May 20, 2022 by Adam Hoeksema
If you’re a new startup looking to get into the market, or you have proof of concept and you’re ready to expand, you may be looking to venture capital investors to give you the help you need.
That’s easier said than done though, and the vast majority of people leave pitches with VC investors with their tails between their legs. So, what is it about a pitch that gets investors’ attention?
Successful pitches are well designed to cover the required details and nothing more. They’re appealingly short and to the point, and most importantly demonstrate the strength of the founder, the organization, and their reliability in terms of protecting the investor’s ROI.
Here we look at exactly what all that means and how to put it together to build and present a perfect venture capital pitch deck.
What is a Venture Capital Pitch Deck?
A pitch deck is essentially an information pack, presented to prospective investors in order to persuade them to invest in your project. It’s a summary of what you do, what you know, and how you’re going to make money from their investment.
Pitch decks are typically presentations done on PowerPoint, with 10-20 slides, taking anywhere between two minutes and half an hour (although we’ll go into why those specific times aren’t necessarily a good idea).
The Role of a VC Pitch Deck
Your pitch deck should give a brief overview of your company, your plan, and your vision, in a way that will garner the support of your prospective investor. The presentation form is a far more engaging and personal approach, but a pitch deck can be sent via email too. I
n the latter case, it will need to be more of a brochure, with all the information on its pages. A presentation gains the benefit of a tailored narration, meaning slides can be more aesthetically pleasing and generally fewer.
Forming one for your startup will require an understanding of what a VC Investor wants, why they commonly say “no”, how to design and build your deck in the right order, and perhaps a few examples to get you started. Luckily, that’s exactly what we’ve got ahead for you.
What a Venture Capitalist Wants
As obvious as it might seem, it’s worth pointing out that the process of compiling a VC pitch deck needs you to think more about what a VC investor wants, and less about how excited you are over your idea and how much you want more money. With this in mind, you will reduce redundancy and better target your pitch to the key points an investor is going to be looking out for.
Here are five of those key points:
- What urgent problem are you solving?
Investors are going to be bombarded with pitches and need to be able to spot a good one from a distance. The first mistake half of startups make is failure to actually address an important issue with a functional solution.
If investors can’t see quickly what you’re doing and how you’re doing it, as well as why that’s important, the power of your pitch is going to be significantly reduced, so make sure you have this, and make sure it’s presented and understood early on in the pitch.
- Show your smarts.
Investors put their money down on people. As a representative and responsible person for your startup, they’re going to be looking to you to provide sensible judgment across a range of disciplines. You need to bring them confidence that your smarts are going to be a strength in your industry.
Can you demonstrate that you’re thinking outside of the box? Do you have a new algorithm or an unusually cost-effective way of grabbing clients? Show that you’re smart in more than one way and build trust in your pitch.
- Understand your competitors.
This is a big one. Are you competitive and can you differentiate? Can your prospects solve their problem without you, and how easy is the solution to find? What are your competitors doing right and wrong, and how are you planning to stand apart from them?
Forcing your way into a saturated market might not be a very appealing idea to all of your investors, so make sure that whatever your approach is, you don’t give the impression you’re underestimating the competition. Make sure you show you’ve done your homework.
- Go To Market (GTM)
Show that you’ve developed a focused, scalable go-to-market strategy. This means displaying the key attributes of customers or markets and how you’re planning to go after them. Explain in your pitch exactly why they’re important to your strategy and in which order are you going over these markets.
No investor wants to see blind optimism. Even if you’ve explored the layers of your assumptions, pipeline, and conversion rates with deep scrutiny, a financial projection that’s too optimistic will still be a sign that you’re not taking things seriously.
And if you haven’t explored those layers in your pitch, nobody will believe your projection anyway. Forecast accurately, carefully describe, and figure out the assumptions, and know beforehand how to defend them. Fortunately for you, we’re experts at this part, check out our financial projection templates for more than 50 industries.
Now we’ve got some of the dos let’s point out some of the don’ts.
Why a VC Says No
Another way to approach the pitch deck is to listen to the reasons VC investors turn people away. Alicia Syrett, CEO of Pantegrion Capital, suggests five reasons a VC investor may say no to your pitch.
The first thing to point out about VC investors is that they may say No to 99 out of 100 pitches that they’re presented with. Fielding thousands of pitches, they are faced with numerous options from countless entrepreneurs. In order to improve your chances of being in that 1%, consider the following reasons the rest fail:
- Making rookie mistakes. For example, pitches that show the founders haven’t done their homework are a quick way to lose VC interest. Research your investor and make sure you’re targeting the right person. Trying to pitch to anyone you can get a meeting with will just waste your time and theirs.
Then there’s also the importance of timing – don’t hound an investor when they’re on holiday or in the middle of lunch. Basic principles of human decency apply here, and surprisingly, numerous pitches fail from a lack of it.
Investors value people with integrity. Fakes and cartoonish salespeople are not going to convince a lender you’re genuine. Honesty is important; don’t be weird or act shady with NDAs right off the bat – it spreads an atmosphere of distrust.
Show that they’re investing in what they want to see happen. This means don’t think about giving yourself an inflated salary with their money; make it clear that you’re going to put it into your project.
Fit matters. Don’t only focus on the money – say how they can contribute in other ways. Respond quickly and with quality, and make sure you’re not difficult to work with.
Make investors excited, share your enthusiasm, and point out ways in which you want the person as well as their capital. Pay attention to what they bring to the table with their networks and expertise.
- Business basics.
You need your fundamentals to be strong. Don’t focus on small or highly-competitive markets, come into the pitch with something that competitors can’t easily replicate. Know your financials; profitability, gross, etc., and be able to hold a conversation about them.
