How to Create a Winning Pitch Deck for Investors

A pitch deck is a short, 10 to 15 page document. A founder will use a pitch deck when approaching an investor to introduce his/her company and make the case for investment. The pitch deck is typically the first formal document an investor will read about a startup and very often it is the first piece of written copy a founder will have put together that will determine whether the founder gets a meeting with the investor. We frequently see founders use their pitch deck as a substitute for their full business plan. It’s a major mistake. The pitch deck is brief and organized; its job is to make the argument for why someone should invest in your company.

For startups looking to raise venture capital, presenting their pitch in the form of a deck of slides is an increasingly common practice. The pitch deck forces the founders to distill the information that investors want to know – things like the problem the startup is trying to solve and how it plans to solve it, the size of the market it is going after and why, the competitive landscape, and (most importantly) the team behind the startup and their ability to execute. However, if not done well the opposite can happen, and the investor is bogged down by annoying slides that highlight founding team member’s previous employers or irrelevant historical events.

Of the many different elements involved in fundraising for your start-up, one will have a far greater impact than any of the rest on your final numbers: the quality of your investor presentation. The presentation will help drive meetings, those meetings will drive follow-up conversations, and the follow-up conversations will drive term sheets. The best thing you can do to ensure the rest of the fundraising process unfolds positively is to hone the content of your presentation, and send it out to the very best investors. A good pitch is not guaranteed to generate term sheets, but it can guarantee follow-up conversations, which is what will eventually translate into a term sheet.

What Investors Want to See in a Winning Pitch Deck

As a startup looking to raise venture capital, your pitch deck will be reviewed in a hurry by key investors, each making split-second judgments about certain key characteristics of your business. These are more important than the number of slides you have or how cool they look.

Second, consistency. Your audience’s time is limited, so you want to ensure that they are left with a solid theme about your company that they can recall long after you’ve left the room.

At GTR we pay huge attention to the scalability of businesses, and we expect significant scaling to take place. That means companies must grow significantly and efficiently. Therefore, your models should not scale by headcount or by manually increasing effort as you grow.

The market opportunity at any given startup is likely to be somewhat realistic. To get venture-backed, the market opportunity needs to be real and supported by evidence. “This is a trillion-dollar industry” is not sufficient – you have to describe the size of the segment you’re attacking and explain to an investor why this is the segment you’ve chosen to attack, and back it up with evidence.

For Venture Capital - Is Traction Important?

Traction is a word used and abused within Venture Capital on a daily basis. Whether you are a mature company looking for a series D investment or a pre-Product / Market Fit startup looking for that first check, someone along the way will say that your startup has gained traction in some form. Traction means users, happy customers, successful pilots, thousands of people eager to be wait-listed for your service and users week-over-week growing at a rate that is increasing dramatically. In short, Traction is proof that people want and are using your product.

The financial projections would then complete the analysis, these wouldn’t necessarily need to be exact but defendable. The projections used for the plan seemed to be relatively realistic in nature.

Essential Slides Every Startup Pitch Deck Must Include

So what makes a good pitch deck? There is no right or wrong, but there are certain expected slides (e.g. Executive Summary, Market Size and Growth Rate, Competitive Advantage, Road Map) that come across the desks of experienced investors on a daily basis. The challenge to you is to never have a slide come across their desk that you can’t explain why you included it.

Problem

Investors fund solutions to problems. If the problem is not interesting, nothing else will be interesting. Describe the problem that your product or service solves in enough detail so that someone who has never heard of your idea can understand it. Describe the problem sufficiently to clarify how existing products and services address problems for classes of users who would use your product or service. Quantify the frequency with which this problem costs money, time or pain for people on an ongoing basis in real numbers (dollars, hours, degrees of pain).

Solution

Try to get back to the original problem at the end of your slides. Keep your slides brief. And keep your description of your product brief and to the point for the non-technical viewer – something like 2-3 sentences to give them a sense of what you’re proposing. Then you can go into more detail in the meeting. An illustration or screenshot is really helpful here.

Market Opportunity

For most investors, evidence of a large or rapidly growing market is a major consideration in their investment decision. In addition to showing the size of the market, it can be helpful to articulate the total addressable market (TAM), the serviceable addressable market (SAM), and the specific segment of the market that you will be going after initially (SOM). The more third party evidence you can add to your plan the better. Typically the bottom-up approach (number of customers, x revenue per customer) is more believable than the top-down approach whether it comes from an industry analyst or some other public source.

