When seeking funding for your business, a well-crafted pitch deck is essential. A pitch deck is a presentation that summarises the key aspects of your business and explains why it is a good investment opportunity.
However, with so many different elements to consider, it can be difficult to know where to start. In this article, we will explore the most essential components of a winning pitch deck and provide tips for creating a compelling presentation.
Whether you’re a seasoned entrepreneur or new to the world of pitch decks, this article will provide valuable insights and strategies for crafting a pitch deck that resonates with investors.
1. Starting with the Business Case
“A responsible investor will not commit to financing a business without having first considered, and been thoroughly satisfied by, the business plan.”
The business plan tells the investor how the business will operate, expand, or otherwise achieve the objectives set by its founders. The size of the potential return on investment, and the likelihood of ever realising that return, will be central to the investor’s decision-making.
But, the investor is unlikely to have days to pore over use cases and accounting minutiae, or study your product or service in detail. For this reason the business case must be distilled into a presentable format for consideration.
This is the pitch deck. Decks can come in many forms, but most tend to be a series of pages, or slides, which take the reader through your business plan — and your request for investment — in a logical and compelling manner.
Many would be entrepreneurs make the mistake of assuming that what matters most is the personal presentation of their business case to a potential investor, and that the pitch deck is nothing more than an aide-memoire – something for the audience to leaf through during that presentation.
This is a fatal misunderstanding of how investors operate, and is almost guaranteed to get you screened. If you consider that the average venture capital investor will review 19 pitch decks per week, you realise pretty quickly just how important it is for your pitch deck to stand alone. A potential investor must find the material sufficiently compelling that they will sacrifice an hour or more of their time to meet the author/s.
There are a number of ways to set out the plan, but at a minimum you should be including the following sections.
- an executive summary
- a business description
- problem and solution
- competitor analysis
- investment expenditure and timelines
- financial information and forecasts
2. The Executive Summary
An executive summary is a crucial element of a pitch deck because it gives investors a high-level overview of your business and its key value proposition. It should be concise, compelling, and focused on the key points that make your company stand out. Here are a few tips for writing an executive summary that really stands out:
- Start with a compelling opening – The first few sentences of your executive summary are crucial for capturing the attention of investors. Start with a strong opening that clearly communicates the problem your business is solving and how it creates value for customers.
- Explain the key value proposition of your business – In a few short sentences, describe what makes your business unique and why it is a compelling investment opportunity. This should be the main focus of your executive summary.
- Include key metrics and milestones – Investors will want to see evidence of the progress your company has made and its potential for growth. Include key metrics such as revenue, customer acquisition cost, and retention rate, as well as any notable milestones you have achieved.
- Keep it concise – An executive summary should be brief and to the point – aim for no more than one or two pages.
- Edit and revise – As with any writing, it’s important to edit and revise your executive summary to ensure that it is clear, concise, and free of errors. Have someone else review it for feedback and ask for input from your team.
By following these tips, you can craft an executive summary for your pitch deck that really stands out and captures the attention of investors. Remember to focus on the key value proposition of your business, include relevant metrics and milestones, and keep it concise. With a little effort and attention to detail, you can create an executive summary that effectively communicates the potential of your business.
3. The Business Description
It is what it says on the tin. Tell the investor who you are.
In order to provide a good structure, try to answer the following, at a minimum:
- When did the business start
- What does the business do – try to refer to all main revenue streams.
- Where is the business based – Normally this is an easy question, but for larger, multinational businesses you might want to clarify where the headquarters are, and where any subsidiaries, branches, key employees or agents are in operation.
- How large is the business – There is no universally agreed method of sizing a business, but at very least you will want to include total headcount (or full time equivalent, if applicable), typical revenue per annum or per month, and gross balance sheet (meaning the total of all assets held by the business).
