Startup wars: the pitch deck awakens
In a galaxy not so far away, where Jedi-preneurs battle for funding, a common question arises: What should be included in a pitch deck? It's both a relevant question and a craft to learn. Let's start by debunking two main myths about pitch decks.
Firstly, you don’t need to be a Jedi Master of PowerPoint or design. The content is more important than the design. Granted, design matters, but your knowledge of the content and ability to answer potential investor questions is crucial. Secondly, every entrepreneur needs a pitch deck, no matter who funds their growth. The deck is primarily for you, the entrepreneur, and your team, to help you clearly and concisely formulate your venture ambitions, identify the necessary steps for realizing these ambitions, and communicate your plans to customers, teams, partners, and possibly investors.
So if all entrepreneurs should have it - what should a pitch deck include? While every Jedi-preneur should feel the creative liberty to arrange their story in a way that best suits their message, there is a typical structure that often works well. Let’s dig into it!
Disclaimer: It is one of our longer blog posts, so get a cup of coffee (or blue milk!) and brace yourself for it! And let us know if it would help you, the Jedi-preneur, if we fleshed out any of the sections or themes in a sequel post.
Section 1: Introduction / Cover, Hook, and Vision
Cover: Make a striking first impression. Use an eye-catching image, your company's logo, and a succinct, clear slogan that encapsulates the essence of your startup. Avoid complex jargon; simplicity is key to immediate understanding.
Hook: Engage investors from the outset by showcasing aspects that resonate with them. Highlight a glimpse of your company’s traction, achievements, or unique value proposition—anything that underscores the promise and potential of your business. Aim to create a sense of urgency and excitement, spurring investors' curiosity to learn more and want to scroll through the rest of the deck.
Vision: (Optional) Share your long-term aspirations. If it aligns with your pitch, articulate the broader impact or future state your business seeks to achieve. This forward-looking perspective can give investors a sense of the scope and scale of your ambition.
Section 2: Pain & Painkiller
Pain: Delve into the specific problem your business is uniquely equipped to solve. The most effective pain narratives are those that are told from an individual’s perspective, not an abstract, impersonal one. Detail how customers currently grapple with this problem and the shortcomings of existing solutions. Concentrate on tangible pain points such as excessive costs, inefficiencies, or user frustrations, and use data-driven insights to validate these issues.
Painkiller: Articulate how your product or service effectively addresses these identified pain points. This section should highlight the unique advantages and capabilities of your product or service in alleviating the customer's pain, demonstrating clear value and effectiveness.
Section 3: Product
Current Product/Features: Begin with an engaging overview of your current product line, focusing on how each feature translates into tangible benefits for the customer. Avoid discussing features in isolation; instead, connect them directly to customer needs and how they enhance the user experience. Utilize visual tools to bring your product to life for the audience, such as screenshots, demo videos, step-by-step diagrams, customer testimonials, or case studies.
Future Roadmap: If relevant, outline the roadmap for upcoming products or features. Focus particularly on those you plan to develop within the timeline of the current funding round. This future outlook should give investors a sense of direction and innovation.
Section 4: Business Model
Business Model: Detail your revenue generation. List your diverse revenue streams, whether they are one-time sales, subscriptions, or other models. Include key financial details like major costs, distribution channels, revenue splits, margins, and the average deal size. Highlight your growth potential and scalability.
Traction: Demonstrate your product's traction with meaningful metrics. Steer clear of superficial metrics like download numbers; instead, focus on metrics that indicate ongoing engagement and adoption, such as app stickiness and repeat purchase rates.
Section 5: Market & Go-to-Market Strategy
Market: Determine your Total Addressable Market (TAM) with a straightforward yet detailed formula: potential customer numbers multiplied by the price per customer. Precision and a focused understanding of your market’s specifics are key in these calculations. Aim for realism over grandiosity; your TAM should reflect the market you specifically target, not the size of the entire industry or problem. Utilize a bottom-up approach for accuracy, and keep a log of your assumptions for validation. If your business offers multiple products or services, combine the TAMs of each segment for a comprehensive market size.
Go-to-Market Strategy: Start by showing the ideal customer for your product, a crucial part of your Go-to-Market (GtM) strategy. Segment your market based on well-defined criteria, then sequentially target these segments, initially focusing on your most accessible and profitable customers. These are typically characterized by easier discovery, shorter sales cycles, and lower customer acquisition costs (CAC), even if they represent smaller individual sales. After discussing customer profiles, move on to distribution and marketing channels. Rather than merely listing potential channels, delve into one or two key strategies, analyzing their potential and economic viability.
Market Trends: (Optional) Conclude this section by discussing current trends, new technologies, and forces shaping your market, providing a broader context for your product and market strategies, and proving to investors that you will continue to be relevant as the industry evolves.
Section 6: Competition
Competition: Determine who your main competitors are and how your business uniquely stands out. For example, use a 2x2 matrix to visually demonstrate the specific niche you occupy in the market and compare your product’s features with those of competitors. Consider presenting competitors’ fundraising achievements to underscore the market's vitality. Be prepared to discuss the defensibility of your product against imitation, barriers to entry, and reasons why your solution is novel and previously unattempted.
Section 7: Why Us / Team
Team: Showcase why your team is uniquely equipped to progress the company to its next major milestones. Highlight the key members, detailing their skills and roles in achieving the company's goals. Don't forget to include your advisors and your spheres of influence. Make clear connections between team members’ expertise and your planned milestones.
Section 8: Financials & The Ask
Financials: Approach this section with justified confidence. Remember, higher projected revenue and growth rates can lead to a higher company valuation, which in turn means less equity dilution. And yet these projections should be backed by sound assumptions for your financial model to demonstrate reliability. Provide a 3-year forecast, which should include annual revenue, net income, and key metrics like customer numbers and conversion rates.
The Ask: Be explicit about the amount of funding you're seeking. Clarify how long this capital will sustain your business (your 'runway'). Outline how you plan to apply these funds, connecting them to tangible milestones you intend to achieve. These milestones should align cohesively with the overall strategy and goals presented throughout the rest of your deck.
Yoda’s last two cents
The pitch deck is not just a presentation; it's the visible manifestation of the Force. While not every detail of this preparation will be in the slides, it will inform and support your responses to investor Q&A sessions. This process involves meticulously anticipating any questions that might come your way.
It's also important to recognize that the pitch deck is a living document, shaped by ongoing feedback from investors. Continual refinement of your messaging and strategy is crucial.
And finally, an effective pitch deck is more than a collection of sections or a specific number of slides. It is a compelling, fluid narrative, much like the epic tales of the Star Wars saga. The essence of a great pitch deck lies in its ability to tell an engaging story that captivates investors.
May the Pitch Deck Force be with you!