Business Model

This slide outlines the different sources of revenue and how the company is monetizing. This will include information on pricing, terms, billing frequency, and if the company has multiple sources of revenue, rank on contribution today and contribution to growth going forward. This first look into the unit economics of the company will then be expanded upon within the financial model.

Traction

We typically use Hypothesis slides on seed-stage companies. To get the most out of these slides, make sure to include metrics that evidence your hypothesis and show the progress you’ve made testing it. In the example below, the slide by the founder of ZenPayroll (now Quickbooks Payroll) includes monthly recurring revenue, active users, customer retention, and even pilot to customer conversions–all of which show an increasing value.

Go-to-Market Strategy

Customers. Investors can tell when you’ve given some thought to acquiring customers and have scaled acquisition channels. Preparing for your pitch means identifying 3-5 acquisition channels and making statements about customer acquisition cost for each (even if you have not done it yet). Share learnings and anecdotes that validate the go-to-market strategy you’ve developed and that demonstrates results (even for a short period of time), rather than pure, unprecedented, innovative acquisition channels.

Competition

Every market has competition – whether that competition is direct or indirect. Honestly determining the level of competition in a market and then positioning your company relative to that competition is a crucial step in creating effective marketing strategy. This can start with a simple 2×2 matrix to organize your thoughts.

Financial Projections

A forecast of revenue and expense over three years to help the investor understand how they can use their investment to help your business achieve its planned goals. A view on how the business will grow at a sensible and sustainable rate. You may have experienced rapid acceleration in growth in the past ("hockey stick growth") - if so, this must be clearly justified.

Team

Venture investors at earlier stages often invest in the team as much as they do in the idea. Make sure that all founders have relevant experience before seeking investment, either experience working in a relevant industry or domain, or experience as a founder of another company - (successfully) sold or not. Be open about the obvious holes in your team, e.g. that you lack a technical co-founder for a deep-tech startup and explain to investors how you would go about recruiting for those skills.

Funding Ask

Make sure your ask is clear on valuation, amount of capital and the milestones that the capital will help you hit. Vague asks are uninteresting to investors. Provide thoughtful consideration on how you will use the capital to grow your organization and clearly communicate your reasoning. Example: “We’re raising $1.5m to build out our engineering teams, enter two new markets and hit $500k in annual recurring revenue by Q4.”

How to Structure Your Investor Presentation for Maximum Impact

Slides in order matter more than most founders realize. An investor presentation is a story, and that story follows a logical structure of problem, solution, proof, opportunity, and ask. Each slide should prime the investor for the next one, and together they should be so clear that the founder can read them to venture capitalists in order without explanation.

Startup deck best practices include never starting a slide with information relevant to your company, such as information about your company, your founding team, or your company’s history. Investors do not care about this information until they understand the problem that you are trying to solve for customers, have established sufficient context for the investment ask, and understand the value proposition of your startup. The proper deck order ensures that the investor gets to the necessary level of understanding of your company’s credibility with the customer before you seek to invest capital.

Make the viewer’s eye follow the visual hierarchy of your slides to where you want it to go. A single line of standing alone text, a single graphic, chart, etc. and supporting text if you have to include it is better than a slide that’s a tasseled slipcover of information. Your audience will understand the speaker’s content as he delivers the message, and the slide’s purpose is as an anchor point for one major point. It is not intended as a substitute for an extended handout.

Consider the delivery. Most investors will read your pitch in isolation of a meeting before. As a result your slides have to be able to be ‘understood’ in isolation but be part of the overall narrative and flow of your pitch. Read the deck yourself – does it deliver your message?

Common Pitch Deck Mistakes Founders Must Avoid

Hardworking, successful entrepreneurs spend weeks and even months crafting the perfect pitch deck only to have their opportunities and hard earned investment lost in a matter of minutes due to a few avoidable mistakes that experienced entrepreneurs commonly make before their first meeting with potential investors. Don’t let that happen to you. Learn from their mistakes to avoid costly missteps.