- Who are the key members of staff, and what are their backgrounds – It is not necessary to list out every employee and contractor; only key function heads are required (for example, head of operations, finance director, head of marketing, chief risk officer). Fewer is definitely better. Do not be tempted to make up titles for people in order that the organisation appears more professional. Nobody expects a two person gardening business to have a chief technology officer, and the reality is that in early stage enterprises the same individuals will wear many different hats. Investors know and expect this.
Finally, in terms of placement within the pitch deck, we very often see team sheets included separately from the main business description. This is absolutely fine, provided that it is covered somewhere.
“Nobody expects a two person gardening business to have a chief technology officer.”
4. The Problem and Solution
The problem and solution section of a pitch deck is crucial for convincing investors that your business is solving a real problem and that your solution is the best way to address it. Here are a few tips for writing a problem and solution section that really stands out:
- Clearly articulate the problem – The first step is to clearly and concisely explain the problem your business is solving. This should include a detailed explanation of the pain points that your target customers are experiencing, and how these problems are impacting their lives or businesses.
- Explain how your solution addresses the problem – Next, you should explain how your solution addresses the problem you have identified. This should include a detailed explanation of your product or service, as well as the benefits it provides to customers. Be sure to focus on how your solution is unique and how it stands out from competitors.
- Use examples and case studies – To help illustrate the impact of your solution, consider including examples or case studies that demonstrate how your product or service has helped real customers solve their problems. This can help to make your solution more tangible and relatable to investors.
- Use visuals and graphics – Visuals and graphics can be a powerful way to communicate your solution and its benefits. Consider using charts, graphs, and other visual aids to help illustrate the impact of your solution and how it compares to competitors.
- Edit and revise – As with any writing, it’s important to edit and revise your problem and solution section to ensure that it is clear, concise, and free of errors. Have someone else review it for feedback and ask for input from your team.
By following these tips, you can craft a problem and solution section for your pitch deck that really stands out and convinces investors of the value of your business.
5. The Competitor Analysis
The competitor analysis section of a pitch deck is important because it helps investors understand how your business compares to other companies in your industry. This is an opportunity to showcase the unique value proposition of your business and convince investors that it is a compelling investment opportunity. Here are a few tips for writing a competitor analysis section that really stands out:
- Identify your main competitors – Start by identifying your main competitors, including both direct and indirect competitors. This should include companies that offer similar products or services and target similar customer segments.
- Describe the competitive landscape – Next, describe the competitive landscape in your industry, including trends, challenges, and opportunities. This should include a detailed analysis of your competitors, including their strengths and weaknesses.
- Highlight your unique value proposition – Use this section to showcase what makes your business unique and how it stands out from the competition. This should include a detailed explanation of your product or service, as well as the benefits it provides to customers.
- Use supporting data and research – If you have data or research to support the competitive advantage of your business, include it in this section. This could include market research, customer feedback, or other data that demonstrates the value of your solution.
- Keep it concise – The competitor analysis section should be brief and to the point – aim for no more than a few pages.
By following these tips, you can craft a competitor analysis section for your pitch deck that really stands out and helps investors understand the unique value proposition of your business.
6. The Financials
The financial section of a pitch deck is important because it gives investors a sense of the progress your business has made and its potential for growth. This is an opportunity to showcase the financial health of your business and convince investors that it is a compelling investment opportunity. Here are a few tips for writing a financial section that really stands out:
- Include key metrics and milestones – Start by including key metrics and milestones that demonstrate the progress your business has made. This could include revenue, customer acquisition cost, retention rate, and any notable milestones you have achieved.
- Outline your financial projections – Next, include your financial projections for the next several years. This should include projected revenue, expenses, and profits, as well as any assumptions or assumptions you have made.
- Describe your funding request – In this section, outline your funding request, including the amount of funding you are seeking and how you plan to use the funds.
- Include supporting data and research – If you have data or research to support the financial health and potential of your business, include it in this section. This could include market research, customer feedback, or other data that demonstrates the viability of your business.
- Keep it concise – The financial section should be brief and to the point – aim for no more than a few pages.
By following these tips, you can craft a financial section for your pitch deck that really stands out and helps investors understand the financial health and potential of your business.