A good pitch involves continuous development and improvement. While complex, with several details to take into account, over time a pitch can be improved and perfected. That said, when done properly, it is an extraordinary tool, capable of capturing the genuine interest of an investor or potential customer.
Although there is an “art” to it, practice definitely makes perfect and committing to it will significantly improve the performance of your pitch. By following these tips or, if you will, best practices, you too can learn how to create a successful investor pitch deck:
- Know your investor: This is one of the most important tips and that’s why it’s listed first. Make an effort to learn about your potential investor, their approach to investment and the sectors they specialise in, and tailor your pitch to them so they identify with it. Not all investors are the right fit for each startup, especially those focusing on more specific or niche markets. So, to choose wisely, you’ll need to gather as much information as you can about the investor, and if possible, land your first meeting through a referral!
- Read the room: The goal of your first pitch is to convince an investor to have a longer meeting with you. It should never be to “bombard” them with information about your business or product, or you risk not even getting your foot in the door.
- Create the deck: Keep your deck short and simple and include numbers and charts, big numbers and charts! Don’t forget that you’re the one who must “sell it”, not the presentation; it’s simply a visual aid.
- Tell a story: The problem and the solution must always be presented as a “story”. Creating momentum is important, as it will get investors on the edge of their seats during the pitch. Present the problem as something concerning and try to associate it with the investor’s daily life. Try and make the investor see the problem as one that they or someone they know has. It’s also important to remember that the solution must be explained simply and complementary to the problem, even if the audience is an “expert”. Making an investor have that “light-bulb moment” makes this step all the more illuminating.
- Business plan and financials: Knowing the numbers is crucial, as it demonstrates confidence and market knowledge. Knowing the size of the market, the competition’s turnover, what it takes to get your solution in the market, among other things, is key information that must be included. In short, have clear and succinct insight into the business when it comes to the numbers.
- Marketing & sales plan: This one goes hand in hand with tip #5. It’s essential to know how, when and who you’ll be selling the solution to. Explain each step and what is needed to get your solution in the various target markets or countries. A well-defined and realistic plan is key to showing investors you know what you are talking about and avoid “tough” questions.
- Know your competition: This is not a cliché. It’s important to know who your competitors are, the products they have on the market, their customers, sales, the countries they operate in and their business models. It’s important not only to show that your solution is different (preferably for the better!), but that the plan is a solid one. Adding a chart showing the company in the upper right hand corner without any context is not enough. You have to use facts and data to prove you have a competitive advantage. You also need to discern whether the competitive advantage is technological (and sustainable) or temporal. It can be either, but it’s important to know which one it is, because the investor is definitely going to want to know.
- Business model: Basically, “How are you going to market your solution?” Explain the process, prices, target customers, segments or value chain. If it’s also a novel business model, explain why the business model needs improving and how it’s going to help you successfully market the solution.Investors are a sceptical bunch when it comes to changes in business models, so make sure you clearly and simply explain your new model.
- The team: Also not a cliché. The team is vital and is one of the key points investors look at, especially in the embryonic stages of a business. Investors invest in people; after all, a good team always finds a solution. So it’s important to talk about the team, their experience, technical background and each of their roles in the company.
- Traction: Results. Talk about results, any results achieved so far. Whether it’s your first customers, number of users, partnerships, certifications, awards, whatever. Anything and everything to show traction and your business’s success to date. This provides additional reassurance for investors if they are interested at this stage of the pitch.
- Funding needs: Understand and explain your current and future funding needs. Investors are going to want to know where their money is going and how it’s going to help the business. If future rounds are likely, provide a timeline for these rounds, milestones, metrics and KPIs to be achieved to move on to each of those rounds future rounds. This will show confidence, ownership and control over the future of the business.
- Exit strategy: Never forget that investors will eventually divest, selling their share with a certain exit multiple. Related to tip #1, it’s important to know your investor, their investment cycles, LPs and the ROI the investor is after. Knowing who the potential buyers are, in a possible acquisition, or what is needed until an IPO and aligning it with what the investor is looking for goes a long way towards assessing the potential investment. Don’t forget to answer “When?”. When do you expect an exit and, once again, how it fits into the investor’s approach to investment.
- Next steps and follow-up: Since your goal is to get that second meeting, it’s important to determine the next steps and follow up. By doing so, not only will you be providing investors with all the information they need to contact you in the future, it also shows that you are organised and professional; the qualities they are looking for in the companies in which they invest. You’ll also need to have your pitch and business plan ready to be shared, possibly in a data room.
- Confident, but respectful: It is vital that you show confidence and certainty in what you are presenting and explaining. Investors read body language to determine the speaker’s level of confidence and certainty. However, it is very important to show respect. Because we know the market, problem or solution very well, we might think we know more than the investor and risk being a little less cordial. It’s important to know how to manage the presentation, especially with more “aggressive” investors, using evasive strategies to avoid direct confrontation.
- Get feedback, improve the deck, and practise, practise, practise: Last, but by no means least, get feedback about the pitch straight away so that you can tweak the message, deck or any other supporting document. This will help you improve the message and make it more consistent, so that all investors understand what you are trying to get across. Then… practise, practise, practise. When you think both the pitch and message are perfect, practise even more. Film the presentation, ask team members or family to watch the pitch and give feedback. This will help you not only improve the message, but mainly ensure you know the deck and exactly what to say for each slide. Timing is also important. We don’t always get 10 minutes for a pitch so it’s important to know what needs to be said for each slide, taking into account total time available.
Extra tip! Don’t forget that the first investor pitch will, most likely, be to an investment analyst. The analyst’s job is to put together all information gathered about the business and to present it to the team to determine the next steps. I’ve used the word “confidence” repeatedly and it wasn’t by accident! Demonstrating confidence to an investor is essential. To this end, help prepare the information, making yourself available after the pitch to provide all the documents and information the analyst needs. This way the analyst will feel more confident and certain about presenting your case, and will be ready to answer questions that the team will certainly ask.
The ultimate goal is, of course, to get the investment. However, it’s a sprint, not a marathon. You’ll hear a lot of “no’s” before finally hearing that first “yes”. Learn from the “no’s” to improve the deck and pitch as a whole. It’s also important to know how to manage this process from a personal perspective, after all, it’s a person on the other side of the table, who also has goals and targets to achieve. The closer we can get to that person and help them achieve their goals, the more likely we’ll succeed. At the end of the day, deals are made between people, and an investment round is one of many deals you’re going to make for your company!