This is an excerpt from John Biggs and Eric Villines’ book, Get Funded!.
There are a number of theories and best practices on how to build the perfect PowerPoint presentation, but these are usually focused on business meetings with colleagues or potential customers and partners. These presentations may require more slides, more graphs, and more information. But when you are asking someone for money, the biggest mistake would be to throw a giant haystack at them. Your job is to hand-deliver the needle.
If an investor chat is like a date, then the deck is your Tinder profile. It sets the stage for what is to come and becomes a road map for the interaction.
A few years ago, marketing guru and venture capitalist Guy Kawasaki wrote about his 10/20/30 Rule of PowerPoint, which states that a presentation should contain no more than 10 slides, last no more than 20 minutes, and contain font no smaller than 30 point. Although he wrote this rule back in 2005, his advice about being short and concise should be something you take to heart whenever building a PowerPoint presentation.
We encourage you to have your investor deck professionally designed. What does this mean? It means a designer should create a visually pleasing template using specific fonts and images. Decks with lots of pictures stand out in a sea of grey text, and decks that are arrestingly readable are far superior to decks that look like you used the default formatting found in PowerPoint or Keynote.
Find designers online at Fiverr and other art services. Expect to pay a few hundred dollars; more if it’s a longer, appendix-laden document. Don’t go crazy, though. Chances are your global design will evolve over time, even your business name and logo may change.
“I’ve seen people raise $250,000, and give $100,000 or $150,000 to a Web developer, and give another $100,000 to a designer, and $50,000 to a PR person, and then they come back for more money,” said Jason Calacanis, an angel investor. He warns against wasting too much money on design.
Ultimately, a presentation is less a script and more a guide to how you will structure the conversation. This of course assumes the meeting flows in a linear fashion. More than likely, it won’t. You should expect questions, interjections, and possibly not having enough time to get through all your slides. This is why it’s imperative that you front-load your presentation with the most important information.
Let’s Get Started
A winning pitch deck proves three key factors in every meeting.
|Market Opportunity||Your Solution||Their Opportunity|
|Make them believe in the opportunity.||Make them believe you (and your team) can win.||Make them believe they can win investing in you.|
Open a blank PowerPoint document. Don’t worry about design at this stage. Just create the slides and add the titles below. These are just placeholders to remind you of the purpose of each slide.
1. Title Page
2. The Problem
3. The Solution
4. The Product
5. The Revenue Model
6. The Challenges
7. The Team
8. The Financials (and The Ask)
9. The Opportunity
10.The Road map
Create the Content
Using our fictitious healthcare technology company GotoDoc as an example, we will demonstrate how to fill in the content for each slide in your presentation.
Slide 1: Title Page
The simplest slide you will ever create. Add your company name (and logo), your name, and your contact information. (We like to add a cool photo on the first page if we’re doing a public pitch, but investor pitches can be far less flashy.) That’s it. Only nine slides to go!
Slide 2: The Problem
Often referred to as “setting the stage,” this is arguably the single most important section of your presentation. Whether you are looking for people to crowdfund your food truck or a VC to invest in your healthcare app, if you fail to make them believe in the problem, then you will never get them to invest in the opportunity.
Using both facts and relevant anecdotes, you must answer these two key questions:
- Pain Points: Your goal here is to get the investor to quickly agree to a simple, factual narrative. For example: Using our GoToDoc example, we will address how the national physician shortfall will make it harder for aging Americans to access basic, non-emergency medical services. This is very simple to understand.
- Market Opportunity: You got them to agree to the problem, but do these issues impact enough people or businesses to create a real opportunity (to make money)? Use facts and figures that quickly illustrate the size of the market you are going after. This is where you begin to create FOMA (“Fear Of Missing Out”).
Note: If you have a meeting with an investor, you should assume they have done some basic due diligence about your space. Use your time wisely, and make sure every fact you place on this slide is there ONLY to set up your specific solution.
Slide 3: Your Solution
Using simple language, state your company mission and then briefly describe how you will accomplish it. Keep in mind that you are not writing a script here. You will have different talking points for each slide. Keep this slide simple and use it primarily as an introduction to the next slide: The Demo.
Slide 4: The Product
This section of the presentation will depend on your company or product offering. If you have a taco truck, you might have photographs of the truck, copies of your menu, and actually bring food. If you have a new invention, you should consider sharing 3D renderings or unveiling a physical sample or prototype during the meeting. The key here isn’t to overwhelm them, but to leave them wanting (and asking for) more. You also still have six more slides to go and you don’t want to use up all of your time.
Since we haven’t yet finalized the GoToDoc mobile app, we will share some mockups of how the interface will look. We aren’t showing everything – just screenshots that bring to life the most powerful aspects of the app.
Slide 5: The Revenue Model
This slide answers two simple questions: How will you make money? And how much money have you made thus far? This slide should explain how you make money better than your competitors do and what your “secret sauce” is in terms of building the business. If yours is a more traditional business, a simple outline of your current and expected revenues should be sufficient.
Some founders like to add information regarding their current investment and valuation but don’t be too hasty in sharing these numbers. Many investors will want to set their own terms for early rounds. Create a deck that you can easily modify or create a version with your current valuation and without.
