Aidi — Pitch decksReturn
For long, there’s been this long-standing debate on what should be / should not be included in a pitch deck. More investors, venture capital and private equity firms have shared what they think should be included in a deck and what each firm specifically looks out for.
There are so many templates on the internet with some showing the exact decks well-known and acclaimed businesses presented to investors when seeking funding. We have examined several blog posts, read many think pieces, spoken to investors and picked out standard features of a well-written pitch deck. But before we get to this, let us discuss what a pitch deck is, how it differs from a business plan, and what should be in your deck.
What is a pitch deck? This can be defined as a visually-appealing presentation put together by founders that gives potential investors or clients an overview of your business. Pitch decks should not be more than 19 slides and should be well designed, easy to read and should clearly highlight the why and how of the business. When it comes to creating one, some founders use ready-made templates and then edit them to suit their styles and preferences.
The question then arises; should one use a template or look at the decks of other companies and then create from scratch? Do investors have a bias toward template-created pitch decks? There is no yes or no response to this question as some argue that using templates helps save time so the founder can actually work more on the art of pitching than on the pitch deck itself. However, an argument for originality implies that since Investors receive a large volume of pitches from different founders and have to repeatedly see the same template from various people, they may become bored and tired and may not spend so much time on your deck. This may make it less easy for you to stand out from the crowd. A solution to the views will be personalization. For the founder who may not have the best design skills and is unable to create an original design, then, templates gotten can be tweaked and really personalized to reflect your tone, voice, style, approach, etc.
Here are some ideas on crafting your pitch deck - ensure that it's in PDF format so it is easier to read (since they are available offline). Also, while it is important to share a presentation that is intriguing, ensure that the content is up to standard. Clearly state the problem and solution you’re offering in simple and compelling language. Do not be evasive- try to be as succinct as can be. Regarding video pitches, founders should look into preferences. This means that before sending a video pitch instead of the usual slide, make some research to ascertain if the investor the pitch will be sent to prefers a video pitch to a written slide. It is recommended that it be accompanied by some text where needed.
Now, what is the difference between a pitch deck and a business plan? For starters, a business plan is a long, well-detailed document that explains everything about the business and is more of words (plain text) while the pitch deck is a 10-20 page document that summarises the plans and is more visual than words. Another difference between the two is in their purpose. A business plan serves as fool-proof research while a pitch deck serves as a summary of the plan. Moreso, a pitch deck is typically used during the introductory phase; mainly to get a meeting with an investor or an introduction that will eventually lead to discussions on funding. However, business plans are usually used during the due diligence phase before a deal is finalized. It is worth noting that both go hand-in-hand and none is of more importance than the other.
So what should be in your pitch deck? Here’s a list of the important elements that should be in a deck
- Problem statement:
If a problem didn’t exist, your startup will definitely not be in existence either. The problem statement slide should outline plainly the issue that exists and the target audience that experiences this issue. Here, your data and statistics should come in handy. Where does this problem exist (because of course, some issues are universal but some differ from region to region, people to people, etc), how many people experience this problem? How does this issue make their lives uncomfortable? When stating this, avoid jargon as much as possible and state the what and why clearly.
Your business exists to solve this problem you have taken notice of. When stating the solution, avoid focusing so much on the technology than on your how. For example, if you are going to solve an issue using AI, it is important to show how you intend to use artificial intelligence as the solution. Do not just say - ‘We are using the latest AI technology to curb unemployment in South Saharan Africa. Instead, explain how this technology is actually helping to solve the problem. Of course, so many startups can use the same technology to solve a problem. The differentiating factor is how you are using this technology in your own unique and different way.
- The market:
A problem may exist and your solution may be the best way to help rectify the issue but it is important to state who your target market is and how big/ large the market is. For this slide, it is recommended that the founder uses a graph that outlines the market growth in the past and its potential for the future. This way, investors can quantify the ROI for their investment. In this slide, you are expected to demonstrate a good understanding of the sector and audience you are building for and why you think there will be a huge return from the market. Numbers are also key in this slide- so do your research, and understand the size of your market.
- The team:
Most investors have highlighted this slide to be of great importance. The slide should show more than just pictures and titles. It should state the expertise of the people you’re building alongside, their work experience, projects they’ve built in the industry or as it relates to their role, what makes them so unique to execute that mission and vision, their professional achievements and why they are a fit for the problem you are solving.
In this slide, your duty is to show the steady growth of the business over time. This can include the month-on-month growth of revenue, signups, conversion etc. This should prove that your idea isn’t static; that you’re either making some money from it already or people are using your product/ service.
Most financial slides show 3 years of projection. The projection should state where the business is heading and possible outcomes. The slide should contain key revenue assumptions, expenses that will be needed to support revenue and your profit margin. It also includes an income statement, cash flow statement and balance sheet. The purpose of this slide is to help investors understand how strong the growth of the company is and the duration of your runway. It is advised that for early-stage founders, this slide can be left out as the traction slide will suffice. However, on demand by your investor be sure to include all the necessary information for this slide.
It is unlikely that your startup is the only one solving a particular problem for a certain market. The essence of this slide is to show distinctively, the uniqueness of your solution and how it differs from already existing ones. Some founders make the mistake of just using a table to show features that their product has that others do not, but fail to explain why their product features differ/ its importance and how this can provide a layer of solution that competitors do not. This slide should be compelling and clearly show your unique value proposition.
Remember the key is to keep your pitch deck simple and compelling. Ensure that you use simple words and update your deck from time to time to reflect progress and growth over time.