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An expert guide on what to include in your seed investment pitch deck by startup marketing and design specialist James Church, COO at Robot Mascot.
When fundraising for the first time, knowing what to expect when talking to investors and how to go about raising money for a startup can feel a bit mind-boggling. At Robot Mascot, we specialise in helping startups create an exciting pitch narrative for investors with, and in this article I’ll be guiding you through how we do that.
The clue is in the name, you should be able to cover all these points on a quick elevator ride, so it needs to be short. I’m talking around 100 words max. So you’re going to need to cut the waffle, and get straight to the point.
Looking back over the structure of your value proposition is a great way to start thinking about your elevator pitch. If you’ve not crafted a value proposition yet, download this free value proposition template which helps you to do just that.
Ideally, your elevator pitch will cover the following things:
• What the product is
• Why the product matters
• What the company stands for
• What makes the product different (USP)
• Who the product is for
Remember your pitch is not about showing off how clever you are. It’s about making a business case to someone who wants to give you some money now, hoping that they will get a larger return in the future than they would by keeping their money in the bank. Pure and simple.
So the job is not so much to convince them that your business idea is innovative, or that you’ve created something really complex. It’s to convince them that you’ve created something that people want, that can make big profit, has a clear route to market, and most importantly that you and your team can make it all happen.
With that in mind, here are the main areas you will want to cover in your pitch:
Explain to investors the main problem you are trying to solve, and why a solution to this problem is so important. You should be able to prove this by showing evidence from the research, tests and experiments you have conducted to prove your business model. Try and focus on just one problem – you want to show investors that you are focused and dedicated to resolving this issue.
There might be more than one problem. In YouTube’s original pitch deck, they included four.
Explain to the investor how your product is going to solve this problem. Your solution needs to be clear and concise – this is where many startups fail. All too often the explanation of the solution is too complex and long-winded, or it uses industry terminology that the investor doesn’t grasp. Instead, briefly describe what your idea is a sentence and boil it down to its core benefits. Focus on the reasons the customer would want to use it – rather than trying to over explain the technology involved. In this pitch deck that helped Mixpanel raise $65M, their Solution slide had two very short sentences.
You can, show sketches, prototypes, screenshots or the product itself, to help investors visualise what you are creating.
Make sure you outline who you are going to be selling your product or service to, and give the investors an idea of the market size. They want to see that you have found a realistic market that is big enough to sell your product and make a profit. In this part of your pitch deck it’s important to have facts to back up your claims.
Example from Fitter’s Pitch Deck, which gives a summary of engaging metrics about the industry.
Prove to investors how much money they are likely to make by sharing your plans for the future along with your 3-year financial projections. If you need some help with this you can talk to an accountant or try it yourself by downloading this 3 Year Financial Projection Calculator. These figures will give your investors an understanding of your expected business growth and potential outcomes. When you consider this, it’s always better to be on the safe side and over-deliver than it is to over-promise and not hit your targets later down the line. That said, the projections need to look attractive enough to make an investor part with their cash. It’s all about getting the right balance between your ambition and what’s possible in reality.
Show evidence of your achievements so far and the progress you have made. Show your investors what you have learnt and how you have improved your startup and made it stronger. The most successful pitches are those where startups show they are progressing well, already earning money and have the potential to make even more money with investment.
A lot of investors buy into the team more than they do the idea. If you have a great team and great advisors, investors are going to pay attention. In the early stages of a startup they know that the idea can change and you may not end up taking to market the concept you started with. However, if you can prove you have a strong, adaptable team with a range of different skill sets they are much more likely to believe that you will make your company a success – and them a return on their investment.
If you do have gaps in experience amongst your core team, bringing on an advisor can be an excellent way to beef up your investability. If cash is tight, you can always remunerate them with equity (shares or options). Here’s how much equity startups give their advisors.
The deck itself should contain minimal information so that the main focus during your pitch is on you and what you are saying. Rather than paragraphs of text, try using bullet points that act as headlines for what you will be talking about in that part of the presentation and expand on these points verbally. This will help investors better follow, understand and remember your pitch.
Make sure your deck is well designed, so that it stands out from the countless others they will see each week and ensures yours is remembered. A professional format and great design will help make a good first impression and show investors that you care about the project and are serious about your venture.
There is often confusion about how much content a pitch deck should contain. Some will say a pitch deck should contain minimal information and act as a backdrop to your verbal presentation, others will say it needs more detailed information so it can be emailed to investors and they can fully grasp your idea. You may also hear the terms investor deck, presentation deck and investment prospectus thrown around.
The truth is, there is no ‘correct’ way. It really depends on your intended use and the type of fundraising you’re undertaking. For example a pitch deck for presenting to angels will be different to one used in crowdfunding. But each will most likely be referred to as pitch deck.
At Robot Mascot, we define a pitch deck as a deck with minimal information which acts as a backdrop to your verbal presentation. It articulates the key points on each slide so that an overview of your business can be understood when not presenting, but also allows each point to act as a cue for you to further explain your business model.
We define an investment prospectus as a deck with larger amounts of content. Here you have more detailed charts and graphics, more pages and paragraphs of text support each key point. These types of decks are intended for use in crowdfunding campaigns or to act as leave behinds following a verbal pitch as a reminder of your business to investors.
They key, as with any brand communication, is understanding the context your deck is to be used. This will determine how much content you’ll need on each slide. Either way, whether you’re producing a pitch deck or investment prospectus, the same rules apply. Each must make a convincing business case, look professional and explain your idea clearly and concisely.
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Robot Mascot specialise in helping startups perfect their fundraising materials, so they are in a much stronger, and more confident position to secure the vital funds they need to grow. We help startups better explain their business idea and construct a pitch deck that informs and excites investors.
If you would like a free consultation to discuss your pitch, please get in touch.