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.
5. Investor
is to persuade the
investor to invest in
your business.
The Purpose
of Your Pitch Deck
Image
6. So let us start by
answering this question:
What does an investor
really want?
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. $4M
Angel : 20%Founders: 80%
Company Valua=on: $5M
$1M
But, for his share
to grow 10x...
Angel : 20%
$1M
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
’
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. 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. 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. 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. 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. Show Customer Valida7on
Show that there are real users out there using and
loving the solution.
Step 6
Opportunity
Image
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. 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. 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. 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. 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. 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. 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. 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. 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. 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
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
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. 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. 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. 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. Quick Recap
Let us do a
Validated
Opportunity
40-50x
Growth
Potential
Great
Execution
Capability
Exci=ng
Investment
Offer
1 2 3 4
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. 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. 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. a presentaEon by:
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www.deckrooster.com
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