Convince in just a few minutes: Because investors don’t have time to dig through your business plan, you have to inspire them concisely. A pitch deck is perfect for this. With it, you present all important information in a short time.
If your pitch deck is convincing, it’s your ticket to another contact. If you don’t have a pitch deck and want to submit a direct submission instead, you’ll often get blocked concerning the pitch deck submission.
What is an optimal pitch deck?
A pitch deck is slid for a pitch, i.e. a presentation of your business idea to investors. However, the pitch deck increasingly has to speak for itself independently of a presentation and serves as an important first source of information for investors. In this article, I am therefore primarily talking about the pitch deck, which is submitted in writing.
The pitch deck must present your company quickly but convincingly. It’s not about revealing all the numbers and betraying the smallest details of the business model. Instead, it should give investors the best possible impression of why they should invest in your company. An investor needs the most important framework data to decide whether he will continue to deal with your idea and the most important data.
For this purpose, the pitch deck consists of ten to 15 slides. It is not easy to describe the lifeblood company so briefly, because you have to provide all the information that arouses the investor’s interest. This includes your idea, your business model, and proof that it is viable. Doing that in just 15 slides is no easy feat. This is all the more true because your slides should never be overloaded.
A pitch deck is like your elevator pitch in writing. You should use this as a guide when creating it. It’s not about giving the investor all the information they need for investment. Instead, his curiosity about the business plan must be aroused because your business idea and the first figures are convincing.
What is the goal of an optimal pitch deck?
With the pitch deck, you convince the investor in a short time frame that your business idea is viable. Pitch decks are now used in a comparatively standardized way so that the investor can get an impression of whether your company is of any interest to him in just a few minutes. With the Pitch Deck, you can not only present your idea but also prove that you and your founding team have the competence and entrepreneurial skills to successfully realize this business idea.
You should also be aware of another view of the pitch deck: A pitch deck presents your offer to the investor. You should therefore also include marketing: What information does the investor need to make an investment decision? How can you convince him? So you have to look at the pitch deck from the customer’s point of view. On the other hand, you can present it with confidence because you’re making an offer to the investor, not the other way around.
What goes in an optimal pitch deck? The twelve most important slides
Investors have to sift through dozens of pitches before they find a company that interests them. Most important success factor: The first pitch is as short as possible but as meaningful as necessary. When an investor sees 30 or more presentation slides waiting to be reviewed, they’ll immediately become more impatient.
I, therefore, recommend that you use the following slide structure as a guide:
First slide: title slide with opener/slogan
Ideally, a pitch deck begins with an opener that arouses the interest of the listeners or readers. It should enable him to classify what the business idea is all about. This could be your company slogan, for example.
Many advise first referring to other business models to enable a direct classification through the parallels. For example “Start-Up-Name: Tinder for the freelancer search”.
However, there are disadvantages: If the investor does not know Tinder, he will not know what you are getting at. And if he doesn’t like Tinder, he’ll think your idea isn’t a good one from the start. It is also possible that you have a viable business model, but you set the bar too high with this comparison and your idea then seems worse than it is. Imagine if Airbnb had used “Like Couchsurfing – but monetized” as their tagline. There are certainly ways better than these comparisons.
However, it is unquestionably successful to present a meaningful slogan on the title slide. Examples of well-known pitch decks include:
- „Book rooms with locals, rather than hotels” von Airbnb
- “Your network is bigger than you think” von LinkedIn
- “The flirting game” von Tinder
- “The best way to move money” by dwolla
They all used strong, confident claims that don’t compare themselves, but stood for themselves and present their company as the best solution. Nevertheless, they allow an assessment of where the journey is going and in which industry the company is active.
Problem
It has proven useful to clarify the problem that your start-up wants to solve directly in the second slide. Airbnb has done an excellent job of solving this in its pitch deck:
Airbnb makes it clear here directly why it will offer added value and why. Starting with the problem makes psychological sense: You make the investor curious about your solution. This is also because the classic hero’s journey also begins like this: First, the narrator introduces the hero (company), then he encounters a problem. Many pitch decks, therefore, work with case studies. For example, Tinder introduced the shy Matt, who is afraid of rejection.
You do storytelling and not only capture the attention of your listeners and readers but also ensure that your business model is remembered. The order, therefore, makes sense.
But even if you decide on a different sequence: This slide must always be included in your pitch deck. If your investor has to figure out what problems your products solve, you probably won’t get together.