Slide 6: Challenges
Let’s be honest. If it’s obvious enough to you that this opportunity exists, then it’s perhaps obvious to others. So why isn’t this opportunity being addressed? Why are others failing?
Going back to your SWOT analysis, it’s time to be “strategically transparent.” We say strategically because this isn’t a therapy session at which you will reveal all of your issues. The goal here is to show your potential funder that you have a real grasp of the internal and external challenges to your business, and how you plan to deal with them.
Slide 7: Your Team
Creating a team slide might not seem particularly challenging, but this will be one of the most critical parts of the presentation. Investors invest in two things: people and opportunities. This slide should make the investor feel confident that if they give you money, it will be well managed.
The goal of any successful team introduction slide is to showcase a successful combination of education, real-world experience, and good ole entrepreneurial spirit. If you didn’t graduate from an Ivy League school or previously helm another successful startup, you will need to double down on showing you and your team’s entrepreneurial spirit.
Using the chart below we have outlined some of the most common scenarios and suggested strategies for presenting you and your team. See which scenario best describes your team.
|The One-Person Team||This is the most challenging scenario for any entrepreneur. Let’s assume the investor loves your idea, they will now be looking for relevant experience and a successful track record in your previous roles. They will also be looking closely at your personality and whether you’re passionate enough to keep things moving forward in the bleakest of times and pragmatic and ethical enough to make the tough calls.|
|Best Friends Team||Many great business ideas have been hatched over a beer or long dinner with friends or a significant other. But investors don’t want to deal with a many-headed Hydra or have an entire investment be put at risk because of a breakup. In this scenario you will need to show that one person is ultimately in command of the day-to-day aspects of running the company. You may also need to prove that there are legal contingencies in place that protect the business in the event of personal fallouts.|
|Missing Link Team||If you are missing some key players on your team, don’t try and hide this. You can either wait until you have the right people in place to take a meeting or let them know that some of the funding will actually go to filling these critical positions.|
|Corporate Elite Team||Working at a startup is much different than being employed as an executive or middle manager at an established company. They are messy and scrappy and require a smaller team working longer hours with fewer resources and a strong probability of failure. In short, it’s not for everyone. If your team’s experiences come only from established companies, you need to make sure you are highlighting key initiatives and successes that bring their scrappy, entrepreneurial spirit to light.|
What to put on a team slide? Keep in mind that you are going to speak to this slide, so keep it simple and stick to the basics.
- Role at company (because saying CMO may not always be enough)
- Current/past relevant experience
Here are two examples:
Single Founder Slide
Core Team Slide
In this scenario, focus only on those key team members who will prove to investors that you have the talent in place to not only run your business, but also to deal with the critical challenges you previously laid out in your presentation. Add photos; they have a humanizing effect.
Slide 8: The Financials
Feature your projected three-year financial model. This slide is a classic case of damned if you do, damned if you don’t. If you don’t put this slide in your pitch deck, they will ask for it. If do put it in the deck, chances are they won’t believe the numbers. So, include it, but keep it simple.
The following, for example, is a standard revenue model for a new startup that aims to gather cash via a la carte and subscription sales. As you can see, nearly everything is accounted for including service space, legal fees, and marketing. Also important are founder salaries. In our decks we like to add founder salaries at about month six, thereby ensuring the investors know that they won’t be paying you out of pocket for your work.
If this seems like a lot of data, you can easily simplify this and adding a more detailed spreadsheet to the appendix. If you’re worried you don’t have this date, don’t be. Simply make your best guesses based on your experience in the industry. We’ve created a sample version for you to download and use on our website.
Slide 9: The Opportunity
Many refer to this slide as The Ask. This is where you explain how much you are raising and how much you are asking for.
As we discussed earlier, there are many reasons people invest in early stage startups. But in most cases, it will not be altruism. It will be because they see an opportunity to make money. Or it will be out of a fear that if they don’t invest in your company or service, they will lose out on a future opportunity to make money.
This also sets your valuation – the amount you are “pricing” your company at in the beginning. For example, you can say “We are looking at a $2 million investment at a $8 million pre-money valuation” which simply means you want to sell a fourth of the company. You can then explain how you’d like to raise it. In most cases you will say “We will raise on notes,” which means you will use the SAFE note we describe in the investment chapter.
Ask a startup mentor to help you with the ask. If you leave an investor meeting without an ask then you are most likely going to get good advice and no check. At least have an ask ready to go when you are sitting at the conference table.
Slide 10: The Road map
At this point in the presentation, you need to discuss where you are in the process of launching (or expanding) your product or service. Here are a couple of ways to show that.
Be Brief, But Carry a Big Appendix
The key to a good presentation is to be concise and brief, but you may find yourself failing by not being prepared for the follow-up questions. This is why it’s a good idea to be ready with extra slides in your appendix. We can’t tell you specifically what would be relevant for your particular idea or pitch, but based on our own experiences, here are some thought starters:
- More detailed financials
- List of current customers (B2B)
- Media quotes and press review highlights
- Quotes from key customers
- Examples of marketing collateral
- Photography, video – anything that brings your idea to life
- Detailed competitive audits
- Detailed bios of each team member