the investment give you? Have you raised any funding so far? Are existing investors going to put more money in? If not, why not?
Investors are financial people and gravitate towards financial metrics and models. Demonstrate to them that you have a firm grasp of your numbers. Break down your current revenue, costs, and cash flow, and give realistic financial projections for the next three-five years. Investors will be particularly interested in knowing how cash hungry your business is and the scalability of your business model.
Every business is different and so every pitch deck will be unique. Use each slide as an opportunity to tell your individual story and make an impression. Writing a great pitch deck isn’t something you’re going to master overnight. Dedicate time to perfecting it and get as much help and feedback as you can, as this will increase your chance of success.