Creating an Investor Pitch Deck That Makes Sense! by Jack Scatizzi (An ITEN EIR)

August 22, 2018 – I have participated in over 1,000 investor pitches and I can pretty much guarantee that your investor pitch deck could use some help. It’s okay, most entrepreneurs struggle with pitch decks. Either they have never created one and thus don’t know what it should or should not include, or they are too close to their company and have a hard time separating the proverbial forest from the trees.

My advice is to throw out any previous versions you have and start over from scratch.

I know this sounds like a gain pain in the ass since you will be wasting all of the time you spent developing your current deck and that it would be more time efficient to update your out of date slides and add some new ones. But good pitch decks have a simple straight forward narrative and when you update slides or add new slides to an old narrative you end up with multiple partial narratives that can conflict and confuse potential investors.

Imagine you are writing a screen play and every time you get a meeting with a producer you add a new character, plot twist, or scene. After a dozen meetings or so your screen play won’t make sense. It will have too many characters with minimal impact on the main plot, some characters will be underdeveloped while others will be overdeveloped, it will have too many side plots that don’t get wrapped up, and too many scenes that don’t fit together. Essentially no producer will be able to follow the story line and understand why you are so passionate about your screen play and the characters you created. The same thing happens to pitch decks when entrepreneurs try to tweak their decks to include feedback from multiple prospective investors.

When I taught creating investor pitch decks to the companies in my accelerator I told all of them to throw out any previous versions of their pitch decks or slides and to start fresh with a focus on crafting a solid and simple narrative. I then suggested that they take 10-12 pieces of blank paper and label each page with a concept they wanted to convey in their pitch. Then to start outlining what specific ideas or details they want to convey for each concept and to hand draw the visuals they want to accompany each concept. By having each concept on a separate piece of paper you can easily play around with the order or even break a page/concept into two slides.

Once you are happy with your paper version you can then graduate to using PowerPoint, but again focus on the content first. Only after you have the content developed for all of the slides should you start adding images and working on the overall design of each slide. Most entrepreneurs make the mistake of focusing on the visuals or the slide design over the content, when in fact investors only care about the content contained in each slide. That does not mean that a slide deck should look sloppy or visually disruptive, just that investors don’t invest in visually stimulating pitch decks alone, they invest in solid business which comes across in high quality content.

Additionally, every entrepreneur should have two versions of their pitch deck, one for giving a live investor pitch and one to email out to prospective investors. Keep in mind that when you email your deck to a prospective investor you are not there to explain each slide to them. Thus, it’s to your advantage to have a version where each concept is clearly outline and you can be assured that the prospective investor will draw the correct conclusions from each slide. It’s generally easier to develop the version that is “text heavy” and focused on high quality content and then you can work on streamlining the text and adding different images to create the more minimalist and highly visual version you use for live investor pitches.

I would start with these 10 concepts on a blank sheet of paper:

  1. Identification of Problem
    • Introduce the “Pain Point” that you are alleviating with your product or service
    • Identify your customer base
  2. Solution/Technology
    • Explain the solution to the problem you just described
    • Identify how your solution or the “secret sauce” solves the problem
  3. Features & Benefits
    • What features does your product or service have that are unique?
    • How do these features compare to your competition?
  4. Market Opportunity/Go-to-Market Strategy
    • What is the opportunity in the market for your product or service?
    • How do you plan to capture that market, what percentage of it?
    • Explain your Go-To-Market strategy
    • Explain how you define your total addressable market
    • Explain how you plan to scale the business
  5. Business Model/Current Traction
    • Demonstrate exactly how you plan to monetize your solution
    • Discuss any current customers that are using your product or service
  6. Competition
    • Provide a competitive landscape to differentiate your share of the market
    • Compare your features and benefits with the competition
    • What are the barriers to entry
  7. Financial Projections
    • Demonstrate an understanding of your financial model
    • Demonstrate you can run your company with capital efficiency without sacrificing development milestones
    • Financials should include current and forecasted revenue
      • Profitability, Margins, customers or units sold
  8. Management Team
    • Briefly provide an introduction to all key members of the Management and Advisory team
  9. Product Development Timeline
    • Provide a timeline for key development milestones
    • Outline future funding needs and timelines
  10. Proposed Deal Terms and Use of Funds
    • Explain how much you are raising and proposed use of funds
    • Briefly outline the deal
    • What is your exit strategy?

Feel free to adjust these concepts to fit your market and business model and expand the more complex concepts, or the ones that are crucial to your business model, into multiple slides.

Keep in mind that pitching is mainly about content and confidence. Thus, taking the time to develop a strong narrative and a well-organized a pitch deck can help you identify any holes in your business model and eventually create a stronger investment opportunity for prospective investors.

If you get stuck, reading through these blog posts will help and inspire you!

Additional Tips

  • Practice, Practice, Practice. A large part of a successful pitch is your ability to convey confidence and that comes from being prepared. Don’t memorize your full script since your pitch will sound stiff and over rehearsed. Instead memorize the key points you want to make for each slide and the transitions from slide to slide. This way your pitch will sound conversational but you will be able to make all of your main points and smoothly transition between slides.
  • As you are developing your pitch print out your slides and hang them on a wall. That you can see the whole narrative and how the slides fit together. Too often people focus on the individual slides and fail to look at whether or not there is a natural flow to the narrative.
  • Always send files to prospective investors as a PDF since they are the easiest files to open across operating systems and devices (mobile vs. tablet vs. desktop). Also, clearly label your files with the company name, type of file, and date. Remove all “internal” file name notes- version number, initials of edited it last, etc. For example, use pdf as opposed to Investor_Pitch_v13_jcs_edits_email.ppt.
  • Most investors don’t have Keynote or Prezi, so there is value in creating all of your investor pitch decks in PowerPoint. Otherwise you will have to convert them to PDF and will lose out on some of their more visually appealing features.
  • In your live investor pitch limits animations and slide to slide transitions, do not include videos (other than product demos), and do not take a break for a live product demo. Animations and complex slide transitions can be a distraction to prospective investors. You want the investors focused on what you are saying during the live pitch and not what’s going on with your slides. Also, investors want to hear about the investment opportunity or product/solution from you not a pre-recorded video. And it never fails that a technical difficulty will ruin a live demo or that a live demo will run too long. So instead include a short video of a pre-recorded demo to ensure that you can highlight all of your product features within a reasonable amount of time.
  • If you are presenting to a group of investors, like an organized Angel Group, and are given a strict time limit for your presentation be sure to wrap up your presentation within that time frame. In these types of settings going over your time limit will reduce the amount of time you have for investor questions and that is a portion of the pitch can be even more important than the actual pitch itself, since it gives you an opportunity to address any of their concerns/comments directly.

Best of Luck!

Jack Scatizzi

jscatizzi@itenstl.org

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