Funds are the center of attention for any business. All of us are familiar with the importance of liquidity in our general life. Just like that, the general life of any business, be it a startup or an established one requires demands for a continuous and sufficient flow of funds. This relationship between fund and business goes hand in hand, shortage of funds leads to a liquidity crunch in a business whereas a regular flow of funds allows a business to flow freely according to its desired pace.
As you may or may not be aware, there are several sources of funds that a company depends on and choose from for fulfilling its financial needs. Companies can avail funds from their authorized capital by issuing shares or can retain its earnings if it is an existing business. But throughout the life of the business, many opportunities and threats knock on the doorstep of the business which calls for sudden accumulation of finances. The need for funds is never-ending with businesses. Till the time a business transforms into an empire, becomes self-sufficient and self-sustained, that it does not need external support, its always on the lookout for new revenue sources. But for thriving businesses that isn’t the case.
So Where Can A Business Look For Extra Funds? The answer is "Investors"
The next most obvious question to pop up in mind is
Who Are These Investors And Why Do They Invest?
To acquaint you further with the term ‘investors’, these are the saving graces of the business world, who make companies’ wishes for more and more funding come true. These are the people or institutions who invest money in companies for their business ideas with the expectation of higher returns at minimal risk. But Investors are like eagles of the market. With their critical evaluation skills, they can spot opportunities in various markets and plan the investment in one which seems most promising and can pay off higher returns. Investors work as catalysts in activating latent areas of the market by seeing potential ideas and bring them to life.
In the words of Albert Einstein
Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty lies opportunity.
"In the middle of difficulty, lies opportunity". Facing challenges and difficulties are prerequisites in business. Only those who intend to succeed strive to overcome their shortcomings and conquer them. Any business that intends to lure in investors, has to be thoroughly updated with the challenge that can be countered and converted into an opportunity serving both, business and investor. Such companies never go unnoticed by investors. The most attractive attribute for investors is the tactful and fierce nature of the business, and its ability to generate reward from complexities.
The next question that arises is,
How Do Companies Pull Investors Toward Themselves And How Do These Companies Make Themselves Exigent?
It is a task full of hassle and conviction. The fact that every start-up and established business must keep in mind while functioning is to scan the business environment so that it would be easier to pinpoint challenges and recognizing rewards. It won’t be wrong to say that, it isn’t easy for any business to attract and impress investors but only those companies excel who can provide a proper and convincing "pitch deck" for their idea.
What Is A "Pitch Deck" You Ask?
It is like NOS for making an impression on investors. It accelerates the chances for the company of getting an investor. A pitch deck in technical terms refers to a summarised representation of a business that includes all details from its description to the details regarding the investment plan and its return. A pitch deck is predominantly a visual presentation, which usually consists of not more than 13 to 18 slides. Why so? Because the investors are busy people and they will have a significantly short amount of time to go through the presentation. It’s a safe assumption and must be made before preparing a pitch deck to leave a deep impact in a small amount of time. Thus, this presentation should be as short as possible yet at the same time substantially filled with information regarding investment plan, scope, market strategy, return, and requirement of fund.
Investor pitch deck presentations can be presented to investors personally, or through email. In times like today when technology is at our arm’s length, email is an extremely convenient way to convey but is certainly less impactful than a personal meeting. For this purpose, it is crucial to understand the seriousness of building a pitch deck that is well-defined, articulate, and straightforward in conveying your plans and fund requirements.
Now, What Are The Ingredients Of An Investor Pitch Deck? Slide/ points/ sections we can give it any name. The major motive here is to address the content that is included in the pitch deck. Now pay close attention as these are the core details that are essential to be shared with the investors. It is quite tempting for one to indulge in making a wordy presentation with loads of company information but keep that in mind that investors for sure will withdraw from the presentation if it is too detailed and ambiguous.
Let Us See What To Include In An Investor Pitch Deck? The list consists of 12 to 15 sections that will guide you through making an investor pitch deck that will increase the chances of winning investors exponentially.
