“The Best Startup Pitch Deck for Getting Funded”
When you’re pitching your startup idea, angel investors and venture capitalists don’t want to hear a sales presentation. A pitch is a different type of presentation than you probably have ever done before. If you are presenting wrong, you decrease the odds of getting funded. So how do you know the best way to pitch? I’ve found the perfect pitch deck format and we teach it to startup founders at Seed Sumo every year.
“Investors don’t really care about your product...”
The best pitch format is not a sales presentation. You’re not trying to convince someone to buy or use your product; you are trying to convince them that your company is a good investment. To do that, an investor will have to understand the entire deal...not your features. This means you will cover information that you typically skip over or don't even think of when talking about your product with a non-investor audience.
When pitching you may be presenting to a mixed audience. However, always remember that your “customer” in this presentation is an investor. That means you can safely ignore anyone else who may be at the event. Your target audience will be the group of people who write checks to startup companies. They're the ones that you need to make sure that they get what they need from your presentation. For that reason if someone is coaching you on how to pitch your company, they need to know exactly what an investor is looking for. Otherwise, don't listen.
My primary problem with most of the pitches that we see in the startup community is that founders focus too much on the product. What you need to understand is that for investors, they really don't care about your product. So then you would ask, "What do they care about?" They care about the deal… and the opportunity to invest as it relates to all of the other deals that they see and evaluate. You are going to be stack-ranked against these other deals.
“Investors want to know why this company needs to exist in the first place...”
Most startup founders are more connected to their products than anyone else because they spend a lot of time there. This can be a detriment when you're trying to explain it to someone who doesn't understand it. Founders seem to have a natural tendency to want to talk about the product and features, but an investor wants to know why this company needs to exist in the first place. That’s a very different conversation. You have to first start with “why”.
If you think about your thoughts along a continuum, when you first had the idea you were at a 1 and then you learned more and more about your idea and you are a 2 and as you introduced all these features you got to a 3 and “now it would be cool if we added this feature, and we could do this and we could do that” and now you are over here brimming with excitement at a level 10, but the investors and the other people that you talk to when you're talking about your product are still back at zero. They don't know what the hell you're talking about. You have to remember to go back, reconnect with them at the beginning, and have them understand why you're so excited.
The perfect pitch is one that tells a story that naturally flows from beginning to end. The beginning may surprise you, but it has nothing to do with your team or even your name. No one cares who you are until they care about the reason why your company needs to exist.
Here’s an example:
“ No one cares who you are until they care about the reason why your company needs to exist.”
I know a couple that has a cure for dyslexia. Depending on the research, dyslexia affects between 7 and 12% of the population of the world. Dyslexia is a serious challenge for children who have difficulty learning. They can be made fun of, they can even be told that they are stupid or that they’ll never be anything in life. You'd be surprised by how many schools and universities have said those exact words to the parents of dyslexic children.
Imagine the power of being able to remove the stigma, and the challenges, and the negative effects that come with having dyslexia. What would that do for someone's spirit and perspective on life? What would the world look like if you knew that there was a cure for dyslexia that was available to everyone.
Can see this is a very powerful idea?
Now at this point I have not told you anything about the product or how it works. However, I hope that you can see these things:
- This is a problem that needs to be solved
- The cure for dyslexia would make the world a better place
- Both dyslexic children and their parents would desire a solution
- It affects a huge population
Yet while you still don’t know what any of the features of the product are, hopefully you get the “why”, and would want to know more if this is something that interests you.
So where do we go from here?
“Imagine the power of being able to remove the stigma, and the challenges, and the negative effects that come with having dyslexia.”
I have included a pitch deck template that I believe to be the best format available. It has been my favorite for a very long time, entitled The Pitch Deck Coach. Created by pitchdeck.com, and inspired by Dave McClure - 500 Startups founder, airbnb, Crowdfunder, Guy Kawasaki and Venture Hacks. I always teach from this format to help startup founders craft a story that follows the 12 steps listed in the Pitch Deck Coach template.
Here's a link to the Pitch Deck Coach Template.
When working with startups, we usually begin by drawing 12 squares on a big whiteboard and title each one:
- Problem
- Solution
- Product
- Business Model
- Traction
- Market
- Competition
- Growth
- Financials
- Team
- Funding
- Summary
Then we go one-by-one and fill out every single square on the white board until we’ve got the basic flow down and are comfortable with what will become the first draft. Each square gets a rough approximation of a graphic and a message that will best convey that point of the pitch. Each slide in the format is setup to naturally transition into the next.
Here’s an example of one that I did with CarForce during the 2015 Seed Sumo cohort:
Self-explanatory right? You don't have to have good handwriting or even be able to draw to get started.
“Ideally, you could pull out any one slide and turn it into its own mini pitch so it’s self-explanatory and separate from the rest of the presentation.”
One benefit of this format is that it gives you the ability to gather all of your thoughts together into one place about of each of these twelve areas. The advantage of grouping thoughts this way is that you will be able to succinctly describe each aspect of the business much more clearly, which will also increase your odds of getting funding. If someone is talking to you and they say "Now tell us about your business model again” you know how to pitch the business model because you’ve already put all your thoughts together into one place on that subject.
Ideally, you could pull out any one slide and turn it into its own mini pitch so it's self-explanatory and separate from the rest of the presentation. This allows you to have an intelligent conversation about each aspect of the investment opportunity and get feedback on the strength of each section.
If you look at your pitch deck and you find that it’s mostly talking about your product or features, then you’ll probably find that investors will show less interest in asking for a term sheet. And I promise you that if you follow this guide it will help people become educated in your industry or in your company. At the very least, you will help them become educated in the value of the opportunity which will help you stack rank better against other deals that they are seeing which can increase the odds that you can get funded.
I'm also including a sample pitch deck from a real company. Probably one of the best pitch decks I have ever seen, from a company called Kindara. I have and will continue to pitch the Kindara company even though I don't know anyone there, I have never met anyone from the company, I have never physically seen their product, and I am not a customer of their product. I have only seen this excellent pitch deck.
It is put together so well that I probably can pitch it better than they can. It's just really, really simple. Not only is it beautiful and elegant but also it has a really nice flow. I would encourage you to look at this as an example.
I hope this has been helpful to you on your journey to pitching your way to funding bliss. If you have any questions or comments, please free to contribute to the conversation.