What do investors really want to see in your pitch deck in order for them to fund your startup?
There can be a big difference between what founders want to show off in their pitch deck and what investors really want to see. Remember, it's not about you. You aren't presenting to yourself for money. It needs to be tailored to those you are hoping to raise capital from.
This can evolve over time as you move through funding stages and the capital environment rotates. At your pre-seed round, it is all about the team. As you graduate and grow, the hyper successful founders I've interviewed on the Dealmakers Podcast say that it is increasingly about the numbers, revenues, and profitability.
Yet, no matter what round you are on from Seed A to D, here's what your investors will want to see in your pitch deck.
A Strong Cover Slide
I am a big advocate for ensuring your contact information is right on the cover slide. It also helps to make it interesting. Just like all first impressions, if your cover isn't good, then you are already setting the perception of everything coming after it.
The Concept
This is where you need to apply The Grandmother Test. You need to be able to explain your startup concept in just a few words. It should be simple enough that any grandmother gets it. If you can't do that, it is going to be hard to get sales and create a viable business.
It doesn't matter how technically genius your product is, most investors are going to glaze over at this point. Keep it incredibly simple.
The Problem
It is vital to show that you are focused on solving one problem. There may be many benefits, and problems that your product can simultaneously solve. Just choose one to focus on.
Make sure it is an urgent one that they can relate to. This is where your story telling will really make a difference.
Solution
How is your solution solving the problem? Again, make sure it is a crisp, clear answer. While on the business plan, you will be using more text here than you want to use visuals to make it pop.
Market Size
This is easily the single most important data point in your pitch deck. How big is the market now? How big is it predicted to grow, and how fast? What is your realistical total addressable and serviceable share of the market?
Remember, while it sounds cool in your head, you don't have to be the first mover or the number one company for market share in order to create a highly valuable and profitable business in this sector. At least if you are in a big enough market. It's probably more believable if that isn't your pitch.
Competition
Competition can be a benefit if you position it right. Competition can help drive more growth and demand in this space. It can give you something to compare to when establishing your ask and valuation. You may even subconsciously plant in their minds who some potential acquirers will be in the future.
Your Competitive Advantage
How are you differentiated from the competition? What makes you at least 10x better? What is your moat that will continue to protect your business and the money they invest? This might include patents and trademarks, exclusive partnership and distribution deals and marketing channels.
The Product
What does it do? What does it look like? What are the benefits for the users? Additionally, what does it cost to produce? How will you price it? What are your profit margins? All of these things are likely to evolve over time. Some may change a lot. More importantly, this is demonstrating that you know your stuff.
Who Are The Customers?
This can be more challenging and important when the individual investors and VC partners you are pitching aren't going to be users and don't have experience in this space or an existing passion for it.
You need to know who your customers are exactly. You won't have room for it here, but you should have clear profiles and personas already built out.
Don't just assume either. It can be deadly. Be sure you've actually been out there meeting with and talking to them. If you haven't, this is probably a smart time to take a break and go call 20 or 100 potential customers and get their insights and feedback.
Traction
What progress have you achieved? Ideas are cheap and plentiful. Someone with virtually the same idea will put a pitch deck on their desk tomorrow. Maybe 10 of them. The difference between a good idea, and a good startup worth investing in is the execution. So, what progress have you made? How have you consistently forced traction? It's worth having a story in your back pocket of how you've overcome challenges in the past to keep pushing things forward.
Business Model
How does your company make money and have you been able to validate such a business model? Keep in mind that what investors are interested in changes a lot with time. Once it may have been hardware, then software, and SaaS.
The Financials
You may not need to include financial slides when you are raising at early stages. There may not be much to show. However, providing at least a slide or two demonstrating you've thought this through and done your homework can go a long way. What are your expenses, cash flow needs, and potential revenues and profits for the next 1-5 years? Again, this is just as much about building trust and credibility as the numbers you put down.
Other Investors
What other investors are participating in your business? Who has funded you and joined your board in the past when you were conducting your startup fundraising efforts? Who is leading this round? This can give prospects a great deal of confidence. They want to know they are investing alongside other smart and successful investors, and those they'll get along with.
Other key things investors will want to see are:
Who your team is
Who your advisors are
How you will use the funds
A strong back cover that shows you can close
BIO
Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by 'Shark Tank' star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today's way of raising money for entrepreneurs.
Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of founders online.
Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake).
Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business.
Alejandro has been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.
