10 Slides Every Pitch Deck Needs

This is a Guest blog post from Andre Averbug, an entrepreneur, economist, and writer who has been helping entrepreneurs prepare for their investor pitches for several years.

0. Title

Before the content slides, you need a slick title slide to catch people’s attention from the get-go. Include your company logo/name and perhaps a great picture that represents your mission or broader vision. I like it when companies also include a short sentence, such as a slogan or value proposition, that already gives the audience an idea of what the company is about. Mint’s title slide from its 2007 pitch is a great example.

1. Problem

Every startup should be focused on solving a particular problem – big or small. The first slide is the place where you explain what the problem is with facts and numbers. For ex, Breakthrough, a company that provides mental health services, laid out a clear problem statement that set the stage for why its business mattered. You can also focus the discussion of the problem on a typical customer or beneficiary, to make it more personable (“Mr. Smith has mental health problems, but he doesn’t feel comfortable sharing his illness with others and seeking help…”)

2. Solution

After the problem, of course, comes the solution. What is your company doing to solve the problem? This could be framed as a value proposition or the company’s broader vision but should also include specifics as to how your product or service is making people’s lives better. Gleamr, an app that provides professional auto detail on-the-go, laid out its solution very clearly.

3. Product / Service

Now is the time to describe in detail how your product or service works. Include screenshots, images, graphs, anything that helps the audience understand what is it that you’re offering. If the product is not ready yet, include pictures of the prototype or wireframes. If you provide a service, include a simple schematic showing how the service works. The example below is from Airbnb’s first pitch deck.

4. Business Model

Every investor will need to know how you plan to make money with your business. Explain how much you are charging your clients, for which offerings and, if other partners are involved, who takes how much of the profits. Gleamr makes it all very clear with a simple infographic.

5. Market Opportunity

How big is the potential market for your product or service? How many people in your country, region or even world could become paying customers? Talk about your target market, their overall characteristics and preferences. Learn about the concepts of TAM, SAM and SOM. Airbnb’s example below is good, but I personally prefer to present market size figures in dollars. Therefore, I would multiply the 84 million SOM (share of market) by the average amount charged for a trip (for ex, if the average trip is $100, total SOM would be $8.4 billion).

6. Marketing

You need to show investors you have a clear plan to attract and retain customers. What is your go-to-market strategy? How will you reach out to potential customers? Will you use social media, paid ads, attend conferences, blog etc.? Gleamr actually went beyond and included information on “staying competitive”, with insights about product development – however, in most cases, focusing on marketing and sales and saying a few words about keeping customers is enough.

7. Competition

Who are your (direct and indirect) competitors? Never say you don’t have any, it is simply not true! How do you differ from them? What is your competitive advantage? To convey the message in a clear way, many companies use graphs plotting down competition across different axes (e.g.: price, quality, speed, customer experience) or a table that compares specific features across products.

8. Traction (and/or Financials)

What have you accomplished so far? Let numbers tell the story. How many active users and paying customers do you have? How much revenue? Have you broken even yet? What is your EBITDA margin? If you’re very early stage, what partnerships have you developed? Have you won any relevant award (e.g.: innovation, product development)? Have you been selected to an accelerator/incubator? Do you have an MVP? Have you run a successful pilot and, if so, what were the results?

9. Team

Many investors bet more on the jockey (i.e., entrepreneurs) than the horse (i.e., company). But even if they don’t, you need to show them you are the best team out there to execute this wonderful business plan. Include up to 5 people maximum and be sure to use nice pictures and include short bios in bullets. This is a good time to share your passion for what you’re building and talk about how great you complement each other and work together.

10. Financial Projections and Ask

Finally, it is time to show what you plan to accomplish in the next few years and what you need to get there. Include a table or graph showing your financial projections (revenues and EBITDA or net income should suffice for a short pitch) for the next few years – I personally stop believing in year 3.  Explain how much money you need to reach your goals. Include a use-of-funds table or pie-chart, such as the one below, to show exactly how you plan to spend the funds you’re raising.