Company Overview
The Mission/ The Vision of the Company
The Team
The Problem
The Solution/ Product
Market Opportunity
Business Model/ Revenue Model
Marketing Plan/ Sales Strategy
Traction/ Roadmap
Competitor/ competition
Technology
Financials
Investment plan and Allocation of Fund
Let's understand the sections in detail. These points are suggested to be used in the provided order because the flow is just apt for presenting. The presentation starts and grips the invertors and finally investor’s curiosity is quenched by to-the-point further details. it tackles every aspect of an Investor Pitch Deck in a systematic order.
1. Company Overview
This is most preferably the first section in an Investor Pitch Deck. It is so because it describes your company’s whereabouts and highlights the significant details. It is suggested to present company overview in 5-6 bullet points. This imprints a clear picture of your business in the investors’ minds.
Company name
Establishment date and location
Service/ Product offered
Slogan
Future goal
2. The Mission/ The Vision of the Company Though interchangeably used, mission and vision are two different things and both hold separate meanings. Vision is rather a broader term than a mission. A mission can be associated with the growth of a product/ service in the market, like a successful market for the product/ service in the short term. But vision on the other hand has more to do with the company's dominant purpose in the market. Vision is broader and future-oriented and is associated with long-term goals or for the rest of the life of the business. Whereas mission is more immediately focused and short-termed Vision = Destination whereas Mission = How to get there
3. The Team The third section is an introduction to the team. This is the team that works behind the scenes and towards the progress or success that the company is achieving or will achieve in the future. The introduction of the team adds that personal touch to the business deal. Basic whereabouts are mentioned here like name, position, qualification, expertise, etc. what exactly needs to be provided here is still a matter of choice but it is crucial to have this section. It is suggested to add small pictures as well.
4. The Problem
After introducing the team, comes the purpose for the whole operation, ’The Problem’. It is the cornerstone of every business’s existence. There will always be a problem that the owner/ founder saw which compelled them to take action and solve it through a business. Thus, we need to factually and practically justify the below-mentioned points:
How the problem is affecting the masses
Need to resolve the problem
For labeling the problem as a serious and problematic issue we should tell/ recall a life incident that leads to the origin of the problem and emphasize the importance to solve it. The reason why it is recommended to do so is that a personal experience is far more realistic than a fabricated situation or assumption of difficulty. Keep in mind if you are not solving a new problem then at least try to explain the most effective way to go about it. Don’t forget to mention the solutions already in existence and their inadequacy to handle the current situation.
5. The Solution
The fifth section entails the product/services that your company will provide as a solution. Many a time’s two separate slides are prepared for the section ‘solution’. One slide talks about the solution and the other about the product, but it’s not recommended to do so. The reason being, Duplication of information. This section includes details regarding:
The characteristic of your solution whether it is a product or service
Why it is better than already existing solutions
Advance technology or technique used to make products/services
Highlights that make your product stand out from the other manufacturers or providers
6. Market Opportunity The sixth section is where it starts getting interesting for the investors. They get an understanding of the opportunity that the market has to offer in regards to the product. This section provides a glimpse of your potential market to the investors. The help of data presented in graphical or pictorial form catches the attention of the investor. It is advised to project that the market is vast and has ample growth opportunities. Everybody expects higher returns and so does the investor. Thus, conveying the profit-making ability of your products is what will convince the investors to invest in your idea.
7. Business Model/ Revenue Model
The seventh section in the investor pitch deck addresses how market opportunities can be turned into actual financial rewards in the form of revenue. It includes plans decisions regarding:
Price and pricing decisions.
Techniques and the value offered to the customer,
The proposition
Scope and ways to increase revenue with time
8. Marketing Plan/ Sales Strategy
This section deals with all the market-related strategies of the company in detail and a crisp form. In other words, it focuses on advertisement strategies and modes that the company has in mind to reach its target segment.
How the products will be advertised
Methods of advertisement
Content and a potential tagline
Suitability of advertisement based on market
It certainly is an important and interesting detail for the investors. The advertisement works as a push for getting started with the plan. Whenever any sales strategy fails, its consequences are faced by the company as their products remain in the store incurring extra unrecoverable costs. Thus, this section helps investors in understanding all the important whereabouts of the business and its relevant and expansion plans.
9. Traction/Roadmap The ninth section deals with traction. Traction in business refers to the pace and momentum envisioned for the progress of a startup company. It is positive to mention but it’s still optional. If your product/service is receiving good attention and has made progress then this slide is worth adding as it has a positive impact on your image. It doesn’t necessarily mean to project market progress rather positive feedback, testimonials, or anything favorable can be included.
