Slides are designed to convey a large amount of information in a short amount of time. The best way to think of the slides is as waymarkers toward how you are telling your story. Each slide is a topic, and you need to hit specific issues for your account to be complete. In later chapters of the book, I’ll talk through each item you need to cover in your presentation in more detail; in this chapter, I want to talk a little about what an investor needs to know and how you organize that story.
What are the slides you need in a fundraising pitch?
Most pitches follow roughly the same order. No rule says you have to include everything. You don’t even have to have them in any particular order. The following overview is a pretty good starting point for figuring out your narrative.
For some stories, you can combine several points onto the same slide or part of the story, but in general, these are the points you should try to hit.
The problem – On the problem slide, you will explain what the problem is, why it is a problem, and who is experiencing this problem. Don’t assume that the audience knows your industry. For some companies, the “problem” describes a specific pain point, such as “Taxes are too difficult to understand,” “Athletes are struggling to measure their performance,” or “Credit card fraud has gotten out of hand.” For other companies, the “problem” is more nebulous. If you are a gaming or entertainment company, the “problem” you are solving is boredom or a desire to be entertained.
The solution – The next part of the story is what your solution is to the problem at hand. For some narratives, it is appropriate to talk about the product you are building here, but in my experience, talking about the solution in the abstract makes sense. For example, if the problem you are solving is that credit card fraud is rife, you could talk about your specific solution. However, you’re talking about building a multibillion-dollar company, and the product you are making right now is probably only a small part of your vision. If that applies to you, the solution slide is your opportunity to talk about the full breadth of ways of solving the problem. At the end of this narrative arc, say something like, “That’s our full vision, but to get our foot in the door, we are focusing on a specific part of this problem first…,” which takes you to the product you are building now.
The product/service – If your “solution” story arc talks about the broad vision for your company, the “product/service” part of your pitch gets more detailed. Here, we want to learn more about what your solution does and how that benefits your customers. Two caveats here: One, your product could pivot further down the line as you learn more about the market, so don’t commit too hard to this exact implementation of your product or service. Two, you are buried deep in the company, and the product is probably at the top of your mind. What interests your investor is how this is going to make money in the short, medium, and long term. It’s incredibly tempting to dwell here, but my top tip is to give broad strokes—you’ll get a chance to get into detail later.
Market size and trajectory – In this part of the story, you are answering two questions: how big is the market you are operating in, and is the market growing, stable, or shrinking?
Team – For early-stage companies, this is, by far, the most critical part of the story. You may convince investors that you have an excellent solution to a fundamental problem in a large, rapidly growing market. None of that matters if you don’t have the chops to pull it off. Don’t be shy when talking about your accomplishments and those of your team.
Traction – “Traction” in a startup context is whether your company is moving in the right direction. There are many ways of measuring progress in a startup. The best measurement would be revenue and, ideally, exponentially increasing revenue. There have been examples of companies raising money with a single slide, and it’s almost always the “traction” slide. If you have been growing your revenue 15% week on week for a year straight, it doesn’t matter what your business does or who is involved; you’ll raise money. We will discuss traction in greater detail in Chapter 10.
Why now – If there is a timeliness to your company, include a “why now” slide. This part of the story connects the historical dots for why your company makes sense right now. Drones and VR, for example, couldn’t have happened until smartphone manufacturers moved the needle for cheap, powerful, miniaturized technology. The electric scooter rental tech became possible because it suddenly became cheap to combine GPS and controller technology with electric scooters. If regulatory, macroeconomic, or technology makes your company possible now when it would have been unfeasible 6 years ago, include that in your story.
Business model – At the most basic level, the business model describes the following: How will your company generate revenue? Do you make one-off sales, or will you have ongoing subscriptions? If you have multiple sales channels, what are they, and what is the breakdown you are envisioning? Do you have a hybrid model (i.e., sell a product and a subscription)?
Pricing model – For some companies, the pricing model is so simple that you don’t have to cover it separately from the business model. If you are creating hardware, or if you have significant capital expenditure per sale, it’s worth breaking that down in more detail: What is the cost of goods sold (COGS)? What is your bill of materials (BOM) cost? What is your customer acquisition cost (CAC) to lifetime customer value (LTV)?
Go-to-market strategy – On this slide, explain how your customers will find you. Are you relying on advertising? Would building a sales team make sense? Are you relying on affiliate sales, influencer marketing, or content marketing? There are no wrong answers here, but including a robust go-to-market narrative shows that you know how to think about what it’ll take to bring your product or service to market. In particular, you’ll want to ensure you cover what the “beachhead” market is—which market will you tackle first, how will you reach them, and how will this help you unlock additional markets?