Finally, if you didn’t have your contacts and company website at the bottom of each slide, you might want to wrap up the presentation with a “Thank you!” slide including contact information.

The slides above and their order are of course suggestions only. The ultimate number and content of slides are dependent on the time available to present, whether you are presenting in an event with multiple companies and investors or to one investor only, if the audience already knows your business, among other factors. In any case, I consider these ten pieces of content to be the backbone of most investor pitches.

Good luck!

Image: freepik.com

Andre Averbug is an entrepreneur, economist, and writer. He has over two decades of international experience working in the intersection of economic development, entrepreneurship, and innovation. He has worked and lived in multiple countries across North and South America, Europe, Africa, and Central Asia.

Andre has started and run four startups, in Brazil and the US, and was awarded Global Innovator of the Year in 2009 by World Bank’s infoDev. He has extensive experience supporting companies as mentor and consultant, both independently and as part of incubators such as 1776 and the Kosmos Innovation Center, and programs like Shell LIVEWire, StartUp Weekend and WeXchange.

As an economist, Andre has worked in topics ranging from innovation ecosystems, entrepreneurship and MSME development policy, competitiveness, business climate, infrastructure finance, monitoring and evaluation (M&E), and country assistance strategy for the World Bank, the Inter-American Development Bank (IDB), and the Brazilian Development Bank (BNDES). He has also consulted for clients such as DAI Global, the Economist Intelligence Unit (EIU), TechnoServe, among many others. He holds a master’s degree in economics from the University of London (UK) and an MBA from McGill University (Canada). Andre lives in the Washington, DC area.

He writes an awesome Blog called Entrepreneurship Compass and you can sign up here: https://entrepreneurshipcompass.com

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Be Unique, Get Funded

This is Guest Blog post from CONNECTpreneur Coach and partner Ines LeBow.

Attracting investors to get your business funded is all about being unique, even if the product you’re presenting isn’t a new invention or innovation. Earlier this year, I highlighted 7 Factors for Startup Success based on the philosophies of Shark Tank star Mark Cuban.

He believes that you need to find a way to make at least one aspect of your product or service uniquely your own. You can do so by thinking about the special characteristics your product will have, to whom you will market it, and how you differentiate it from the entrenched competitors. Trying to be the same results in competition based on price, which is not how you want to compete.

In Mr. Cuban’s own words about being unique:

Creating opportunities means looking where others are not

and

When you’ve got 10,000 people trying to do the same thing, why would you want to be number 10,001?

Not Just Socks

Socks have been around for a long time. Even the athletic sock category has been pretty saturated, but that didn’t stop Bombas from their start-up business focused on making a better athletic sock. I covered the case of Bombas in an earlier article entitled 5 Keys to Convince Investors Your Product Can Make Money.

They invested a lot of time and effort into identifying what made athletes, fitness junkies, hikers, runners, speed walkers, and other heavy users of athletic hosiery disappointed, frustrated, and annoyed about their existing sock of choice. They designed and produced their socks to address those issues, conducting significant product testing to ensure the user feedback hit the bullseye.

Successful Close

If you are an early Shark Tank devotee, you’ll know that the founders of Bombas went on the show and left with $200,000 in funding. That’s right…$200,000 of someone else’s money to launch an athletic sock. So it wasn’t about an exciting new technology product but about a unique take on a product for which there was already a defined, established market with committed customers who are continually looking to improve the equipment and accessories they use to perform their activity.

So what is unique about your product? Perhaps you can approach real-life users who are enthusiasts and get their perspective on the unique benefits your product offers. Often, it’s the little things that make the biggest impact to your target audience, which translates to how you differentiate yourself to potential investors.

To learn more on how to stand out with an epic fundraising story, contact me for a complimentary consultation by phone at 314-578-0958 or by email at ilebow@transformationsolutions.pro. You find her on LinkedIn Profile at www.linkedin.com/in/ineslebow or her ETS website at www.transformationsolutions.pro.

How Far Will You Go to Get Funded?

This is a Guest blog post from Ines LeBow.

Entrepreneurs are going to extremes to make themselves memorable to investors.

