If you’ve ever raised funds for a new or existing venture, you’ve undoubtably spent many hours working on and refining your pitch deck. Unlike a Prospectus which covers your business plans in great detail, a pitch deck is an overview your business, tailored to answer the key questions of a would-be investor, in a 30-60 minute conversation. Here are 10 rules that we use when creating a pitch deck.
The Ten Rules for Making a Great Pitch Deck
- Keep it simple
- Start with your Elevator Pitch
- Show your path to profitability
- Explain your exit strategy
- Don’t oversell and don’t undersell
- Charts are great, but keep them simple
- Highlight the individual skills and experience of your team
- Represent the unique risks of your business
- Embrace feedback and be open to change
- Track who’s viewing your deck
- Keep it simple. Most great pitch decks are in the range of 10 slides and are easily understandable by people that are not experts in the given industry. Keeping it simple means being clear and concise. If the deck is meant to stand alone, then include slightly more information. If it is intended to accompany a discussion, then have less information. Highly polished and beautifully designed pitch decks are nice, but not necessary. Unless your investors are investing in a graphic arts company, they don’t care about your powerpoint and photoshop skills.
- Start with your elevator pitch. Much has been written of the fames elevator pitch: the 15-30 second super simple explanation of what your business does and what sets your company apart. If you aren’t able to do this then you’re not ready to pitch investors.
- Show your path to profitability. At the end of the day, investing boils down (1) How much do you need (2) What are you going to do with the money and (3) How much money should I expect to see back. If your deck does not answer these questions, then go home. Whether you’re raising money to buy a $15 million building, or raising $10,000 to produce souvenir keychains, these questions remain the same. Practically speaking, always include the following metrics: (1) Current and past revenue and costs (2) Projected future revenue and costs for the next 3-5 years (be ready to discuss how you came about your projections).
- Explain your exit strategy. Different industries and products will have different exit strategies. This is intended the answer the question “When will I get paid”. An exit strategy may be selling your company in 3 years to a larger player, refinancing a building in 2 years, licensing content, or distributing profits every quarter. Investors need to see you are thinking long term and have a realistic plan to pay them.
- Don’t oversell and don’t undersell. This goes for everything you have listed in your pitch deck and everything you say in meetings with investors. Investors want to invest in confident and capable people so don’t undersell yourself. At the same time, humility and a clear grasp or reality are key to success in business, so be realistic and don’t oversell yourself or your numbers. Base future projections on past performance or best guess estimates based on industry comps.
- Charts are great, but keep them simple. On the same thread as Rule 1: Keep it Simple, charts are a great tool for representing data at a glance. Charts are great in showing past and future projected growth. However, we cannot stress enough to keep the charts simple. We’ve seen so many decks with custom charts/graphics that attempt to explain something, only to confuse investors because they are not familiar with the chart convention. The conversation then turns to explaining the chart, rather than spending the time discussing your business. If there is a particular analysis that investors would like to see, let them ask for it, then include it.
- Highlight the individual skills and experience of your team. A great idea can’t be executed on effectively with a lackluster team. The inverse is also true. Highlight the key people on your team and the key values that they bring. This isn’t about listing people’s resumes (investors today have access to LinkedIn and can do their own resume surfing). It’s about highlighting key skills and experiences of your team members that will contribute to your companies success.
- Represent the unique risks of your business. Every business has risk. Investors know that. If there were no risks and expect you to be open and honest about them.
- Embrace feedback and be open to change. We often see entrepreneurs hold back on sharing their pitch deck because it ‘is not ready’. If you are stuck on solving a few key issues, don’t hold off on making progress with investors. Be honest about your issues and seek guidance. With the right mindset, the time you spend meeting with prospective investors will be some of the most valuable time you spend on planning your business. The most successful entrepreneurs are open to feedback, and use the time to learn from the experience of the investor pool. Be open to feedback and seek out advice from investors (especially successful entrepreneurs), learning from their experiences. Entrepreneurs know that successful plans take time to finalize and that successful business people evolve their thinking over time. Your pitch deck is a living document and is expected to change over time.
- Track who’s viewing your deck. We recommend using a service like docsend.com to track who has viewed your deck and how much of the deck they have viewed. This will help you identify who is interested and what slides are getting the most time. As a rule of thumb, it’s always good to send the deck at least 3 days prior to an investor meeting.
We hope that you found this information useful. Please reach out with any questions. We offer a fixed price Pitch Deck consultation service with a 1 week turnaround on refining existing pitch decks or creating new pitch decks. Expedited turnaround is also available on an as needed basis.
Call us at (212) 380-1334 to schedule a consultation.