Life Area: Professional
Topic: The Only 8 Slides Your Pitch Deck Needs
The Only 8 Slides Your Pitch Deck Needs
When I first meet with startup entrepreneurs, the most often asked question is some form of “How do we raise capital?”
It’s very wise of them to ask because in the end if you’re not well capitalized, you won’t last. Yet rarely do they know the steps to raising capital, let alone how to apply them. I tell them, VCs and other investors are investing in you as a person as much as they are investing in your company product or service. So, I tell them “be authentic”, “be open book”, “be vulnerable”. Let them get to know you and trust you. They need to do that long before they see your proforma, rate of return, or sales projections.
Often the first impression to such an audience is your presentation or “pitch deck”. The reason I want to talk about pitch decks is simple: I see too many that are simply not good. What should be a short, powerful presentation to pique investor interest too frequently falls way short. Nothing I’m about to tell you about how to build the perfect pitch deck amounts to magic. It’s just simple fundamentals. So here’s how to do a pitch deck right, slide by simple slide:
Slide 1: Present your statement of purpose.
When I talk with a young entrepreneur, I always start by asking, “What’s your big idea?” What I’m looking for is a statement about who they are and what they do in a sentence so elemental and polished that the listeners “get it”. This statement is worth spending some time on, because it might just be the most important dozen words you ever write. It also needs to be a living statement that evolves and grows with your business, your market, and dependent on what matters to your investors. And … remember this, the first slide sets the tone, and you either grab them or lose them with this one.
Slide 2: Introduce your team.
Now, introduce them to you and your team. Let them get to know your team members’ professional backgrounds, why you’re each well-suited for the business, and how you all work together synergistically with complementary skill sets. And what are investors looking for in your team? Three things, really: that they’ve done it before, that they’re the best at what they do, and that they’re incredibly confident. Bring as many team members as you think helps your cause and show off the veritable tour de force of talent that’s going to give the room absolute confidence you can pull off everything you’re about to lay out.
Slide 3: Identify the problem.
If you’re pursuing the kind of big idea that matters to venture capitalists, you need to comprehensively and vividly identify the fundamental problem you’re solving. This accomplishes a couple of things. One, it demonstrates that you understand current market pressures and the macro trends that drive them. Second, it forces you to train a spotlight on what you’re aiming to tackle by ensuring it’s an actual problem in the world. If you can describe the problem better than your audience, chances are they will assume you have the solution.
Slide 4: Present your solution.
Your fourth slide should cover how you plan to solve the previously stated problem. It’s a simple rundown of your value propositions, illustrating how you plan to address the crucial societal need you already identified faster, more effectively, and more affordably than ever before.
Investors are looking for three things of your team: that they’ve done it before, that they’re the best at what they do, and that they’re incredibly confident.
Slide 5: Answer “Why now?”
Investors are like rock climbers looking for a foothold. Ideally, it comes in the form of a A-ha! moment that happens when a solution meets a societal need ie: the mass-market automobile or a streaming music service. The “Why now?” slide needs to focus on what’s going on in your industry and in society at large that makes the timing of your business so perfect. This is where you get to stand on your soapbox and give a primer on all the things you know about the intricacies of your business, and how they match up with the dynamics of the market. You should also touch on the competition: why nobody’s doing this, how the people who are doing it aren’t very good at it, and why you’re uniquely poised to capture market share. Feel free to be a great big, annoying know-it-all here. It’s expected.
Slide 6: Explain how this will work.
This sounds pretty open-ended, but it’s really just a short and simple explanation of your revenue model. Basically, how do you plan to make money? If you’re running a digital content company, slide number 6 might sound something like this: “Our business works because we buy premium domain names, add unique content created by our world-class team, and capture consumer’s email addresses with a dynamite lead magnet for a market targeted for our products.”
Slide 7: Spell out how your business will perform for the next five years.
Perhaps not surprisingly, you’re going to finish with two financial slides. This first one should map out the expected results of the business as told by the five narratives that matter: units sold, revenue, cost, yield, and customer acquisition cost over time. Obviously, there’s an art to presenting all of this information in a way that shows your business as the most compelling money-making creation in recent history. I’ll give a much more detailed rundown of this slide in a future column, but for now just prepare a simple line chart for the above information and know that slide number 7 is a mere steppingstone to something much more critical … slide 8.
Slide: 8: Show your investors how they’ll 10x.
You’ve covered the problem, walked through your solution, your team, your timing, your revenue model–now it’s time for the dramatic climax: how your prospective investors will make an excellent return. It is all any investor will really care about–from a tiny, early-stage VC to a late-round institutional partner looking to fund you for the long term. So explain how it’s going to happen for them–and don’t be shy. Describe the cavernously huge addressable market you’re tapping into. Demonstrate how you and your team plan to mine it to its core, and spell out how this will bring all involved the most insanely profitable investment of their careers. Give them all the angles (IRR, Cash-on-cash, etc) because you don’t know which one is their favored metric.
If you can pull off all of the above in just eight slides, the folks across the table will thank you for your brevity and open a Q&A that leads to an open and authentic discussion — and hopefully, end with them wanting to collaborate with you on further due diligence and a successful close.
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