Earlier this spring, at the beginning of the pandemic in the US, I published articles on creating and delivering a digital investor pitch (“Now’s the Time to Get Your Business Funded: Coronavirus Edition”) and on featuring the sustainability of your business in any market (“Pandemic-Proof Your Funding Pitch Deck”). Some of my contacts have shared how great the advice in those articles was, but were struggling to get the opportunity to pitch or even engage with investors.

I read a Wall Street Journal article a few weeks ago called “Startups Turn to Remote Fundraising” (9/21/2020 print edition). It mentioned the lengths that many entrepreneurs are going to stand out with investors or even simply to get in front of investors. Here are a few examples:

• Elocution Lessons – A start-up CEO took voice lessons to improve his speech, tone, emotion, and inflection to be more compelling and effective on voice and video calls.
• Guitar Playing – A founder played his acoustic guitar to the Eagles song “Hotel California” during a fundraising meeting.
• Custom and Animated Backgrounds – One executive even built his own solution to create animated and custom backgrounds for video calls that turned into its own startup that got funded.
• Highway Billboards – An entrepreneur advertised his start-up idea on several miles of California highways frequently traveled by Silicon Valley investors using the Adopt-A-Highway program.

Initially, I got a really good chuckle. Then I thought about it more and realized that these were examples of people who inherently understood that they needed to stand out to the investor audience. To do so, they needed to do something different than all the other entrepreneurs. As Dr. Seuss famously said, “Why fit in when you were born to stand out?”

Investors are still investing. But, more than ever, entrepreneurs need to do something to capture and hold their attention and stick in their minds.

What are you going to do to stand out?

To learn more on how to stand out with an epic fundraising story, contact me for a complimentary consultation by phone at 314-578-0958 or by email at ilebow@transformationsolutions.pro.

Ines LeBow is the CEO, Transformation Executive for ETS. She is a known catalyst for business operations, bringing 30+ years of hands-on experience. Ines has a long history of being recruited into senior executive roles to improve the execution of business operations and to drive revenue growth. You can see her LinkedIn Profile at www.linkedin.com/in/ineslebow, view the ETS website at www.transformationsolutions.pro, or email her directly at ilebow@transformationsolutions.pro.

Equity or Debt: Questions Entrepreneurs Should Ask

This is another awesome Guest blog post from Andre Averbug.

In a previous post, I covered the kinds of investors that support startups. In the last post, I discussed the different types of financial instruments available to startups. But how does an entrepreneur know which type of instrument is ideal for his or her business? Let’s now turn to the main questions one should ask when trying to decide between the two key instruments – equity and debt.

Whether raising capital through equity is right for you depends on how you answer the following questions:

• Does your business have the potential to grow exponentially? Equity investors, such as angels and VC funds, will only buy equity in startups, i.e., companies that are working on scalable solutions and have the potential to increase the value of that equity substantially over the next several years. In other words, they will not invest in lifestyle businesses, which are businesses that may be successful and last decades, but without experiencing fast growth and giving investors an exit opportunity. Equity investors get their return when they sell their equity (exit) at a higher valuation to new investors, either private, such as a private equity (PE) fund or, if they are very lucky, through an initial public offering (IPO). Therefore, be realistic and ask yourself: Is my business a startup or a lifestyle business? By the way, there is nothing wrong with being a lifestyle business, and a friend or an uncle might even put some equity in it. However, professional equity investors will only invest in true startups.

• How important is it for you to retain ownership? Some entrepreneurs are overly protective of their equity and want to maintain full ownership at all costs. This is usually not a good mindset, especially if you run a startup, given that sharing ownership with investors, management, and even staff might be key to the success of the business. You will need investors to help grow your business and more partners to align interests and have everyone onboard and working for the long-term success of the company. Remember, it is better to have smaller share of a highly successful business than 100% of nothing. So, if you feel you are the overly protective type, consider rethinking your approach – otherwise, equity may not be for you.