Solution
Airbnb did an excellent job with this slide as well. She highlights three key benefits of Airbnb’s problem-solving approach: saving money for travelers, making money for hosts, and sharing culture by allowing travelers to travel cities differently through local hosts. Airbnb manages to present the product as if everyone benefits from it. And not only financially, but also culturally:
The combination of monetary advantages convinces purely financially oriented investors, while cultural exchange convinces investors who make their decisions based on values. Airbnb makes it clear that they are and want to be more than just a financial benefit.
I would ask you to also look at the slide in terms of graphic design: the advantages are immediately apparent because of the color and size – more than the product that Airbnb offers. An investor sees the problem first, then the solution, and then how Airbnb enables that solution.
Airbnb’s pitch deck allows the entire business idea to be known within a minute. The investor can later consider whether the hard facts behind this idea can stand – but he already knows exactly what is at stake.
Market potential
Now you have to back up with numbers that your business idea could be worthwhile for the investor. To do this, you must at least briefly present why you are hoping for market potential and which numbers support this hope.
For example, Airbnb listed the number of Couchsurfing users here and added the number of accommodation offers advertised on Craigslist per week. It also shows the overall market and Airbnb’s potential share on another slide. LinkedIn used Google AdWords, LexisNexis, and Yellow Pages as a benchmark.
When it comes to your market potential figures, it is important that you work with reliable and meaningful data. If you have a business plan, you can use the numbers from it. You don’t have to provide a comprehensive picture of your market. When in doubt, it is worth presenting a few convincing statistics instead of arguing comprehensively. First of all, it’s just a matter of teasing that the business model can be successful. Everything else is in the business plan, which the investor can request if he is convinced of your pitch. Above all, the numbers you provide here must arouse curiosity and be plausible.
Business model
A good solution, even with sufficient market potential, is of little use if you are not able to monetize your product accordingly. On this slide, you can demonstrate why you think your business idea can be profitable.
Tinder proves that you don’t always have to know how to earn money later.
In the pitch deck, the company first talked about charging a dollar for each match, selling virtual gifts, or charging money for an earlier appearance on the list. A few years later, like most dating platforms, the service relies on subscription models. This shows that your pitch deck is not legally binding information about your business idea.
It’s about showing that you’ve thought about it and that you know how you want to make money: Airbnb already talked about charging a commission on the placements in the pitch deck. Other startups present their freemium model or clearly state what price they want to charge for their product.
Another important piece of information for investors is the scalability of your model. Are you dependent on manpower? Can you already serve international markets? Are there up- or cross-sells or other value chains?
Here, too, you should argue honestly with the data that you have determined for your business plan. Investors can often assess directly whether the prices are completely out of thin air or realistic.
Proof of concept
If you’re already in the market and need money to expand, you probably already have the data to convince investors. Here you can argue with various key figures and soft facts. For example, some companies use customer testimonials to underpin their success, others their growth rate or initial sales. If you already have solid sources of income, it definitely needs to be on this slide.
For more complex products in the initial phase, however, it is worth presenting a proof of concept. Market research can also support your project, but is often only of limited significance and, above all, is usually not a sufficient argument for investors. However, convincingly presenting the market potential or even arguing with the actual market size is almost essential to put the financing needs in the right perspective.
The breakeven point is also convincing for most venture capitalists. You should be able to indicate under what circumstances you can reach them. Oftentimes, you even have to wait until that point before you start your investor-drive efforts. Because numerous financiers only invest if your company has already passed this milestone.
It is therefore particularly important to the feasibility slide you update it regularly. It’s one of your most important arguments, and any progress should therefore be obvious to investors. Each additional customer can lead to an investor deciding to support you.
Also, if you’ve developed a roadmap, this is a good time to present it. This makes it immediately clear to the investor how far away you are from being ready for the market when you had your first 1,000 subscribers, or what goals you are actually working towards. A medium-term period that does not exceed seven years is relevant. You do not have to disclose sensitive data.
Product presentation with USPs
Even if you have already presented the problem and solution, some additional information about your product is usually still necessary. They help set you apart from the competition and show more clearly why your product can be the solution.
Here you should argue with unique selling points. What makes your solution so good? What features do you offer that others don’t? At this point, you can present your product more clearly and finally convince investors with your wealth of ideas.
Competitors and market orientation
No pitch deck is complete without introducing your competitors. If you can’t name any competitors, investors will assume you haven’t done enough research or are misrepresenting them. Even completely new business ideas represent an improvement of existing products, so that competition exists. Now, who has the customers you want? Which competitor is opening up a future market together with you?
The investor gets a good overview of the competitive environment and their target group at a glance. He also sees the target market and the underlying technology directly. With such representations, you can prove that you know the market well, that you are not hiding any competition, and that you want to position yourself clearly in the market. In addition, an investor can use any previous knowledge more easily because he already knows your competition. Or you make his research easier.
