For many founders of high-growth startups, bootstrapping has limits. Through self-funding and the friends and family round your start-up can establish its place in the market, but significant scaling and development will often need outside capital. While Gust provides the platform to find and engage with investors, its up to you to offer them on your product and vision. The finest tool for communicating this? Your pitch deck.
Youve established a game-changing item, formed an organisation with a killer group, quit your job, and are rolling the item out to market. Your business is the next unicorn, and all is great in the world.
Understanding how to structure a pitch deck and deliver a strong pitch is important to effective fundraising, and founders frequently ask us what financiers want to see. Before we break down the contents of a good pitch deck, you must comprehend the difference between 2 types of presentations. Financiers should be drawn to you, and its up to you to deliver.
The initial moments of your pitch are vital to catching and holding financiers attention– this can often make or break the deal. Begin by introducing yourself and supplying an overview of business: Who are you? What problem does your product fix?
The introduction is about developing context. Gusts creator and CEO David S. Rose explains it as “a picture on the exterior of a jigsaw puzzle.” It lets investors right away connect your service to familiar sectors, services, etc., while also offering a beginning point to reference as soon as your pitch gets more detailed.
Some creators provide the summary in two slides: problem and option. Despite how you do it, show why the problem deserves solving, and why your company is distinctively placed to do it.
At the heart of the pitch, youre truly selling you. Financiers will not provide thousands of dollars to a business lacking great leadership. They have to believe youve put together the best people to make the idea a reality and get a sense that youre easy to work with. This slide is basic in form, but its necessary to reveal that youre qualified for the job.
Next, introduce your team. Who are you? What are your experiences? Have you interacted prior to? How do your talents fit together? Investors need to see that you understand what youre discussing which your group is capable of performing your company strategy.
Next, identify your SAM and the target market of customers most likely to utilize your product. How does your product fit in the market? If you stop working to support projections with evidence of legitimate traction, financiers will lose interest.
Particularly important to financiers is the total addressable market (TAM). As noted by David S. Rose in his book Angel Investing, if the TAM is only $20-30 million, its unlikely that your service addressable market (SAM)– the segment of the TAM that your product can in fact reach– will provide a worthwhile return on investment (ROI). Financiers generally choose market segments with hundreds of millions, if not billions, in yearly earnings.
Investors need to see what your item appears like and how it works. A live demo is dangerous, but supply screenshots of the product or do a brief canned demo. An effective demonstration assists to legitimize your financial forecasts by rapidly and clearly distinguishing your item from rivals.
Once youve shown how your item works to fix your customers problem or meet their desire, investors likewise require to understand how it reaches customers and is generated income from. Whats your company model? Investors desire to see your sales channels.
To show your products viability to investors, you need to clearly interact why and how your specific company design is well-positioned to turn a service to a particular client desire or problem into revenue. Financiers choose businesses that solve an issue to those that simply surpass an existing option. Once again, market recognition is the best determinant of your items efficacy and additional prospective and, eventually, is the simplest way to draw the attention of financiers.
Financiers will be hesitant of a product thats easily duplicated. Explain what avoids a rival from releasing tomorrow and eating into your market share.
Even if youre contending against the “old way” of doing something, you cant have a special item without understanding what youre up against. Declaring that you “dont have any competitors” is a huge red flag for financiers. Explain who or what youre completing versus. How do customers resolve the problem today? What distinguishes your item from the existing services? How does your organisation fit within the market? Be reasonable about your products advantages over competitors. For an example of how to represent this visually, take a look at this reproduction of AirBnBs original pitch deck.
Early-stage investors are particularly interested in short-term profits projections. Investors recognize your projections wont be 100% accurate. They desire to see how your business will grow and that youve put in time and due diligence preparation for it.
Investors require to comprehend how your business works. Whats your burn rate? Whats your companys performance history? Whats your customer acquisition expense? Information your businesss expenses and profits and how they will scale.
Drumroll please … This is the pivotal moment of your pitch where you tell investors how much capital youre looking for and at what evaluation. In the eyes of financiers, your appraisal is the product of a risk/reward analysis. If your business reveals more risk, its evaluation will be lower (and vice versa).
Believe of the life of your company as a stepwise trajectory. Whats the next step for your company? Specifically, what are your monetary and sales goals, and what makes up success? Break down your long-term vision for your business with defined, quantifiable milestones. Then, describe to investors what their cash will be utilized for and how it will help you reach the next turning point. They will then choose whether the percent stake you are providing is “worth it” to them after an exit.
The final slide sums up the important points of your pitch. You require to drive home why your company (and you) are worth the investment.
When making your pitch deck, be sure to continually consider these three question:
Why is this problem worth resolving?
Why are you and your group the ideal individuals to fix it?
What previous recognition do you have to show that your service can scale and grow?
While Gust supplies the platform to engage and find with investors, its up to you to sell them on your item and vision. Investors need to see what your item looks like and how it works. When youve demonstrated how your product works to fix your consumers issue or meet their desire, investors likewise require to comprehend how it is and reaches consumers generated income from. To show your items practicality to financiers, you need to clearly communicate why and how your particular company model is well-positioned to turn a solution to a specific customer desire or problem into earnings. Again, market recognition is the finest factor of your items efficacy and more possible and, eventually, is the most convenient method to draw the attention of financiers.
For more on how to make a terrific pitch to investors, take a look at David S. Roses TED Talk, “How to pitch to a VC.”
Keep in mind: the material of the deck is truly only half of the formula. Youre selling yourself just as much as the product. Having the confidence and charisma to own your pitch and impress investors is the most crucial– and challenging– part of the pitch. This isnt a simple deal; its the very first step in a relationship.