06 Sep #Founders – creating your perfect #investor #deck
If you’ve ever searched the internet for guidance on building your investor deck, you’ll most likely have been overwhelmed by the amount of (often conflicting) information available to you. It can be difficult to know how to formulate your presentation and what level of detail is needed, as there are many ways of providing an overview of your business plan.
In this article, I focus on the investor deck to use when pitching for investment during your first-stage investor meeting (rather than a longer, more detailed presentation, to use as a stand-alone document). I provide a best practice template to maximise your chances of proceeding to second-stage meetings.
You can also find out more information on raising investment here, including; how to get your foot in the door, how to perform due diligence on potential investors, understanding their incentives and an overview of the fundraising process.
There are two key ingredients to build the perfect deck.
The first is content; what to include and what not to include. As a minimum, twelve slides are required and you should try to limit each one to expressing one idea. You do not need to cover everything in your deck as you can provide additional information during the presentation. It should be no more than 15 slides long.
The second is design; namely, the style, format and use of images. One of the best ways to ensure an investor grasps the fundamental messages in your presentation is through the use of images and infographics. These can include stock photos, graphs or venn diagrams, all of which add credibility and create a more engaging read. Use a consistent font, size and colour throughout; it’s the first feel investors get of your company, so make it count.
Investors receive thousands of decks a year and a great design will make it stand out.
Although there are a wide variety of cloud based solutions to host your presentation, track click throughs, and create dynamic transitions, my advice would be to convert your deck into pdf. This reduces the risk of download issues for investors and means that they can easily forward it to their colleagues.
Best practice template
1) Cover slide
The cover slide should include your company name, logo, tagline and a high resolution visual that reflects what your business does. It should also include your website URL, social media handles and your contact details (email and mobile number).
Avoid putting a date as this quickly gets old.
2) Summary and Mission
This slide should catch the investors’ attention and be a series of key facts, describing what you’re doing in a way that someone from outside your industry can understand, and the vision for the business. Don’t be tempted to include business jargon or acronyms.
Think of it as your 10-second elevator pitch, or your 280-character tweet.
Summarise the pain point that your startup is solving. Highlight the problem by painting a picture of the world without your product. Make the problem relatable.
What can your consumers not do without?
If you are aiming your solution at a particular demographic, you could explain the pain point using a customer persona.
4) Solution and Opportunity
Describe your solution and how it is addressing the pain point that you’ve articulated. Present a picture of a future where the pain point no longer exists. Be specific on the solution to the customer. Outline the benefits of your solution, rather than the features, and highlight how it will change the status quo.
5) Technology or product
Outline your product or technology. If you’ve built a software solution, you can do this by adding in a screenshot or diagram explaining the process. Link this slide with the earlier solution slide.
Make sure you have the ability to demo your product if the investor asks for one during your presentation.
Highlight the size of the market and potential size of the opportunity using a combination of top down and bottom up market sizing. This will determine the potential upside for the investor. Often, success in an industry is linked to timing, so make sure you make it clear why the opportunity is relevant now.
Top-down Outline the total addressable market (i.e. total yearly spend in your industry) and drill down into which areas of that market you’ll be targeting, using a set of realistic and back-able assumptions.
Bottom-up Extrapolate on your existing success to quantify your target market; this should be a figure that you think is achievable with appropriate funding.
Identify a value, preferably bigger than £500m to allow the opportunity for sufficient investor returns, that fits both approaches. You could also include the expected (increased) size of the market five years from now, the typical minimum return cycle for investors.
Investors are also investing in you, not only your business. Explain how your core team and advisors (if significant), with a corresponding title and photo, make you the best bet in town by highlighting their background and domain expertise. Focus on a significant and relevant accomplishment for each person in your team.
Identify any key positions you are yet to fill.
8) Competition and competitive advantages
Every business has competition and this in itself is not a weakness; rather it shows that there is market demand for your product. Therefore it’s important to acknowledge and name them, highlighting their strengths and weaknesses, and explaining how your competitive advantage puts you in a dominant position. If you don’t consider your competitors, your understanding of the market will be questioned.
If you have intellectual property rights, highlight these and explain briefly the steps you have taken to protect them. It’s important to take legal advice to ensure you have the protection you want and that you understand the limitations of protecting IP.
Showcase your best metric and most significant achievements or milestones, and list any significant customers and partners (after receiving their permission) using logos and testimonials of the most well-known companies (or celebrities if you have a consumer solution) to bring them to life.
If you have been profiled in the press, include the links and quotes from the articles.
Don’t be tempted to make false statements as these will come around to bite you.
10) Marketing plan
Highlight your strategy for customer acquisition, and the key marketing channels you will use to get your product in front of your audience.
Show that the levels of marketing and customer acquisitions required to scale the business can only be reached with the right level of funding.
11) Business Model and Financials
Describe the business model; how you make money, how you price the product and how you plan to acquire and serve your customers. Give details on key financial information and metrics, both from your past performance and projections (e.g. revenue metrics, burn rate and break even point).
Ensure all assumptions are supported and that your financial details stack up. After understanding your product or service, investors will tend to focus primarily on your financials. If you have a track record of 24 months or more, consider showing the financials on a separate slide.
This is a slide you may want to update depending on the type of investor you are meeting.
At the very least, you should describe your funding history, how much you’re looking to raise and what you are going to do with the money. Summarise your acquisition channels or potential exit strategy (if you have one).
Add a soundbite at the end of the presentation so that investors have something to remember you by and ensure you leave them with a clear call to action. It could be to contact you, visit your website or to try your product/service.
Test your investor deck on friends and family, especially those who have no knowledge of the industry (although by now I expect all your friends and family are so tired of hearing you talk about your business, they should be able to pitch it just as well as you, so consider finding some strangers to practise on).
I would not advise presenting until you’re comfortable with the design of your deck and you have incorporated, as a minimum, all of these sections.
Most of the advice also applies to building your sales deck, but slides 10, 11 and 12 would not be relevant and you will want to provide further details on the product, the key benefits to the user and a clear slide on how to get started with your product or service.
There are pitch deck design templates available to you and you can also browse investor decks used by some of the most successful venture-backed tech companies including from Uber, AirBnB and Linkedin, to get an idea of how others have done it before, but don’t get too hung up on the different structures used.
For additional support, use your board members’ investment experience or find an advisor. Find out here how PwC can help you on your fundraising journey.
I’d be really happy to hear from you if you have any comments on this article, if you have any queries about fundraising, or if you’d just like a chat! You can reach me via firstname.lastname@example.org or on twitter @jhj_hollis
Jonathan is co-founder of two new propositions at PwC; he is responsible for developing the Raise Series A programme which supports a cohort of technology companies looking to raise their first round of institutional funding, and for growing the Scale proposition in London and across the U.K., which has now worked with over 150 SaaS businesses. Having set up his own company whilst studying Economics at the University of Cambridge, he subsequently qualified as a chartered accountant with PwC, before moving to his current role. He currently manages PwC’s entrepreneurs’ network and runs Tech London Advocate’s SaaS Working Group.