Writing a first investor pitch deck is an overwhelming process for many startup founders.
You have to calculate your market, figure out your go-to-market strategy and your financials...
we get how many founders just get stuck halfway.
The first challenge here is- a pitch deck is a tool to paint a quick and exciting picture
of a business opportunity. Sometimes that idea is not fully formed, or sometimes the
founders haven't had the chance to sit down and figure out some key business components.
As they build their pitch deck they realize that they need to stop and go think about it.
The point here is, by solving your pitch deck, you are solving many strategic decisions about
your business.
In this video, we are going cover how to answer these business questions, and how to translate
them into writing in the format that investors expect.
Why do I know about this stuff? Well, my name is Caya. I'm the CEO of a company
called Slidebean. We are a DreamIt and 500 Startups accelerator alum and raised venture
capital for our business.
Our platform is a super-easy presentation platform, and most of our customers are other
startups, so effectively, thousands of decks and millions of dollars have been raised with
our presentations.
Without further ado, this is HOW TO WRITE A KILLER PITCH DECK.
Alright, so like I said, with Slidebean, I've worked with hundreds of companies, actually
looked at their pitch decks, and helped them craft better stories for their startups.
Pitch decks are company stories. If you think of a deck as a story, then you can start thinking
about a story arc, with plot points, developments, antagonists, and a climax for the story.
For MOST companies, this is a pitch deck outline that translates into a fantastic story-and we've used it time and time again.
First, the PROBLEM/SOLUTION section. There's a major pain point in the world, and now there's
this solution here to break the status quo.
This solution is excellent; it looks beautiful, it saves time, people love it! This is the
PRODUCT section. This is the first glimpse that people will get into the product, what it does, how users
are finding it essential for their lives, and you are getting repeat use and tons of money
and how the business model makes sense for them.
The story builds up, and we move into the GO-TO-MARKET section (very often overlooked).
We've not only built this awesome product, but we are rockstars at selling it- and there
are tons and tons of customers out there. Large market opportunity.
Moving into the COMPETITORS section. Some companies have tried to do it, they are all
doing it wrong. None of them have the insights that we have, none of them have the tech that we have
and our TEAM has so much experience in the industry that we're just set out to win.
Excitement at its peak! It's the climax of the story.
And then, right then, here's how you investor in the room can join this company.
And this is the ASK section.
You can be a part of this and you can make a shit ton of money and here are the numbers to show it.
There you have it, the 15 slides for a killer deck.
While this is my version of a great startup story, and again, we've used it quite a bit of times.
I'm not making it up. We actually surveyed
the templates and the presentations of some of the most successful companies out there,
and absolutely all of them contain a variation of these ~15 slides.
Investors don't want a 45-slide deck. They don't want a one-pager (well, some of them
do). They certainly don't want a 50-page business plan. They want a presentation that shows
that you and your team have solved all of these in your heads and that you can put in
simple terms and obviously that their money is going to make a difference to get this business to where's it's meant to go.
Alright, now let's dig into the slides.
The PROBLEM/SOLUTION section. The problem (or Opportunity) slide should
be simple. I believe in slides that just propose 3 or 4 sentences about the status quo.
I've used Airbnb's example a bunch of times and I'm going to use it again. This is what Airbnb wrote on their slide.
Price is important for travelers.
Hotels are bubbles. There's no way to book a room with a local
or to host a spare room or apartment.
These are the actual slides from Airbnb's 2009 first seed round deck.
Our team did some redesigning because the original slides were not great.
Notice how each statement is one line long. They are also undebatable: you don't want to get into
an argument with investors at this point.
If you are building a product that a lot of people will use, then that pain point you've
identified needs to be so very clear to so many people. Complex, wordy problem statements
reflect problems that might not be evident to that many users, which could mean you'll
have a harder time convincing them they need what you've built.
Some industries are more straightforward than others, of course, but this is a fantastic
challenge to start writing your pitch deck: write your problem statement in 3 sentences. It
takes time, don't expect to get it right the first time.
The solution is well, a slide that addresses those 3-4 points with, well, solutions. On
this slide, I like to talk about the product in the abstract. Don't get into features yet;
just talk about what it does at its core. It could be a sentence; it could be three
bullet points or three images that connect to the problem statement that you just talked about.
One important tip here is to, once again, avoid tech jargon. Think of benefits instead
of features- so instead of saying: 'fully responsive editor,' rephrase it to 'edit your
presentation anywhere, even your phone.'
This is a killer line right here from a real pitch deck: The Convenience of a cab in NYC + experience
of a professional chauffeur. That's Uber's actual solution slide, on their long time ago seed deck.
In the PRODUCT Section, it's time to brag about the product. Screenshots are good. A
60-second video demo is perfect (no more than 60 seconds, I'd suggest). And then a slide
on the benefits. Once again, talk about the benefit to the user, not developed or fancy features.
With the business model, don't worry too much about different pricing plans or tiers. Just
tell us how the company makes money. Is it a subscription, Saas business? Great, how much per month? Is it based on
API requests, great! How much per API request? And what is the average contract size?
How much is one each one of these users worth to you?
This is not a pitch to a user; this is a summary of how the company makes money.
Which brings me to arguably the most important slide, TRACTION. I talk about TRACTION all
the time; You need Traction to raise capital. Here's Steve Barsh from Dreamit Ventures repeating
the same thing.
For raising serious institutional capital, if you have no traction is really really difficult.
Here's Elizabeth Yin's blog, saying how you need to bootstrap your way to 30% MoM growth.
