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How to make an investor pitch deck that really works

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In sales, a well established principle is, before one starts pitching to a customer, one should listen to what the customer has to say. That is because if you listen carefully he will lay out his needs in front of you, letting you present your solution in a way that fits into his needs perfectly.

The principle should be equally useful while pitching to an investor while raising funds. I can’t see a reason why it won’t be. But no one seems to be suggesting “you should listen more and talk less during an investor pitch”. Probably it is assumed that we already know what investors look for in a business. Is it a rockstar team; or may be a huge market size or is it traction or a break-through technology? Or may be different investors look for different combination of those things.

Actually all of those are means towards an end. They help investors figure out something more specific and quantitative that all investors look for in a startup before investing. But what is it?

A 10x return on their investment. That is it.

That number may vary from an early stage investor to a growth stage one, but you get the point, right? Not everyone says it out loud, because it makes them look money hungry, but that is what an investor business is all about.

But, now with that knowledge, how do you tweak your pitch and your pitch deck to make an investor feel that you are offering him an investment opportunity that could deliver a 10x return? And more importantly, can your business even deliver 10x return?

The above presentation by Deck Rooster answers those questions and offers a structure (not a template) for an investor pitch deck for startups. Check it out.

How to make an investor pitch deck that really works

  1. 1. Pitch Deck How to make an Investor that really works Image
  2. 2. raise money is it time to for your startup? Image
  3. 3. feels daun7ng? everything in a pitch deck But explaining Image
  4. 4. is for you This Presenta7on then Icon You may wanna go full screen
  5. 5. Investor is to persuade the investor to invest in your business. The Purpose of Your Pitch Deck Image
  6. 6. So let us start by answering this question: What does an investor really want?
  7. 7. 10x Return on his investment in 4-5 yrs * $4M Angel : 20%Founders: 80% Company Valua=on: $5M $1M *The expected growth rate & =me varies from early stage investor to growth stage investor, but you get the point Image
  8. 8. $4M Angel : 20%Founders: 80% Company Valua=on: $5M $1M But, for his share to grow 10x... Angel : 20% $1M
  9. 9. 80% AngelFounders’ Share 20% 25% 12% 18% 25% 15% Series A Series B Series C ESOPsFounders’ 5% Angel $200M $5M 40x Series A Series B Series C Company Valua=on ...your business valuation has to grow 40x $1M $10M As the angel dilutes from 20% to 5%, for his share’s value to be 10x, the company’s valuaCon has to grow 40x 10x ’
  10. 10. Through the process of Pitching…
  11. 11. investor wants to figure out the Probability of 40x valuaCon 40x? Image
  12. 12. the probability of 40x valuation in his head... Higher Icon
  13. 13. the probability of him signing the cheque Higher Image
  14. 14. So the Job of your Pitch Deck is to show the likelihood of 40-50x growth in 4-5 years Image
  15. 15. Valua7on 40x Growth in 40x Growth of Business Market Economics Impact of = +/- On a side note... Only thing under your control Icon1, Icon2, Icon3
  16. 16. Valua7on 40x Growth in 40x Growth of Business Market Economics Impact of = +/- Are you convinced that your business can grow 40x in 4-5 years?
  17. 17. 3 Things Pitch Deck that your has to bring out to establish high probability of 40x growth in 4-5 years Here are Icon
  18. 18. Opportunity Show that you have discovered a real opportunity 1 Icon
  19. 19. Growth Poten0al 1 And its value can grow 40-50x in 4-5 years 2 Icon
  20. 20. Execu0on And your team can seize the opportunity 1 2 3 Icon1, Icon2, Icon3, Icon4, Icon5
  21. 21. Each One in Detail Let us talk about
  22. 22. 1 Opportunity Show that you have discovered a real opportunity
  23. 23. Sir, your interview starts at 2pm. Would you be here on 0me? I am s0ll wai0ng for my cab. Possible to reschedule it? Set the Scene Step 1 e.g. Opportunity Before you talk about the problem you solve, set the scene to one in which the pain of your customer would be at its peak. Image1, Image2 That won’t be possible sir. Sorry.
  24. 24. Step 2 Highlight the Problem and also its Impact Make sure it seems like one of the most important problems for your customers. JOB Opportunity Image1, Icon1, Icon2, Icon3 Unreliable Cab Missed Job Opportunity
  25. 25. Highlight one or more factors that are most important to people in a solution for the problem Show what People Care about Step 3 Reliability Opportunity Image
  26. 26. Show why current solu7ons don’t work Highlight how the existing solutions miss out on fundamental needs of people Step 4 Unreliable Slow No Parking Opportunity Image1, Image2, Image3, Icon1, Icon2, Icon3