Team introduction
For the investor, it is not only important that the idea is good. It is also important that he can believe in the founding team that will bring this idea to life. That’s why you should present your team on a slide and show the qualities and competencies that they can bring to the success of the product.
As always, photos of real people help build trust. So don’t be shy and introduce the most important team members with a photo. At the same time, you shouldn’t allow yourself false vanity and leave out important employees: every founder needs people they can rely on and from whose knowledge they benefit. A team with different competencies makes you more credible. Of course, the combination of industry experience, commercial experience, and marketing is ideal.
Capital requirements and previous financing
An investor wants to know whether he can get involved alone or whether he has to agree with many other investors. Therefore, an overview of previous financing rounds, if available, belongs in every pitch deck.
Financing needs are a little more controversial. This specification is more of a “can” than a “must”. The business plan is much more meaningful in this regard. An example from Square’s pitch deck shows that it can be done better. The company hasn’t limited itself to just showing its capital requirements. Instead, it has exposed arguments about why it makes sense to invest now.
The last slide
The last slide is almost more important than the first. Here you should not only provide your contact details (with the contact person) and thank you for your attention, but also ask your listeners or readers to take a specific action. For example, ask them to ask about your business plan or get in touch with you. In addition, it often makes sense to formulate this CTA with a specific deadline. Find out which investment share is already covered, how many investors your company is looking for, and on which day you want to decide who will be shortlisted. Turn the investors into applicants instead of taking this position yourself.
How do I design an optimal pitch deck? Ten tips for technology and design
There are a lot of things that can go wrong when designing a pitch deck. If you have a designer on hand, there’s no harm in letting them do the designing. Presentation templates can often not be optimally adapted to individual purposes for the unskilled.
The objective, of course, is that readers should grasp any information as quickly as possible. Therefore:
1. Brevity: You should never overload your slides with information.
2. Clarity: Even if you can’t use a lot of text on the pitch deck, you should make sure that the information included is understandable and clear.
3. Simplicity: Especially when your product is complex, you have to formulate solutions as simple as possible. Consider your target group and, if necessary, create two slides that require different prior knowledge.
4. Corporate design: Make sure that your pitch deck matches your company visually and thus increases recognition.
5. Contrasts: A high contrast between the background and the font color makes it easier to read on a laptop or smartphone. In lectures, you compensate for poor lighting conditions.
6. Large font size: Even if you don’t throw your pitch deck against the wall, many investors look at pitch decks on the go. A sufficiently large font size (min. 24 pt) helps them to understand your business idea on mobile devices. Plus point: You can then not put too many facts on one slide. In particular, make sure that the font in diagrams and graphics is not too small.
7. Showing instead of describing: Pictures stay in the head more than language. Therefore, try to use pictures and graphics instead of arguing verbally.
8. Everything in one file: It is best if you can submit your pitch deck as a PDF. Any investor can easily open this format. Even if Apple products are widely used, you should rely on PDFs. Avoid videos or links in the pitch deck so that your file arrives safely and is complete. If it has to be a link, make it clickable with a hyperlink shortcut.
9. Name the file: Name your file meaningfully with your business name, not the recipients.
10. Proofreading: You’re courting millions and have tons of spelling mistakes in your pitch deck. If you come across as unprofessional, you won’t convince anyone. Therefore, have your pitch deck edited and pay attention to deviations in the design. Work with styles and templates to reduce sources of error.
How important is it to stand out from the crowd?
Standing out is important, no question. But when in doubt, it is more important that you do your job properly and present yourself as a good communicator and reliable business partner. It is therefore not only necessary that you stand out, but above all that you make it clear what you stand for and what your business model is.
You have to master the basics first before you think about freestyle. If you word it improperly or don’t present the right data, you won’t convince anyone. You have to put yourself in the recipient’s shoes and think about what facts they need and how they can understand your company. Only when you’ve done that should you set yourself apart from the crowd with more creativity.
Basically, however, the following also applies: You don’t have to reinvent the pitch deck. Every venture can succeed or fail your pitch. An example of this is Farmeron ‘s pitch deck. It has 20 slides in total—too many by today’s standards. As a busy investor, I would have discarded the pitch deck right away. In fact, six slides serve the purpose of illustrating how much time elapses for farmers to enter data. You can like the idea – or not.
Success factor pitch deck: The elevator pitch in your investor’s email inbox
With the pitch deck, you can convince investors in the most succinct way that they want more information from you – no more, but also no less. For the deck to be your ticket to the investor’s presentation room, you have to generate excitement in a short amount of time. If you follow our tips and design the twelve slides convincingly, you’ll be close to the perfect deck.