You don’t need to be as experienced as your investor, so don’t try to pretend you are – but make sure you know what you’re talking about.
Investors also make mistakes. You may get everything right, form the perfect pitch deck, and they still just aren’t in the mood. This is normal, and if you’re faced with a No at every attempt, use it as a learning opportunity.
Keep it Short
With a rise in VC interest in recent years, investors are assessing more pitch decks than usual. This means they have a lot of options, and they’re eager to shop around. Consequently, the need to be concise and efficient when pushing through your message has never been more important.
While some of the most famous pitch decks were 30+ slides and over 15 minutes long, these are outliers from a different time. Typically, a pitch deck should take no more than five to ten minutes to get through. Ideally, closer to 3.5 minutes, and with the recent increase in interest, it’s possible to cut that back even more to under 2 minutes.
However, there are numerous exceptions and drawbacks to doing this (as you’ll see below) and these times will differ depending on whom you’re pitching to and what kind of project you’re running. So, the timings aren’t set in stone, but keep in mind that anything over 15 minutes or under 2 minutes may be entering the red zones of what is likely to be effective.
If you find you want to go for a short deck, this also doesn’t mean you have to cram in the same information; instead, think of the pitch as a trailer for your service. It doesn’t need to be comprehensive – it just needs to be an engaging demonstration to your investors. If there is a place you can use a visual to better demonstrate with fewer words consider making some compelling data visualizations. We’ve got a guide to help you decide which charts are most effective and how to make them.
This may seem like a daunting task, but if you have done the homework needed of you, it shouldn’t take too long to demonstrate you know your stuff.
Putting it all Together
With all this information understood and your fundamentals and research well established, it’s time to build your venture capital pitch deck. Here’s a general template for a ten-slide VC pitch deck that will cover the basics for most people’s needs. While you can add slides to this template, this could be considered the bare bones of a pitch, so think twice before taking ant out!
- Cover slide
Keep all these slides as concise as you can make them, but particularly let the cover just be a place for your company name, logo, and contact details. This might be the most important slide to create an initial, tasteful impression.
- Pain point
Now you get into the philosophy of your project. There’s a problem, and you’re here to fix it. Clearly state and show understanding of the problem in this slide, but save the solution for the next one.
- Your solution
This is where you offer the details of exactly how you’re addressing the customers’ pain points; what your product or service does, and how that helps settle the problem.
- Market size
Now you’re going to show you’ve done your homework. Show you’ve thoroughly studied your market here. Use graphics and eye-catching statistics.
- Business model
And this explains your approach to reaching that market, as well as how that market will bring you revenue.
How are you going to grow? This is where you’re going to identify your marketing strategies, your sales team, and any creative approaches or tried-and-tested methods of your go-to-market plan.
- Competition analysis
How are your customers currently dealing with their pain points? Show your competition. Competitors may be a hindrance to your business, but they mean that there’s a market for what you’re offering, which can be an appealing concept to investors
Who are you, and what are your skills? This slide can be kept for the end, but it’s sometimes better to leave something for the investors to ruminate on for the lingering final slide, while you field questions after the pitch.
- Financial Projections
What do you envision for the financial future of the company? Forecasts for revenue, high-level spend, burn, and KPIs like customer count should be put in here. It’s fine to add an appendix for more detailed financial reports if you have plenty to offer; keep the slides relatively simple though.
This slide should use easily-absorbed visuals to present your data. The importance of financial projection in your pitch deck in the demonstration of an investible company in the next stage. Funders will want to know that someone will be helping your company grow in the future because that improves their ROI; so it needs to have a solid financial foundation and a good outlook reflected in the projections.
For help with financial statements and forecasts, it’s a good idea to use a template, such as the ones we have here at Projection Hub. These can take the hassle out of the forecasting process and impart a professional style to your documents that could well improve your chances at the pitch.
For this section, put a short overview of your pitch, including how much money you’re looking for and what your traction is. If you have other investors interested, this is the time to add that information as it will be more attractive to VC investors if someone has already taken the leap.
Use diagrams to show where the money will go and keep the page neat and appealing. This will be the last slide your investors see and may well be sitting up on the screen for a while after the pitch, so keep that in mind!
Still not sure how to go about it? Let’s take a look at some of the most famous pitch deck examples and find out what made them so successful.
Perfect Pitch Deck Examples
This is possibly the most famous pitch deck and makes use of very concise slides with very little text on them, summarizing their intentions with graphics and tastefully arranged statistics. They follow a pitch deck format of 14 slides and have a relatively long pitch of 10 to 12 minutes.
Uber had a colossal 25 slides in their successful pitch deck. One of the ways they made this successful is by changing the slide design throughout the deck, which helps to keep people interested during what could otherwise be a tedious expedition into the company’s inner workings.
This length of the pitch is still a bold move, but the benefits are in creating a pitch deck that contains almost everything there needs to be known about your business.
This is a great example of how the 10-slide method can be effective. This short and sweet deck cuts to the chase. Guy is a proponent of the 10/20/30 rule, claiming a pitch should have no more than ten slides, last no longer than twenty minutes, and contain no font smaller than 30 points.
These examples are of pitch decks that worked. However, focusing on the design of the slides may give the impression that VC investors are simply looking for a pretty slide show. In reality, these entrepreneurs had something powerful to offer, and that’s why they got selected.
Still, presenting the information in a digestible way and in the right order makes a big difference to how many people you’re going to find to pay attention to your pitch in the first place, so the importance of a well-planned VC pitch deck shouldn’t be overlooked.