  27. 27. Showcase Your Solu7on Highlight how it would change the life of a user. It should be apparent that customers would simply love this solution. Step 5 Opportunity Image1, Image2, Image3, Image4, Image5
  28. 28. Show Customer Valida7on Show that there are real users out there using and loving the solution. Step 6 Opportunity Image
  29. 29. 2 Growth Poten6al Show that the value of this opportunity can grow 40-50x in 4-5 years
  30. 30. Current Growth Nothing can make-up for the lack of growth. It is a proof that you are moving fast in the direction of 40-50x growth. As Paul Graham famously said: Startup = growth. Opportunity Growth Poten=al Image
  31. 31. Team’s Reputa7on Do you have a team w ith a reputation that is enough to get you funded? If not, then skip it for now. ’ Opportunity Growth Poten=al Image
  32. 32. Current Revenue Got grow ing revenues? Investors love it - though mostly if you are a B2B startup. But no one hates it. Opportunity Growth Poten=al Image
  33. 33. Draw Comparison Has another late stage company got acquired or funded recently? Use it to establish the valuation benchmark. Even better if you can show you are doing better on key metrics. Opportunity Growth Poten=al Image
  34. 34. Unfair Advantage Do you have an advantage that no one else has and could be instrumental to success. Entry barriers, pre-established network, patented tech etc. Opportunity Growth Poten=al Image
  35. 35. Industry Hotness An industry w ith lot of action means higher probability of downstream investors, better valuation and even an exit. Investors love it. Opportunity Growth Poten=al Image
  36. 36. Huge Market Show the investors how big is/are the market(s) you w ill cater to. Remember, bottoms-up calculation is better than top-down. Opportunity Growth Poten=al Image
  37. 37. Assets you own Do you own some valuable patents, key partnerships or marquee clients? Anything that enhances your value at exit. Opportunity Growth Poten=al Image
  38. 38. Risks & Mi7ga7on Plan Any doubt or obstacle that an investor perceives as limiting the growth, is a risk that you should talk about along w ith a mitigation plan - to maximise the potential exit valuation. Tomasz Tunguz have put together the 11 types of risks that VCs evaluate Opportunity Growth Poten=al Image
  39. 39. Unit Economics While you might grow, would you be able to make money? Can your unit economics be cashflow positive in the near future? Show, do not tell. Opportunity Growth Poten=al Image
  40. 40. 3 Execu6on Show that your team can execute to perfection and seize this opportunity
  41. 41. Team. Not Players. Show how your team is the perfect group to seize this opportunity. Establish the key skills/experiences required to succeed in your business and map that to the skills/experiences of your team. Opportunity Growth Poten=al Execu=on Image
  42. 42. 4 Offer Bring your pitch to a closure by making the investor an offer Icon
  43. 43. Current Ownership Before you make the offer, give a quick view of who has put in how much money till date and when. Opportunity Growth Poten=al Execu=on Offer Image
  44. 44. Make the Offer How much are you raising? What would you achieve w ith this money (3-4 measurable milestones)? How much amount you already have a commitment for? When do you see the next round happening? Image Opportunity Growth Poten=al Execu=on Offer
  45. 45. Summarize Close it by summarizing the investment proposition by highlighting 3-4 key reasons to invest. Image Opportunity Growth Poten=al Execu=on Offer
  46. 46. Appendix Prepare a slide for every question that an investor might ask and put it in appendix. It is not about less frequently used slides but about building credibility by show ing that you think through everything. Image Opportunity Growth Poten=al Execu=on Offer
  47. 47. Quick Recap Let us do a Validated Opportunity 40-50x Growth Potential Great Execution Capability Exci=ng Investment Offer 1 2 3 4
  48. 48. final things to 2Keep in Mind while making an investor pitch deck
  49. 49. Show Credibility No one hands over their money to someone who is not credible enough. Everything that you say contributes towards your credibility - positively or negatively. Choose your words carefully. 1 Image
  50. 50. any thing else that might brighten up an investor’s eyes would you be able to fascinate the investor - make him feel that there is something fascinating that he has to be involved in. Fascinate Him Investment decisions are hugely influenced by emotions. Make the investor feel that this is something fascinating that he has to be involved in? 1 2 Image
  51. 51. Our InspiraAon Pitch the way VCs think Vinod Khosla How to Design a Pitch Deck Daniel Eckler How Startup Valua=on Works Anna Vital
  52. 52. a presentaEon by: Need some help? DECK ROOSTER (with your next presentaCon) Talk to us www.deckrooster.com Click here
  53. 53. Credits Images Flickr Pexel Stock Snap Visual Hunt Icons Noun Project Flat Icon Icon1, Icon2, Icon3, Icon4 Like it? Share it!

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