• THERE IS TOO MUCH TEXT ON EACH SLIDE- Bullet points should be short phrases, not paragraphs. Remember, if you are writing a lot of text on your slides, you are really writing a document, not a pitch deck.
• Horrendously poor investment pitch design (a mess of fonts, colours, and over crowded text – usually indicative of a lack of attention to detail). Investors will unconsciously extend the same standards for the design and management of your business.
• Unrealistic financial projections (i.e. showing 10x revenue growth in year two with no explanation of how you get there) can damage credibility instead of enhance it.
• The funding ask is not clear or unspecified - It is crucial to your potential investors' understanding of both 1) how much funding the company is looking to raise, and 2) why the company needs to raise funding in the first place. If you haven’t considered how to allocate capital correctly, it will be evident in your pitch.
• We Miss: Traction. For most of the startups in the room, it *is* still very early days. But “we’re pre-revenue” isn’t as viable of an excuse at seed, and we’d love to see some numbers to back up hypotheses and illustrate how capital will be used (e.g. interesting pilot customers, very rapid waitlist growth, very sticky user and product interaction, a few early LOIs, etc.).

For a deeper look at what goes wrong during the full fundraising process, our article on the Top 5 Mistakes Startups Make When Raising Capital covers the broader picture beyond the pitch deck.

Best Design Tips for a Professional Startup Pitch Deck

I’d stress that your pitch deck need not be beautiful, but cannot look terrible. A well designed slide deck is crucial in showing a certain polish and demonstrating to investors that you are ready for capital, initially through their first impressions of your ability to execute.

Try to keep the number of font families and weights limited. Stick to one font family throughout the design, using different weights for headings and body copy. Any ancillary components (captions, calls to action etc) should also use the same font family, sticking to a standard choice like Inter, Lato or your current house font.

Use your brand colours to full effect. Consistency when using colours on your slides is important. Try to stick to no more than 3 colours for the slides including 1 primary, 1 accent and a neutral background shade. More colours than that comes across as lazy and will detract from the message on the slides.

White space is important to the legibility and memorability of slides.Crowded slides are harder to read and to remember than more generous slides. Give your elements some room to “breathe.” If a slide looks too full, it’s either a two slide deck or a lot of content has to be cut.

Use charts and visuals to add value where appropriate, but resort to plain text if a visual isn’t up to par. A simple bar chart showing month on month growth is far more powerful than an equivalent written description. However a simple bar chart is useless if the reader has no idea what it is showing, or where the data came from.

Keep the message simple, one message per slide. Just before finalising the colours, font, and layout of a slide ask yourself: What is the one thing you want the reader to take away from this slide? If the answer is more than one thing, then the slide has to be rewritten. A good headline statement ends a thread of discussion. It is not just a title of a section of content. “Revenue growing 15% month-on-month” is far more useful than “Revenue Growth”.

What Financial Metrics to Include in Your Pitch Deck

The series of blog posts we wrote on the startup pitch deck has generated a ton of traffic for VentureHacks (and comments from entrepreneurs). A common question from the comments has been: Should I include the whole of my financial model in the startup pitch deck? The answer is no. Your full financial model should reside in a separate Excel file that you distribute to investors during due diligence. The financial section of the pitch deck is only one page: it’s meant to communicate a few headline metrics, give the viewer a sense of the direction you’re headed and provide an understanding of the overall economics of your startup.

Our revenue forecast is provided for three years and we have outlined a number of assumptions to support the figures. We have also set out to consider what the drivers for such growth will be, including new customers, increased revenue from existing customers or growth in different geographic locations.

When evaluating the potential to scale a business model, in addition to looking at unit margin, it is important to consider two additional metrics: Customer Acquisition Cost (CAC) and Lifetime Value (LTV). For L Laika, we aim for a high LTV:CAC ratio of 3:1 or better.

Calculating your burn rate and runway is also crucial as a startup. This is one of the things you should be able to rattle off to investors at any time with the money you have in the bank and at what point you’ll actually run out of money and need to go fund look for your next round of capital. The more accurately you can give a number to these two variables the better off both you, and your investors will be. Understanding these numbers will help your investors better understand your progress toward their milestones prior to your next funding event.

Can you share the unit economics of the core product of the company and how that should improve as the company grows? Ideally I'd like to know the gross margin of the core product and how that is expected to improve for shareholders as the company scales. High gross margin products should increasingly drive profitability as a company grows in size, and I'd like to understand why that is the case for products with thin gross margin as well.

For growth companies, it’s helpful to have a number around revenue or Annual Recurring Revenue that you can reference during conversations with investors. For companies that are still pre-revenue, it’s helpful to have a leading indicator of healthy demand for service that can serve as a useful proxy. This could be metrics from completed pilots, the value of letters of intent (LOI), etc.

If you’re preparing to raise and want expert support building a pitch deck that opens doors, our fundraising advisory services are the right starting point.