It’s tough enough to get a meeting with a VC. But once you’ve stolen their attention, how do you get their financial support?
VCs look for the valuable product, great team and exciting mission trifecta. But even if you have those three things, you’re not guaranteed to score an investment—you also need a compelling pitch deck that sums those elements up and makes it very clear to investors why this is one opportunity they shouldn’t pass up.
Wondering how to create a pitch deck worthy of your startup? Read on for tips from VCs, founders and Silicon Valley insiders.
Cap It at 10 Slides
According to Guy Kawasaki, a famous investor, advisor, and author, the optimal length for a pitch deck is 10 slides.
“A normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal,” he writes.
“If you must use more than ten slides to explain your business, you probably don’t have a business.”
Kawasaki also suggests ending your presentation at the 20-minute mark.
Although most investor meetings last an hour, time is often eaten up by technical difficulties, late arrivals, and questions.
Plus, as Sequoia Capital partner Aaref Hilaly points out, most VCs lose focus as the hour goes on. Which brings us to the next point…
Start With a Bang
If you don’t make an impact within the first five minutes, you probably won’t hook the VCs.
Hilaly recommends opening with three slides:
The Change: Is there new technology? Has the market changed? What shift has created the opportunity for a new company?
Your Product: In one sentence, explain what your business does. Your function should be clearly related to the change you discussed in slide one.
Company Overview: Give investors a better understanding of your company by telling them when you were founded, how many employees you have, and what stage you’re in.
Or Try the Standard Model
Alternatively, you can arrange your pitch deck according to the normal model—which may give you some credibility with skeptical investors.
When DocSend performed an analysis of 200 startup pitch decks, it found most of them were organized like this:
Company purpose: a one-liner that defines your business.
Problem: what need isn’t being met? How is the customer currently handling that?
Solution: your value proposition. Include use cases to make it more compelling.
Why now: how this industry has changed over time; what makes your entrance possible.
Market size: define the total number of consumers in the market, the TAM (total available market), SAM (segmented available market, or how much of the TAM you’ll go after), and SOM (share of available market, or how much of the SAM you’ll realistically obtain)
Product: the “what” and “why” of your product.
Team: the founders, board, and advisors;
Business Model: how you’ll make money, how you’ll price your product, how you’ll acquire and retain customers, how much each customer will be worth, and so on.
Competition: your competitors; why you have a unique competitive advantage.
Financials: projections of your revenue, market penetration, operating costs and revenue, etc.
Focus On These Two Slides
DocSend also analyzed on which slides investors spent the longest.
“Financials” received the most attention, which means you should probably be prepared to answer in-depth questions about what your revenue will look like 1, 3, and 5 years down the line; the total number of clients per year and your target market penetration; and total revenue, total expenses, and EBITDA (earnings before interest, taxes, depreciation, and amortization).
The truth is, investors know that it’s almost certainly too early to pull together accurate projections. So why spend time on them?
“While your audience may feel projections are premature in assessing the business, they will appreciate that you understand financial metrics and how to ‘operate’ a business,” says Bo Yaghmaie, head of New York Business and Finance Group for Cooley LLP.
After Financials, “Team” was a close second—so practice “selling” your team members’ relevant experience, success, and qualifications.
It’s logical to put the Financial slide somewhere near the end of the presentation; however, some founders choose to open with their Team slide.
Reid Hoffman, the founder of LinkedIn, calls this one of the fund-raising myths.
“The team behind your idea is critical, but don’t open with that. Instead, open with what the investors have to believe in order to want to want to be shareholders in your company—the investment thesis,” he explains. “Then, spend the rest of the pitch backing up those claims and increasing investors’ confidence in your investment thesis—which includes background on the
Demo Your Product
No matter what stage your product is in, you must provide some sort of visual example.
If you have a working product that’s available for purchase, include proof that you’re getting traction. If you don’t have a working product, show a prototype or demo. If you don’t have a demo, create mockups.
Having an example is crucial, as human beings are primarily visual creatures. Your investors will more confident about putting money into your idea if that idea has already come to life—even if that’s only in the form of mock-ups.
Yaghmaie recommends practicing your demo 25+ times until it flows perfectly. Not only should you know exactly which features you’re going to walk the investors through, you should also know what order you’re presenting them in and the words you’ll use to describe them.
It can be helpful to have your co-founder or employee be in charge of clicking slides while you talk. However, this method of presentation does require a little extra work, as you must be perfectly synced.
Make It Look Good
A poorly designed presentation probably won’t dissuade an excited investor from funding you.
But it’s not impossible! If your pitch deck looks like you threw it together in an hour on PowerPoint, that doesn’t speak very highly of your craftsmanship, obsessive perfectionism, and creativity—all qualities which are highly important in a startup founder or CEO.
There are a couple principles to keep in mind when designing your pitch deck:
Keep your font at 30 points. This font size makes it impossible to fill up your slides with text, which is boring and strains the eyes.
Let the slides complement your speech, rather than the other way around. You don’t want to read off your slides.
Use high-quality photos.
Allow your data to speak for itself with graphs and icons. Hiring an outside designer or company to put together your pitch deck can be a great investment for founders without the time, capability, or both to design it. Deckworks.co, New Haircut Digital Agency, Investor Pitches and SketchDeck have all gotten good reviews from the startup community. Alternatively, you can hire someone from Behance or Dribble.
Outsourcing this project will run you 4000, depending on how high-end you’d like the presentation to be.
By implementing these strategies, you’ll get your startup one step closer to “funded.”