“How to Pitch your startup?”
Sep 29, 2023
Coming from an engineering–management background, I thought I knew well enough about using slides and making presentations, whether in conferences or in seminars.
However, when I started working with Startup founders as their business coach, and when my client had to make a presentation to investors for fund-raising, it became apparent to me that presentations to investors speak very different languages from the technical seminars.
Unfortunately, many CEOs or C-suit executives, who become startup entrepreneurs at a later stage, often assume pitching investors is the same or similar to presenting at technical seminars, and they usually begin a fundraising campaign on the wrong foot.
As an entrepreneur, you probably know well that your startup or your startup idea will need funding to grow.
When the amount is large, this financing will come from external sources—i.e. people who are not your friends and family.
This means that…you’ll need to communicate your ideas to potential financiers in a way that gets them excited about investing in your business.
First and foremost, let us try to understand what is a pitch deck.
In simple terms, a startup pitch deck is a presentation that helps potential investors learn more about your business.
In my opinion, the primary objective of a pitch deck is not to secure funding but to make a possible to go to the next meeting.
This is because securing funding is a multi-step process. A good informative pitch deck is the first step on the ladder.
A Pitch deck is a presentation that will make future investors interested and engaged in your startup activities.
The next question is – “What is included in a pitch deck presentation?’
A pitch deck presentation usually consists of several slides that help you to tell a compelling story about your startup.
You can either use simple PowerPoint slides or use modern software to make an extraordinary slide presentation.
There are many different opinions about what is to be included in the pitch deck and what should be the normal length of the presentation.
We are always tempted to dump tons of information in our presentation, thinking that all the information given in our presentation will be essential for investors to make their own decisions.
There is no such thumb rule however still it is being followed as a “Thumb rule” – usually the pitch deck presentation runs with either 10 slides or a maximum of 19 slides.
Usually, founders follow the convention of 10/20/30.
It means, a presentation of not more than 10 slides, should not last more than 20 minutes and should not use more than 30 font size.
Before we go into detail about what each slide should contain the information, let us take an overview of the pitch deck.
You may need to create several different kinds of pitch decks as a startup founder.
The first may be the one you create to pitch potential cofounders to join you on the team. In this type of presentation, you’ll likely want to focus on the company’s mission, the culture they’d be joining or rather say helping to establish, and the growth potential they have a chance to be a part of.
The second type would be a comprehensive deck, actually meant to be shared rather than presented.
This type of pitch deck contains all relevant information and more data and text than you would use to pitch it live.
You might email a deck - like a pre-pitch deck before a live pitch - especially for your investors to know your startup details in advance which you might not be able to cover during your live presentation.
The third type of pitch deck is the investor pitch deck, designed for an individual or group that can help fund your company’s formation or expansion.
There are a few rules which every founder needs to follow to have an effective presentation.
1. Keep it simple
Pitch decks serve as a vehicle to initiate a conversation.
Try to draw a smooth and engaging storyline about where your invention came from and where you are planning to go.
Do not try to answer all possible questions in your pitch deck, simply aim to provide the investor with enough information to convince them that it is worthwhile to go for the second round of meetings with this startup.
2. Begin your presentation with a conclusion(s).
In your presentation, time is of the essence. Investors want to know within the first two slides why they should care about this innovation, what is your solution, and what are the opportunities and risks.
3. Showcase your team instead of YOU as everything.
When pitching to investors, you and your team are as important as your innovation or your idea of the startup.
Who are you?
What is your contribution to the company? What credentials do your teammates have? Are they seasoned business professionals? Showcase the members of your team. Remember, investors fund the startup innovation and the startup team.
4. Describe the ‘pain point’ of the market and how your startup will contribute.
Explain where the current problem is, how it impacts people’s lives, what the commercial opportunities are, and how you got started.
Remember that your job is to get investors’ buy-in for your startup idea and how your startup will heal the market pain points.
5. Explain your technology (if your startup is technology-based)
Explain in brief-
Where did it come from?
How does it work?
How will it make an impact?
What phase of development is it in?
How is your technology different from others?
What is your “secret sauce”?
Tell a crisp and concise story of the journey you have been through to get to where you are today.
6. Define your product process flow and discuss the risks it may carry
Every startup is risky in its initial stage and every investor knows this.
Still, investors appreciate pitches that acknowledge the risks associated with your startup and they would appreciate how you have laid out risk management and mitigation plans.
7. Propose a roadmap for future exits.
Many investors would like to know if you are aware of potential acquisitions and recent exit valuations in your startup sector.
They appreciate founders who know such information, as it demonstrates their level of preparedness.
8. Present your financial standings.
How much capital have you raised to date? How much more are you raising now?
What is the planned use of these funds?
What are the milestones you want to achieve with additional funding?
It is recommended to have a two- to five-year financial projection so that investors know you will adhere to your budget and can be trusted with their money.
9. Create branding for your startup with an explicit message in your presentation.
Your startup communication flow should be seen and felt as seamless.
You need to have a tagline that leads to an impactful elevator pitch, which dovetails into a 10 to 15-slide pitch deck.
This article of mine aims to provide a starting point for building a pitch deck instead of a one-size-fits-all kind of template.
Every startup is different.
The pitch deck for an early-stage start-up seeking seed capital should look very different from that for an established startup seeking growth capital for scaling up operations.
So, Good luck pitching!