I'm legally obligated to say yes, but it happens
very rarely. Investors in 2019 want to see built products, early signs of revenue, and
customer excitement. That is the way to stand out. It's not so much about the story
it's about how the company proves that it can make money.
If, of course, you have a considerable, beautiful multi-million dollar startup exit in your background,
well, you are probably not watching this video and you probably don't need my help to raise money.
If you don't have Traction, get it and then come back.
Next up, the Go-To-Market plan. Most of the companies I talk to don't have this solved.
An excellent go-to-market plan should have, A layout of how your customer acquisition process looks,
whether it is outbound sales or inbound marketing. A rollout plan or timeline on your critical
team hires, what they will do, and what your budget is to bring customers in.
Your expected unit economics: how much is your average customer acquisition cost going
to be, and how long will it take you to recover it based on your business model.
Which, of course, translates into how much money the company needs to raise.
The length of your sales cycle.
Knowing the answers to these questions before your product even launches is hard,
not to say impossible.
But once again, translates to the importance of TRACTION before you work on this.
But really, if you are raising money to grow the company, then this slide is absolutely
fundamental. Prove to the investor that you know how you are going to spend their money.
These tactics might fail. They will fail. You will probably need to pivot and adjustment soon- but the
point here is showing that you and your team have a plan, and could come up with another
one if/when this one fails.
Now that we've talked about HOW you are going to get to market, we should talk about the
Market Size.
I'm going to quote Steve again so that you don't have to hear it from me: Top-down market
estimates don't work. 1% of a trillion-dollar market is an irrelevant number to an investor.
It's about how many customers you are going to get.
First big mistake we see people make: they say "oh, if I could just get 1-2% of the market it's a huge total addressable market"
Absolutely not. You can not do a top-down estimate. You got to come bottoms up.
Next thing people do: say "OK, I'll do a bottoms-up". The first example they say is: "wait a second, look how big the problem is"
The total addressable market, they say, look at the impact. For instance, a very unfortunate problem in the US today
is the opioid crisis. They'll tell us "the opioid crisis is a $100B problem."
Right, that's the size of the problem. It's not the size of the market.
You can't define the size of your market being the size of the problem.
Alright, so bottom-up market estimates or approaches. The point of this slide is showing how much money
could this company make. Take your time to do a little research, prove to yourself that this is a
$100MM business opportunity. We can also help with that.
The point is investors want to make sure that the business opportunity that they are investing in
is large enough to make up for their money.
Now that we've covered the business opportunity let's confirm that there are no obstacles
in the way. Let's call them antagonists.
I like 2-axis charts for competitor comparison, as long as you can differentiate yourself
with these two axes. Our product 2-axis slide looks something like this: Automation vs.
no-automation, and beautiful design vs. bad design. That's where we stand apart, and it's
easy to lay it out with two variables.
Most businesses are more complex and will require a grid. This grid lets you, talk about
your advantages much more clearly, and stand apart with specific features and without having
to 'oversimplify' it to just two variables.
If you are a tech startup, the competitive advantages slide is where you get to brag
about your stack. Maybe you have a few patents under your name, perhaps you've built something
nobody can easily replicate, this is the place to add it.
Which also brings us to our team. This slide should answer the question, WHY ARE YOU THE
TEAM TO DO IT? and WHY CAN'T ANYONE ELSE CATCH UP TO YOU? Ideally, you should have years
of industry insight that give you a unique perspective on the problem that few others
will be able to see.
In this slide, BTW, I recommend talking only about your founders and/or core team members.
2-4 people tops. People who are passionate about this and who are getting their hands
dirty with the actual business operation.
I rarely recommend mentioning advisors. In my experience, advisors typically allocate
1-2 hours per month to the companies their advising, which, to me, is not really enough
time to truly impact the business. I've been asked to advise various businesses,
and what I always tell them is, I'm running my gig, so don't have time to
get my hands dirty and get involved the way I would want to, even if I'm excited about
your business. If you give me the half percent or 1% stock
and your business succeeds, I'll end up being a very expensive advisor to you
compared to the time that I could really dedicate.
You are better off booking some office hours from me and picking my brain from time to
time. I'll leave a link to that in the description.
Finally, financials. Investors will expect to see some projections on how you expect
the company to grow in the next five years. EVERYONE knows these are not going to be exact,
but they want to see what your expectations are. If you believe the company
can grow from $0 to $1B in annual
revenue in 5 years, maybe you are a little bit too optimistic
not to say out of your mind. Red flag. If, after year five, it's only at
$1MM in revenue, then perhaps the opportunity is not large enough, or you are not ambitious
enough for their expectations.
Remember, seed stage, and venture capital investors expect you to 10x the valuation
of the business within 5-7 years- that's the only way in which the math works for them.
Go check out our video on equity and convertible notes for some more ideas on how this works.
Which brings us to the ask: where you should talk about how much money you are raising,
and a simple breakdown of how you plan to use it. Categories should be something like
Growth/Marketing, Product Development, and Operations. For a company with a built product,
this growth/expansion budget should be a big chunk of that pie.
Now that is a pitch deck story.
As a final note, these are not rules, more like guidelines. Go ahead and break them.
I, for example, like to kick off with Traction on slide two if the business model is simple
and the company is doing well. It helps capture attention early on. If you have multiple products,
then you have to come up with numerous Problem/Solution combinations for each one of them.
So you can always come up with a challenge on how to reorganize those slides.
I've created a pitch deck template with these slides, which you can download and edit on
Slidebean. Anyone signing up with the link below will get three free months on any of
our plans.
Also, once again, go to slidebean.com/pitch-deck to find out other ways in which we can help
you with your slides.
Thank you for watching. See you next week.