Market landscape/competitors – If you’ve found a problem worth solving, you have competitors. Maybe you don’t have anyone doing the same thing you are doing, but there will be other ways of solving the same problem—explain them here and add why your solution is better—or at least different. Also, bear in mind that you will probably have some “competitive alternatives.” For example, if you make dishwashing machines, other dishwasher manufacturers are direct competitors. It is also possible to wash dishes by hand, to use disposable plates, or to have a maid. Those are competitive alternatives—make sure you know what they are and how they impact your business.
The moat – This chapter is named after the water feature you find around castles to keep intruders out. In the context of a startup, well, it means the same thing: do you have something that prevents your competitors from coming after you? In some companies, this might be a patent portfolio. For others, it’s all about a strong, recognizable brand. For others, it may be the team, people that have skills and experience beyond any other.
The ask and use of funds – You are pitching for a reason to raise money. On this slide, you explain how much money you are attempting to raise and what milestones you’ll reach with those funds.
Operating plan – For some pitches, an operating plan is a little too in the weeds. If your investors are interested, you’ll need to talk about this soon enough, so you may as well include it. The operating plan consists of a high-level plan for the next 18 months or so of your company; what milestones will you hit in terms of product launches, user growth, hiring goals, and other metrics? Ideally, the money you ask for in your “ask” should map pretty neatly to your operating plan. If it doesn’t, you’ll need to be prepared to have a pretty good explanation.
Don’t include an “exit strategy” slide!
A lot of founders include an “exit strategy” slide. For many reasons, that’s best avoided. Image Source: Tierney/stock.adobe.com
If you do include an exit slide (see Figure 4-1), the best-case scenario is that you’ll have thought of all the same things as they have. The worst-case scenario is that you’re introducing exit scenarios that don’t make sense to the VC, for reasons you don’t have visibility into. And now, you’re on the back foot, yielding your valuable pitching time to talking about a subject you’re not an expert on and that that ultimately doesn’t matter.
The truth is you don’t know. Your exit is probably 5–10 years away. In that decade, you will learn more about your market than you’ll ever imagine. Competitors will appear, incumbents will shift, and whole universes (metaphorically speaking) will boil off into space.
In short, it’s futile to even speculate. You are going to be wrong. And if you are somehow right—that is, you were able to call what your exit was 5 years before it happened—you were probably right for the wrong reasons; there’s no extra credit for calling your shots.
The other thing to keep in mind is that exit strategy thinking sends the wrong signal: one of the ways that VCs lose money is companies exiting too early. A lot of focus on a potential exit strategy shows the investors that the founders might take a deal too early, which might make the founders wealthy but doesn’t fit into the firm’s investment thesis.
If you are pushed on your exit strategy in a pitch meeting, say something like “I am building a company for the ages. We are planning for an IPO in 7 years or less, and if other opportunities come up before then, we will discuss it with our board.” That simple statement shows a few things: You are in it for the long haul. You’re prepared to keep slogging along to build a valuable company. And you know that there’s a dynamic in place: Your board (and, by extension, your investors) get a say in any exit conversations.
What order do slides go in?
In broad strokes, the content that goes into pitch decks is pretty much the same—that’s the point, and it helps investors get a comprehensive overview of the company they are looking at quickly. We just covered that: what’s the problem, how are you solving it, how big is the market, what’s the competition, what’s your team, how much money are you raising, and so on.
In working with a ton of startups as a pitching coach, I often come across an awkward problem. Many—probably most—of the people I work with found an excellent template for a pitch deck somewhere on the Internet, and incidentally, that’s what I recommend you do as you’re working on the deck. The problem is that if you only customize the slides without thinking about the order they are in, you’ll run into issues with your story.
You don’t tell your story to match your slides—you use the slide to support and enhance your account. This has a couple of benefits: If your slides don’t work or you can’t get the computer to connect to the screen (it happens more than you might think), you shrug, and you present without slides. More importantly, the slides shouldn’t be the focus of your attention: your story is. If your Keynote or PowerPoint is stealing the show, you’ve already lost. The investors don’t need to have faith in your presentation wizardry; they need to have confidence in you.
In other words, lead from your strength. Investors see tons of pitches every day, and the temptation is always to write you off before you’ve gotten started. To catch an investor’s attention, your first slide should be something that surprises and delights.
If you have incredible traction, lead with a graph showing that. If you have the only team that could possibly run this company, that’s your first slide. Do you have patented technology? Is the problem unusual and exciting? Is the market surprising and snowballing?
The first slide is the answer to “what’s unusual about this company.” From there, tell the story the way you would tell the story. A fundraising pitch isn’t a linear story, so there are no rules to where you can start—as long as it supports a compelling narrative arc that you follow from beginning to end.
There’s no “right” order to the slides—but there is a wrong way. If you find yourself jumping back and forth in your narrative a lot, you’ve found the latter.