Creating an award-winning and investor friendly pitch deck requires exercising a delicate balance between art and science.
The artistic component represents the thematic style of the presentation. This includes the visuals, the fonts, colors, and design elements that make a pitch deck distinctive and unique to the particular business. The scientific component represents following a standardized deck format and slide order that is recognizable and comfortable for investors to understand.
Here, we examine common best practices to developing an effective pitch deck.
A popular general rule advocated by Guy Kawasaki to follow for developing great pitch decks is the 10/20/30 rule. The pitch should have 10 slides, last no more than 20 minutes, and contain fonts of at least 30 points in size.
Ten happens to be a magic number for a pitch deck because human beings & venture capitalists typically struggle comprehending more than 10 concepts in a meeting. It is important to keep the pitch deck to 10 slides, as more than 10 will demonstrate poor preparation and understanding of the venture capital ecosystem, and reflect poorly on the entrepreneurs business acumen, or ability to keep things clean and concise.
Keep any presentation to 20 minutes. Not only does that afford 2 minutes per slide, but entrepreneurs must be prepared for questions and time to answer them, as well as time to set-up the presentation, and time for people to settle into the room prior to the presentation. Entrepreneurs are typically given an hour to present and meet with venture capitalists.
The time after the presentation is of the highest importance as it allows for continued conversation, more detailed explanations, and moments to share insights into the different personalities in the room. Entrepreneurs should try to learn as much as they can of the venture capitalists who are vetting their presentations. Doing so ensures a higher probability of successfully managing the relationship and potentially securing an investment.
This is a simple, but essential point. Many presentations display information in 10 point fonts. This font size is next to impossible for venture capitalists to read, and the small font encourages bad habits. The first is forcing too much text into the slide, and the second is that the jammed text encourages entrepreneurs to read form the slides. Both are huge missteps, presentations decks is a “less is more” exercise.
Keep the text as absolutely concise as possible, and never read from the slides. Once the audience figures out the entrepreneur is reading from the slides, they will read ahead and become out of synch with the presenter.
When developing a pitch deck, it is important to remember that the purpose of the presentation is to stimulate interest, not to cover every aspect of the start-up business, which can often overwhelm an audience.
The objective of the Pitch Presentation is to generate enough interest among the Venture audience to receive positive feedback about your business and secure a second meeting.
The industry standard of 10 slides is intentionally designed to force entrepreneurs to focus on the essentials.
Entrepreneurs can elect to add more slides, depending on the complexity of their business, however more than 15 slides is unadvisable. Ultimately, the more slides an entrepreneur needs to explain their business, the less compelling the business idea is to a target audience.
The Ten Slides
Each slide should have a defined message and purpose. On each slide, cover only the most essential information, and be prepared to expand on the subsequent topics introduced here for each slide.
1. Begin with a compelling headline that excites an audience and provokes their curiosity in less than 12 words.
2. Follow up with introducing the problem or opportunity the business aims to solve. Describe this in the simplest terms possible, and in bullet points.
3. Expand on the problem by explaining why it is a valuable opportunity. Share who the target audience is, who will buy the product/service, any demographic information, and whether the business serves a Niche or Mass market.
4. Share what the unique advantage of the business is; technology and/or people. Why customers would choose this business over any competitors, and explain what makes the business unique among any existing competitors.
5. Explain in simple terms the business model and how the business will generate revenue.
Popular business models include; single sales, repeatable sales, subscription service, freemium to premium models, add-ons, advertising, licensing, commissions.
6. Share how your business will enter the market, what resources it will need to succeed, and how the business will connect & interact with customers.
Resources internet companies typically leverage include; open source platforms, SAS, existing platforms, programing talent, UX/AI specialists, business development talent, agile product/project experts, user generated content, crowd Sourcing, etc...
The different ways technology companies can interact with customers include; SEO, SEM, SMM, internet advertising, public relations, blogs, press releases, events, demos, conventions, TV ads, radio ads, magazines, newspapers, direct mail, flyers, polls, surveys, beta testing, & CRM platforms among others…
7. Next, introduce the closest competitors to your business, and briefly share their strengths and weaknesses. Diagrams can be helpful for this topic. Placing your company logo in the center of the slide with four arrows emanating from the center towards different common competitor characteristics can be an effective visual method of displaying competitor differences.
8. Briefly describe your company's management team. Characterize each person in 6-8 words and broadly explain why they are the right leaders for the business. Consider including any relevant advisors and board members if they add value to your presentation.
9. Share the most relevant financial projections of your business. Explain the costs to developing the business, and how the money your are trying to raise will be used. Consider pro-rated fixed costs, variable costs, economies of scale & scope. Include the key metrics of the business and how the leadership will measure continuous customer feedback.
Popular key metrics include; A/B testing, continuous deployment tests, SEO, SMO, landing page conversions, new customers, demographics, approval levels, rejections, pending statistics, existing customers, repeat behavior, attrition, sales projections, customer lifetime cycle & value, and of course any revenue already being generated.
10. The last slide can cover a variety of topics including; current accomplishments, a product or business development timeline, outside support being used or to be leveraged, and/or how the business will make use of new funds.
The last slide offers entrepreneurs the most freedom, so it is up to the entrepreneur(s) to determine what last information would benefit their specific business and presentation objective.
Examples of outside support include; supporters, networks, cloud SAS, incubators, accelerators, backers, investors, advisors and marketing platforms currently employed.
A great presentation flows from one subject to another seamlessly. Achieving this requires practicing the lecture component of the presentation with variety of audiences to flush out all the pain points.
Entrepreneurs should practice until the presentation comes to them naturally. The way they can ensure that the lecture component follows the slides and leads the audience in a coherent and measured way.
A note on liquidity:
No entrepreneur knows when, how or if the business will achieve liquidity, and yet many entrepreneurs include a slide explaining, “there are two liquidity events: an IPO or an acquisition”. This is an obvious reality. If investors ask about your exit strategy, it means they are clueless. If business leaders respond with these two options, it is an indication that both parties have a common perspective of the Venture Capital industry.
The best presentations generate questions about additional company specifics, not about what is being displayed or shared in the presentation itself.
Questions about the actual presentation are good indicators that the deck lacks clarity and needs to be revised for improvement.
Business leaders should consider employing the help of design conscious individuals to help them create a visually simple and clear presentation. As with everything else in business, appearances really matter.
There are many great business ideas swarming around the world, but few truly great presentations.
Ultimately, creating a great pitch deck and overall presentation represents the first thing investors vet about any possible venture. Therefore, creating a visually stunning deck that effectively tells a clear and inspiring story should be among an entrepreneur's highest priorities.
Invest more than enough time into creating your pitch deck, and test, test and test it.
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