No, These Decks Did Not Raise Billions of Dollars!
Attention, first-time startup founders! I know you’ve seen those eye-catching posts from people craving attention on LinkedIn that claim “These Decks Raised Billions of Dollars”, but let me tell you the harsh truth: those decks did not raise any money at all. The founders did.
In reality, these click-bait posts should have been entitled “These Decks Got a Meeting for the Founding Team in Front of Investors Who Then Spent Hours With the Founders to Decide if They Should Invest in Them or Not”… but obviously, that title would be too long and dull.
The Goal of a Deck
The one goal of a deck is to get you in front of an investor. That’s it. Just like your CV is to get you a job interview. Your deck should contain enough information to generate the magic moment when the investor says, “I want to meet with this startup.”
For this reason, your goal is to pique the investor’s interest and generate questions that they will want to ask you. The deck should not be too long and complicated because investors spend their lives in decks and they are not making an investment decision. They are making a meeting decision. If your deck is too long, it can actually be a bit of a deterrent. A 10 slides deck is totally enough to get you a meeting. In fact, for early stage startups, an experienced investor will probably know after the first 4 slides if they want to meet with the founders or not.
With this in mind, let’s explore how to create an effective pitch deck for an early-stage startup.
The Most Important Slide: The Problem
The most important slide in your deck is the problem slide because if the investor does not buy the problem, they will not buy the rest. Make the problem clear, big, and real. If the investor “buys” the problem, he or she will be curious to discover what your solution is.
Anatomy of an early stage startup pitch deck
Your deck should begin with the company name and one sentence positioning or vision. Clearly state what your startup does in a concise and easy-to-understand manner.
Next, on slide two, state the problem you’re trying to solve. Avoid writing “Problem” on the slide. Guess what? We can tell a problem when we see one. Instead, state the problem and explain, preferably with sourced data, how significant this problem is. Make it clear and big.
Assuming the investor agrees with the problem, slide three should state how you plan to solve it. Explain what is unique about your solution. Again avoid entitling the slide “Solution.” (we get it!) The investor can tell what it is from the context. Instead use an exciting title about the solution itself.
At this stage if the investor agrees with the problem and likes the solution they will want to know who is behind the idea so, time to showcase your team, especially if you have outstanding credentials and an unfair advantage in the field. Simply, prove that you are relevant to the problem you are solving.
By now, it is very likely that the investor already knows if they want to meet with you or not so the remaining slides are really just here to give them reassurance that this is indeed a startup they should meet with.
Slide five should cover what you’ve accomplished so far and what’s coming next. Illustrate this with a timeline and use metrics, if possible, to show that you’re a metrics-driven founding team.
On slide six, explain how you plan to monetize your users. Who will be paying you, how, and for what? Bonus points for subscription business models.
The go-to-market strategy should be on slide seven. Describe clearly which channels you’ll use to reach your target audience, and don’t forget the power of partnering, both direct and indirect sales. Remember, social media is not a strategy; it’s a tool.
Slide eight should describe who your competitors are and how you differentiate from them. A list or diagram is not enough. You must mention your competitors’ strengths and explain what makes you different.
On slide nine, demonstrate that you’ve done some market research and have a clear-ish idea of how big your addressable market is (yes, addressable, not total market). The bigger, the better.
Finally, on slide ten, cover the financials. How much money do you need, and what will you use it for? At what stage will the company be once the money is gone? Will you be profitable and ready for another big round or will you still be burning cash every month, therefore in dire need of another round of financing? How many users/customers will you have retained and what will be your revenue then?
In conclusion, your pitch deck is a document whose goal is to get you in front of investors and gives you the opportunity to sell your vision and team. Remember, investors don’t invest in decks, they invest in people. Keep your deck short, clear, exciting and to the point. Focus on the problem, solution, team, traction, and financials. Use visuals to make it more appealing, but don’t overload it with information. Good luck with your fundraising journey!
