As an entrepreneur getting funds for your business might not be easy and you may have to pitch your enterprise to potential investors. Now your presentation matters a lot because you have to convince these guys that your business is worth investing in and that there’s a good ROI for them, in only about a few minutes.
To get these investors excited about pumping their hard-earned money into your startup, you need a solid presentation that begins with having a good pitch deck.
A pitch deck is simply a visual tool to project your business story before potential investors. It is supposed to be detailed but concise on everything that might interest a judge or the investing public. It contains vital information about financial projections, a major part of your business plan, the main product proposition, and how you intend to do better than your competitors.
What are pitch decks used for?
- They are used primarily for business presentations to introduce your company and ignite the interest of targeted entities.
- Also, used for live pitches before potential investors to source for funds for your business.
- It could be sent via email as a summarized version of your business plan to stakeholders for partnership, support, funding, and other growth opportunities.
How long should a pitch deck be?
Ideally, a pitch deck contains vital information about a business but in its condensed form. Experts say a good pitch deck should not be too long and also not too short; about 10-12 slides is the benchmark.
Parts of a pitch deck
Here are parts of a pitch deck:
This contains your brand name, logo, and any other unique brand information.
This slide paints a vivid picture of a particular pain point that is prevalent in the society and which your product is aimed at solving.
It doesn’t have to be a complex problem but it must be specific in scope. Take care not to overwhelm your problem slide with more than one problem, investors like to see that your business is focused on solving a particular need. In defining your problem, you point out the gaps your company is filling in the market.
One great way to design your problem statement is by using emotional stories that are relatable for example, everybody in Nigeria needs an extra source of income, or 35 million Nigerians lack access to basic health care. Create a context relatable to your audience and use facts and figures to drive your point home.
Unique value proposition (UVP)
A UVP is essentially what sets you apart from the competition. To put this clearly, what new value is your business bringing to the market, what new improvements are you making to existing products, or why are you better than your competition?
It is indeed your unique selling point and should be clearly articulated to potential investors as an advantage. This is important because it eliminates the risk of your product failing in the face of market competition. Plus, it amplifies your profitability.
You could model thriving companies with similar business models in your UVP statement for example, by saying ‘we’re the Jumia for banks’ or ‘our company is the Netflix for entrepreneurs’.
The solution page is where you describe your product or service, what it offers and how it is to be used to solve the problem you have listed previously on the problem page.
It is advisable to use graphical illustrations to connect your storytelling of how people’s lives will be positively affected through the use of your product. Make it real, make it relatable, and use genuine data. Do not overinflate figures just to prove a point.
Target market for your product
Investors are particularly interested if there are actual people who will buy your product so it is necessary do your preliminary research in order to determine your primary and secondary market.
This slide explains your ideal customer, their characteristics, and buying patterns. It is ideal to break your target market into segments from total market share (worldwide), to total available share (Nigeria), to segmented available market (e.g. males within Abuja), and lastly to specific addressable market (e.g. age 13-30 males in Abuja).
Lastly, do not insist on a very large market share that may not be feasible in reality; use facts to determine the scope of your target market. This is mostly presented using graphs while highlighting the actual scale of the market.
This is where you talk about how much you’ve done since the inception of your business. Have you sold any units of your product so far? What stage are you in your product testing and development? This is simply telling an investor what you have done so far as a business and it adds validation to your business idea.
The aim is to be as transparent as possible in making these claims. If you have not made tangible progress, you could instead use a graph that projects the company’s growth given all the prevailing factors. It should tell your story of how it started to where you currently stand and what your projections for the future look like. Talk about any milestones you have outlined so far.
This talks about how you plan to make money from your business. Naturally, investors are interested in ‘what’s in it’ for them, the risk involved and a guarantee the business will not go under in a few years.
Your business model spells out clearly who the purchasers of your products are, your marketing strategies, pricing plan, sales forecast, and your financial projections (in figures) for at least 3 years. Your financial statements should include your expenses and revenues schedule and total sales figure to enable an investor to determine the profitability of their investment. That said, resist the temptation to overinflate figures, only show what you can back up in reality.
Every investor before making a financial commitment would be interested in knowing how much competition your product is expected to face in the market. Therefore, showing them your competitor analysis means telling them that you’re aware of who your competitors are and that you have a plan to beat the competition, especially if you’re new in the business.
A diagrammatic comparison of you and your competition will show your audience why you are better than them.
One point to note is that your goal is not to criticize your competition negatively or put them in a bad light before the public. It is rather, to differentiate your product and get your audience excited about your unique selling point.
Team\ key Staff
Include the contact and addresses of your team members. Talk about who and who comprise the key staff of your company, their expertise, past experiences, and which skill they’re bringing to the company.
If you don’t have staff yet you can highlight the key positions you’re looking to fill, the required skills and roles for each position.
This slide is where you tell them how much money you need as an investment and give insight on how you would be using the funds if given. This is a tricky section because while you want an investor to invest in your business, you also don’t want to discourage them by calling an amount beyond their budget.
So the best way to ask is not to ask for a specific amount, rather, give them a price range say, 5-10 million naira instead of 7 or 8 million straight. This way, firms or investors with an investment limit within that range can get interested in funding your enterprise.
Note that, you could also ask for certain partnership opportunities and provision of other resources aside from financials under this section. For example, if you produce tomatoes and need a partnership with a bottling plant, this is where you state your needs.
Websites to use in pitch deck creation
Here are some platforms you can use:
- Canva editable pitch deck templates
- Google slides
Helpful tips in pitch deck creation
- For some startups, especially tech startups, it is ideal to portray your minimum viable product (MVP) in your pitch deck. This will help boost investors’ confidence in your product and its viability.
- Make your pitch deck exciting with a healthy combination of suitable images, colors, fonts and font sizes. While the aim is not to bore an investor, it is also improper to present a pitch deck that looks like some designer’s color palette splashed on it. You get the point.
- Keep it short and simple. In this case, less is more because you don’t want information overload on your investors but be sure to cover the vital areas. Also, you could take questions to explain any other details they might need.
- Present updated information in your slides. Nobody likes to be embarrassed before a judge but that could be the case if an investor is better informed on certain facts than you, the presenter. Keep your figures light and try to memorize the key ones in your presentation to avoid being taken off-guard.
- Spend more time on your financials, team and competition slides. According to research, these slides interests an investor the most, in a company.
- Conduct prior research on the background of your audience, investor or judge. You can get a heads-up into their personal stories and craft a pitch they can relate to.
- Finally, always keep your pitch cards ready, you may need to use them on short notice.