It’s very different from pitching to customers.
Crafting a pitch is all about communicating value in a very short period of time. When pitching to investors, it is important to understand that what appeals to them is very different from what appeals to potential customers.
Customers are keen to know more about the value your products/services will bring to their lives and why they should purchase it. They’re keen to know how much it costs and what makes the product great. Investors on the other hand are more fixated on the investment opportunity instead of the products/services offered. They want to know what the business is about and how they can participate to bring long term value and generate returns at the end of the day.
To help you get started, our team has put together a basic outline of a pitch deck that you could use when pitching to investors to raise funds. We hope this will help you understand the thought process behind what’s important in a pitch and how you can better improve your value proposition to investors.
Before starting out – Begin with the end in mind.
Understand what it is you’re trying to achieve in the end. If you’re trying to raise capital, your goal should be to ensure that the investor is able to gain a good-enough grasp of what your business is about, what you expect from them, and the value they could potentially gain.
The pitch should be short, concise, and a crystal clear, ideally in less than 10 minutes. 5 minutes would be perfect.
So what should be in the deck? Below is the list (in no particular order):
Slide 1 – Problem statement and solution
What’s the problem and how do you plan to solve it? Is it a “need” (a real pain point to the market) or is it merely a “good to have”? How do you plan to solve it with your new solution?
Use visuals to help investors understand what the product/service is about clearer. Include screenshots, photographs, or mockup designs.
Slide 2 – Market Size and Target Market
Who is the customer and why? For investors to be interested in a business, there has to be a large enough addressable market to reach out to.
Why do you think this market is big? Give a rough estimate on this number, realistically.
How do you plan to start targeting this market? Why this group of people first? It is important to understand that when starting out a business, you are unable to capture the entire market and hence identifying and zeroing in on the first batch of adopters/customers is crucial.
Slide 3 – Business Model
How will this generate revenue? What are your revenue streams? Avoid having too many revenue streams as it shows a lack of focus. Include information on your margins. How many % of what you earn goes to your business?
What approach do you use to acquire the customers? A brief overview will do, but not too brief like “social media”.
Slide 4 – Traction
Is this validated? The best form of validation is to launch a simple solution to the market and gauge the response.
What have you achieved to date? Include metrics like your revenue, customer acquisition cost (CAC), number of users, growth/churn rate, and retention rate (DAU/MAU).
It is also good to include some information on how you achieved that traction if you did not already include it in the previous slide.
Slide 5 – Your Team
Who is in your team and what are their roles? Why are they there?
As the team is the backbone of any organization, it is shown statistically that more support always results in a higher success rate for the company.
Having the right people is crucial and investors want to know specifically who is in the company. The “who” is equally important to “what” the company does.
“Success has many fathers, failure is an orphan.” – Count Galeazzo Ciano
Are there advisors in your team? What do they “advise” on? Do you already have existing investors?
Slide 6 – The Ask
How much are you raising? Why are you raising this amount of money (what will the funds be used for)? How long will these funds last (What’s the current burn-rate/spending of the company)?
Provide some realistic assumptions in this area. Include visuals/charts to make it clearer. Also, valuations are often times negotiable, don’t be too rigid in that area.
Slide 7 – Longer Term Goals
What’re your goals in the coming months/year+? Will you need more financing? If you do, when (and how much) are you planning to raise on the next round? What’re the milestones?
Investors aren’t investing based on what your company is today, but rather what it is going to become. Be clear to outline your vision and longer term plans/goals.
This deck and examples above are not a definitive format to raising capital, but it will provide sufficient clarity to investors on what your business is about and how they can get involved.
We hope it will bring lots of value and aid you further in your fundraising journey.
To download the sample deck, click here.