Components of a Successful Pitch Deck
Before considering what is required of a pitch deck, it may be suitable to familiarise yourself with what a pitch deck is here.
In summary, a pitch deck is a brief presentation to allow potential investors/clients to obtain an overview of your business. This includes:
business structure;
business plans;
products; and
services.
The next step in creating the perfect pitch deck is understanding what makes a good or bad pitch deck.
10 elements to include in your pitch deck
Introduction
The initial slide of the pitch deck must present an introduction to the business in a straightforward and comprehensible manner. It is customary for companies to incorporate your promise to investors/ buyers on this slide, highlighting your unique selling point as a business.
Team
The presentation slide that highlights the team will emphasise the knowledge and skills of a company's management team in promoting and vending a product. It will establish who the significant members of the team are, including co-founders (if there are any) and highlight how their proficiency and past accomplishments can contribute to establishing the company's edge over its rivals.
Problem
In order for the pitch deck to be effective, it should outline a problem that is currently being experienced by the target market of the business. This will serve as evidence of the importance and relevance of your product or service in meeting their needs. It will also reassure investors that you have done your research and understand where market opportunities exist.
Solution
This must explain how the company addresses the issues faced by the intended business users. It is recommended to present this information through storytelling, where relatable anecdotes of customers using the products to enhance their lives are shared. Additionally, it is important to showcase descriptions and visuals of the products or services offered, such as photos, screenshots, or videos demonstrating their physical operation. You may even want to have physical versions of the project to give to potential investors or customers for them to try out.
Target Market
A target audience comprises individuals who have similar traits. Each service or commodity is intended for a particular group, and it should be highlighted in the presentation. The pitch deck ought to contain details about the competitive environment in which your venture operates, as well as the potential market for success in that setting. What is the magnitude of the market for goods or services comparable to those provided by your enterprise?
Traction
This presentation slide demonstrates the soundness of the company's business strategy by illustrating consistent month-to-month expansion via initial sales and assistance. The objective is to mitigate any apprehension of risk among prospective investors. This slide might incorporate a concise list of accomplishments, such as user count, yearly revenue growth rate, and profit margins.
Marketing and Sales Strategy
It is crucial to provide a comprehensive explanation of the product's marketing and sales strategy for investors to evaluate a company's understanding of the market size and differentiate its marketing approach from competitors.
Competition
Provide details about the features that distinguish your product or service from its competitors or other available options in the market. You may obtain this information by referring to your analysis of the competition.
Financials
Usually, investors require a company's financial status for a span of three to five years, which includes income statements, growth prospects, and data about the business model. Graphical representations like pie charts or bar graphs are more useful than mere numerical values for displaying this information. Additionally, the figures mentioned in the traction slide (slide 6) may support the predicted numbers.
Investment and Funding
Entrepreneurs may occasionally overlook a crucial aspect when preparing a presentation deck: the precise amount of funds required to finance their venture. It is imperative to show the capital will be allocated towards achieving the company's objectives, helping to build credibility with potential investors.
While it's essential to locate investors who connect with your concept, even if you do find them, anticipate that they will only devote less than three minutes to examining your pitch deck. Even though you may have all 10 elements, a good-looking project and pitch deck, the probability of pitch decks obtaining investment funding is approximately 1%. But don’t get disheartened by the numbers, by following a few simple steps, you are that much closer to becoming part of that 1%.
Here are three frequent reasons why even excellent ideas fail to secure investment through pitch decks.
You are an idea, not a business
To have a successful business, one must prove that they can turn a profit with their concept. Investors invest in the people behind the idea, not just the idea itself. When asked why you should be the one to start this business, it's important to show how you and your team are capable of turning this idea into a profitable venture. This can come from expertise, industry contacts, and a solid network. It's not about personal passions or needs but about demonstrating the ability to succeed.
Your financials are half-baked
Early-stage startups should avoid overestimating their financial projections and using unrealistic market share calculations. It's important to consider how much revenue the startup could generate as it scales and balances the capital being sought with potential earnings, keeping in mind that investors generally seek a 30-40% annual return for early-stage startups. Overshooting can make founders appear unrealistic while underestimating potential may not be appealing to investors. Providing realistic expectations is crucial for attracting investment. The article suggests including quotes from references and citations to support financial projections.
Your team is not fully committed
The success of a startup is often determined by whether the team has reached the point of no return, indicating their level of investment in the idea. Founders who are not willing to invest their own money may signal a lack of commitment and deter potential investors. Initial investments usually come from founders, as seen with Google's early funding rounds. It is important for founders to show that they have invested their own money in order to gain the trust and support of others.
Find the perfect pitch deck templates here.
Author: Euan Campbell -
Author: Euan Campbell -
In partnership with
DISCLAIMER
This article has been written by law students for the sole purpose of providing informative insight. The information in this article is intended for educational purposes only and does not constitute legal advice, nor should the information be used for the purpose of advising clients. You should seek independent legal advice before relying on any of the information provided in this article.
Sources
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Main. K, ‘The 3 Biggest Reasons Pitch Decks Fail Even the Best Business IdeasWhy your pitch deck might be killing your chances of startup success’ (Inc, 20 May 2021) <https://www.inc.com/kelly-main/the-3-biggest-reasons-pitch-decks-fail-even-best-business-ideas.html#:~:text=In%20that%20small%20window%2C%20there%20are%20three%20things,reasons%20pitch%20decks%20fail%20even%20the%20best%20ideas.> accessed 22 May 2023
Masterclass, ‘Guide to Pitch Decks: 10 Elements to Include in a Pitch Deck’ (Masterclass, 4 Nov 2021)<https://www.masterclass.com/articles/pitch-deck-guide> accessed 23 May 2023
Sheikh M, ‘What is a Pitch Deck? Examples, Tips and Templates’ (Visme, 17 Jan 2023)
<https://visme.co/blog/what-is-a-pitch-deck/#how-to-create-a-pitch-deck> access 24th May 2023
Indeed Editorial Team, ‘What Is a Pitch Deck? Definition and Tips’ (Indeed, 22 July 2022)
<https://www.indeed.com/career-advice/career-development/pitch-deck> accessed 25th May 2023
