Our thoughts on pitch decks
When I was first starting out in my career, I submitted a 45-page presentation to my Director who responded with this wonderful quote from Mark Twain:
“I’m sorry I wrote you such a long letter; I didn’t have time to write a short one.”
I have never forgotten this little nugget and I am regularly reminded of it when reviewing overly lengthy pitch decks, so I thought it might be useful to impart some of the observations I have gathered over the years.
As you may have heard from other investors, some of us can develop enough of a conviction about a pitch deck within just minutes of reading it. This is because there are certain notes that I need to see hit for me to want to schedule a face-to-face meeting with a pitching entrepreneur. Here are some of those notes:
Establishing the problem
This is the first slide that grabs the reader’s attention, and your first opportunity to sell.
- To demonstrate that the problem you are solving is significant enough in terms of importance, urgency, and size.
- To be specific, measurable, and accurate on the those points.
- Make the biggest issue your headline. You could even devote an entire slide to it if you have enough conviction behind it.
- Define what the impact of this pain is for your target market? What is the cost to them when dealing with this problem:
- Lost revenue?
- High customer churn rates?
- Employee dissatisfaction?
- Not ready for the future?
Here are a few personal ideas on how to portray this:
- Use images wherever possible to direct the eye and accompany them with impactful, short bullets or sentences.
- This should be no more than 1 to 3 slides, max.
- If the pain you are articulating is based on primary data you have collected, or it is from secondary sources, make sure you reference it! The former is pretty much always better as it shows that you deeply researched your market and used that data to build your company hypothesis.
We have the solution!
This is where you suddenly announce that you have the software ‘paracetamol’ to your target market’s headaches. This slide will provide your reader with the strongest prompt for them to continue reading your materials.
- Simple. To show that you have a killer solution to the problem(s) previously mentioned
However, this is also the slide where the crescendo you have been building has the greatest chance of falling on a flat note. Here are some thoughts on how to maintain the beat:
- Be really precise about the articulation of your solution: “X is the X software that solves X” Nothing more. Nothing less.
- Highlight the top three things your product offers to solve the problem
- Use a single product shot, not multiple, to maintain reader attention and keep the copy very snappy.
- Use easy to comprehend language. I often used the Mum and Dad Test when practicing my pitches as they are not the most au-fait with startups and were the best crash test dummies (love you, Mum and Dad!).
- Keep it to one slide – if you can’t convey your company’s mission in under 10 seconds, you have a problem.
So, why does this matter?
On this slide, you need to show why your solution is the best one in the marketplace. This is not necessarily a competitor review (that comes later) but rather a statement about how much better/different your solution is than what is currently practiced or available from others.
…and here’s how it all works
This slide is all about answering one of the most important (and frequently asked) questions in my repertoire: “Why Now?”. I have spoken a length about this question in previous blogs, but here are some quick ideas:
- What has changed or happened to enable your company to exist, today?
- What has changed in your target market’s business models to facilitate your product?
- Has something become cheap that was once expensive?
- Why is this hard to accomplish? Why has no one else done (or failed) to do this?
- Again, keep it snappy, visual and brief
- Maybe focus in on three points of differentiation that have the most impact
Sadly this is not about my favorite biscuit but instead the staple item in any pitch deck – defining the Total Addressable Market.
As this subject has been done to death by countless other VC blogs, the only pieces of advice I would offer are:
- If it is too small, it will not be interesting to early-stage VCs. If it is too large, it will not be taken seriously.
- Whilst this is a slide that we often gloss over (we know it is always ‘big’), please don’t underestimate its significance. it is an important credibility check for investors and a useful test on how you view the size of the opportunity.
- Make it focused and realistic. If you are developing a new search engine tool, do not estimate your TAM on the market cap of Google. Base it on the number of users/customers/people using this particular tool in your target market. If the TAM is still embarrassingly massive, why not just state of the size of your home market and then add the global market as a footnote.
Whether you are pre-seed or further along in your business lifecycle, the traction slide remains one of the most critical slides of all. This is your chance to tell the story of your hunt for product-market-fit.
If you are pre-seed, mention how many pilots you have run or how developed your pipeline has become.
If you are at the seed stage, talk about current revenue growth since launch and percentage change between these key points in time.
- Demonstrate that your market is willing to use and pay for your product.
- Show that interest is growing at a substantial, beyond steady, rate.
- The data is 100% accurate
- Don’t try and massage the numbers by including non-recurring/scaleable consulting income. This is valued at lower multiples than subscription revenue.
- Don’t include customers in your revenue line who have only just signed an LOI and not paid you any fees. This is not banked revenue
- Do include projections and have a thorough spreadsheet that backs them up
Again, this is a well-trodden subject that I will not labor on, however, it is expected piece of content that can be useful for an investor to assess a market, which she or he may not know much about.
- Help your investors understand your competitive landscape. If they are interested in digging in more, they will need to do this anyway.
- We expect you to have more check in the boxes than your competitors – tell us why
I would recommend focusing on competitors that are easily discoverable by investors and ensure that your knowledge of their current product suite is up-to-date.
Also, be careful to not criticize them too much — you never know if the investor you are pitching has invested in them!
I can’t tell you how many pitch decks I have reviewed where I am excited about what I have read thus far to only be disappointed with a missing/poorly written business model slide.
- Demonstrate how you make money
- Tell us about your pricing model
- Discuss your product up-sell suite
If you are pre-seed and don’t have any customers, clearly present a simple and sensible pricing strategy. Also, own the fact that you are nearly always under-selling your products and can always increase prices!
- Use this slide as another place to sell your company – what is the ACV (average contract value) for your product and how this has trended (hopefully it has gone upwards) since you launched.
- If you are proud of your CAC (Customer Acquisition Cost) then tell us why – what nifty and thrifty ways have you developed to sell to your target market? Are you a growth hacker? If so, tell us how and what you did?
- Ensure that your pricing model is simple, easy to understand, and appropriate. Don’t overcomplicate it and make sure it follows through to your 18-month financial model
Whilst I have discussed this in previous blogs, for purposes of brevity, I will revisit this important part of your deck.
- This is all about telling us why you and your team are the most logical and credible people to build this company
- Briefly mention your backgrounds, but don’t give us War and Peace, just the highlights.
- Use clear photos that are professional, not your Instagram profile picture.
- I sometimes question the need for long lists of advisors. Only list them if they actively working with your company and are highly relevant.
What are you asking for?
The most commonly missed opportunity in decks that I review is that the entrepreneur(s) do not make the ask of the investor. How much money are you raising?
- One line – tell us how much money you need and why.
- Demonstrate what this amount of capital will deliver for your business? More revenue? More product development?
- Add a few bullets about the use of capital:
- How many people will you hire and what will they be doing?
- How long will the money last you?
- What is your deadline for hitting the goals (hint: 18-24 months)?
The dreaded appendices
Just to be crystal clear, the appendix is not a place for sub-par slides to retire. This is a place for additional details that may be pertinent to your argument to stand proud and excite a curious investor.
This space is very individual to each pitch so I don’t really have any objectives, just ideas:
- Maybe include some more detail on your pipeline and which targets are in it
- Present how you calculated your CAC or your pricing model
- Provide a little more detail on your product sophistication or the back-end.
As always, these are just my views and, as you know, pitching is an art, not a science – there is no right or wrong answer.
Own your slides, practice them off-by-heart, and enjoy delivering the content. Conveying a genuine passion for the problem you are solving is more important than anything else.
Best of luck!