• Do you work well with others and welcome mentorship and opinions? When you get equity partners you are embarking in a relationship that you don’t know how long is going to last and how smooth (or rough) it will be. Angels and VCs, particularly, will want to participate in key business decisions and often mentor you. They will likely want a seat at the Board. To maximize the chances of success for this relationship, be sure you can take opinions, you welcome feedback (constructive and sometimes not so much), and that you can share some of the decision making. Remember these investors are literally betting on you. They are putting money in the early stages of your venture, when risks are extremely high, and deserve – in fact, usually have the right – to have their voices heard. It doesn’t mean that they are always right and that you should avoid disagreements. Simply be open to healthy discussions.

• How much support do you need, on top of the money? Equity investors usually bring a lot more than just money. They help you with corporate strategy and business development, open doors through their Rolodexes, provide industry knowledge, sit on your side of the table in major negotiations, such as sales, partnerships etc. If none of that seems important to you (really?!) and you strongly believe in your ability to grow the business on your own or with your current team, then perhaps taking a loan – if you can – would be the best approach. That is because, if your business is indeed successful, it means your equity will gain value over the years, and the cost of selling equity should be higher than taking debt.

When it comes to debt, these are some of the important questions to ask:

• What is your current (and future) cash flow situation (projection)? You should not take a loan if you are not confident in your ability to commit to debt repayments, including interest and principal. If you are in the earlier stages of your company, have not broken-even yet, and don’t see it happening in the near future, perhaps debt is not for you. Debt requires some degree of predictability in your financial situation to ensure you can service it accordingly. For that reason, it is not a very popular instrument for early-stage startups (unless when offered in hybrid instruments such as convertibles), being more suited for later-stage companies and lifestyle businesses.

• Do you have collateral (assets), credit history, or receivables? Banks and other lenders may still give you a loan if you don’t have enough cash flows. However, they are notoriously risk averse and will only provide you with a loan if they are comfortable with their ability to recover their loan, even if it means acquiring your assets to cover or minimize their loss. Therefore, even if you think debt is the right instrument for you, if you don’t have enough revenues, promising receivables, a credit history, or some collateral (machinery, building, inventory etc.) to borrow against, chances are you will not be able to get that credit.

• Are you comfortable using collateral, including personal assets? When it comes to collateral, the question is actually deeper: It is not just whether you have it or not, but also if you are willing to borrow against it. Some entrepreneurs believe so much in their business that they literally bet their car or house on it! Even when the company itself does not have assets, the entrepreneur uses his or her own property as collateral providing personal guarantees to the bank. This is certainly not for the fainthearted and doesn’t make sense for everybody. Also, tragically, sometimes entrepreneurs expose personal assets without knowledge. Be sure to check the laws and regulations in your country to see whether your company provides you with limited liability or if creditors could go after your personal assets in case of debt default.

While this list of questions is certainly not exhaustive, it covers some of the key issues I had to ask myself during my fundraising experiences. If you have more ideas for questions, feel free to share them in the comments below!

 

Andre Averbug is an entrepreneur, economist, and writer. He has over two decades of international experience working in the intersection of economic development, entrepreneurship, and innovation. He has worked and lived in multiple countries across North and South America, Europe, Africa, and Central Asia.

Andre has started and run four startups, in Brazil and the US, and was awarded Global Innovator of the Year in 2009 by World Bank’s infoDev. He has extensive experience supporting companies as mentor and consultant, both independently and as part of incubators such as 1776 and the Kosmos Innovation Center, and programs like Shell LIVEWire, StartUp Weekend and WeXchange.

As an economist, Andre has worked in topics ranging from innovation ecosystems, entrepreneurship and MSME development policy, competitiveness, business climate, infrastructure finance, monitoring and evaluation (M&E), and country assistance strategy for the World Bank, the Inter-American Development Bank (IDB), and the Brazilian Development Bank (BNDES). He has also consulted for clients such as DAI Global, the Economist Intelligence Unit (EIU), TechnoServe, among many others. He holds a master’s degree in economics from the University of London (UK) and an MBA from McGill University (Canada). Andre lives in the Washington, DC area.

He writes an awesome Blog called Entrepreneurship Compass and you can sign up here: https://entrepreneurshipcompass.com