10. Competition/ Competitors
In addition to all the important sections mentioned above, the tenth place is saved for competitors. Competitors are the ones with whom your company will be competing and has to stand out at all costs. Investors are keenly interested in understanding your superiority over your competitors. After all, if you aren’t having any significant competitive advantage over your rivals, what's the point of them investing in your idea. Thus, while preparing this point specifics should be mentioned about:
Competitor’s quality
Your Competitive advantage
Plans to make your product superior and more reachable
11. Technology
Mentioning the technology is optional but, it is suggested to be added if the prime functioning of your business deals with technology. It allows the investors to know that you work smart. If you have any significant technical support that gives a competitive edge, mentioning that would give your presentation a +1 for sure
12. Financials
The second last section suggestively should be about financials, because after this slide investment proposal has to be kept on the table. It need not be long and wordy but it surely needs to be full of all financial details such as past few years financial projection, total expenses and revenue, burn rate, EBITDA, and other pieces of information that reflect financial health in an instant. This gives an investor practical knowledge about your finance-related activities and increases confidence in your idea.
13. The Investment and allocation of funds The last section is the most awaited section that both presenter and investor wait for. This is the time where you let the investors know about your fund requirements. What is the amount of investment that you require, the areas and duration for which it will serve the financial needs of the company, accomplishments that are mostly expected to be achieved with the investors’ proceeds, expected rate of return that will be paid back to the investor in form of ROI,? It has to answer all the queries as to how the investor will profit from investing in your venture.clear-cut
If you already have any investors, mention them clearly as it is the right of the investor to know with whom else the position is being shared. Companies whose investment slide is outstanding, realistic, and pragmatically ambitious are most likely to receive funds.
The above-mentioned 13 sections are to be used to leave an informed and deep impact. If your presentation exceeds this number, don’t worry about it. It is fruitful to practice and have a demo presentation to understand any faults or areas of boredom. It will also prepare you for any counter questions that you might have to face while presenting. It always serves better to be prepared in advance.
Important Do’s And Don’ts For Investor Pitch Deck Do’s
It has been observed that most of these pitch decks don’t mention the use of “Confidential and Proprietary. Copyright © by “name of your company”. All Right Reserved.” In their presentation. This is usually missed by presenters. Your document and details mentioned in it are close to your company’s heart. Just because of negligence don’t risk putting confidential details about your company at risk. So, make it a habit to mention the copyrights.
Take a stand and support with data and information that this market opportunity is big and has definite potentials to grow.
Hire a graphic designer to design your presentation which looks and feels professional. It must be put together with elegance. Use eye-catching and interesting images and graphics blended with words. Don’t get me wrong here. The content is every bit important. But when presenting all we have is just one chance for convincing the investor. So, it’s always safe to have an eye-appealing presentation.
If an in-person meeting is scheduled with the investor try to send the presentation in a PDF format for easy access so that they can have a read beforehand.
When presenting in person try to include the product(s) in hand. If it is a service a demo should be arranged.
In-person meetings provide space and opportunity to present highlights and details on the spot. It gives you a chance to improvise and making the most of such situations. So, Alway opt for an in-person presentation rather than a virtual one.
Treat this opportunity as your chance to narrate the story about your business with enthusiasm and engage your investors in your passion.
Display and highlight all sorts of positive responses and attention about your product which are received from the market.
Use suitable and readable font style, size, color, and alignment along with clear cut heading and subheadings.
Don’ts
The number of slides shouldn’t be more than 20. This is the standard length. If extra information needs to be mentioned add it in Appendix.
Slides shouldn’t be wordy, avoid long sentences and lengthy paragraphs.
Financial details can be provided in a follow up thus it’s okay not to mention all the financial details.
When it comes to the use of acronyms, don't use many. Try to use very few and that too which are universal and easily understood.
To have a positive impact, never defame your competitors. It gives an impression of either overconfidence or insecurity and gives off a very negative vibe.
I have summed up all that is required for creating a good pitch deck best to my knowledge. I hope it helps you and guides you in preparing an imprinting pitch deck.
Happy creating!
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