OK, startupers. You’ve made a great product. Your team is perfect. The market is ready for you. Or you’ve almost run out of money. Now it’s the time to raise some funds.
You need a good pitch deck. No, it is not simply about writing ten clever sentences about your great startup. And no, this is not about making a 50-page Word document. And no, please, this is not about a wonderful informal presentation with images of your team in hoodies.
The best possible startup pitch deck is a presentation which consists of ten slides. Here they are.
This is (surprise!) an elevator pitch or a brief product description. Be clear. Forget the phrases, like ‘Uber for developers’, or ‘Airbnb for dogs’, no one is going to read any further. Tell us exactly what do you do, who you do it for, and what problem does it solve.
Bad example: We built a disruptive service in a food delivery industry.
Good example: We built a mobile app for dog lovers, which helps them to urgently order pet food delivery from the nearest store.
What problem do you solve? Are you absolutely sure that this problem really exists? Be very specific in describing in. By the way, figures always work well.
Bad example: Dog owners need a food delivery service.
Good example: Statistics confirm that 32% of dog owners in the USA faced the problem of running out of dog food in the mornings, just when they are rushing to work, or, in the evening, when the nearest stores are already closed. We offer a delivery service which helps to solve this problem, ensuring that your pet won’t starve, no matter the time of day.
Where is your market geographically and who is your customer. What is his/her age, gender, lifestyle, where do they work, how do they spend their free time, what are their insights? The more you know the better it is for you and your business. Statistics and competitor analysis will help you to better understand the market size in numbers.
Bad example: Our customers are dog owners.
Good example: Our customers are small and medium size dog owners, living in big cities in USA, white collars, lonely or in a relationship, mostly not married/no kids, age; 25–40. There are 30 million potential users of our App in the USA alone, with an annual market turnover of 0.5 billion USD.
USER ACQUISITION STRATEGY
How and where will you search for your users? Tell us exactly; where they are, how you reach them, and how much it is going to cost per user? Remember, your user acquisition cost has to be really low at this point and break even during the first 12 months, otherwise it simply won’t work.
Bad example: We will make ads in Facebook.
Good example: Our copywriter will write articles about dogs for dog-lover websites, where we will describe our products to users and offer free trials. Our user acquisition cost will be 0.10 USD per user, and we are planning to target 50,000 users with this channel. (And now you may talk about other channels).
Competitors always exist, even is you are inventing a new way of doing the same thing. The main reason to invest in you is not that you are more innovative, but you are more effective. Think carefully about the traditional market. Think about the digital market. What are your advantages? Create a chart or illustration where you compare your model against your competitors, through different categories.
Bad example: We are a disruptive service with a user-friendly interface.
Good example: Create a comparative table and add ‘+’ and ‘-’ to each cell. Be sure that your model contains all the ‘+’s.
How many of your customers are willing to pay for your product? How much are they willing to pay? How much they are already paying? Are there any possibilities that they can pay more? Yes, we are talking about exact numbers. What is the share of paying customers for your product?
Bad example: We are going to monetize via advertisements in our app.
Good example: Our customer pays $10 for each delivery. In 6 months we will introduce an additional service where customers will pay an additional $5/month for subscription. 30% of our registered users are paying customers.
Where are you now? What have you delivered so far? Do you have paying customers? Do you have any customers at all? What have you already done to attract your customers?
Bad example: We are developing an application and looking for the investment.
– We have developed a beta version of our app and launched it in the App Store
– We have 500 installations this week
– The number of installations grows 100% each week
– We had 20 paying customers in the 2 weeks directly after launch
– We have arranged meetings with 14 potential partners, 2 partners have already signed the contracts.
Investors never invest in a product at this stage, they invest in a team. So, this slide should be the main component. Reveal all you can about the founders and the key team members’ expertise and achievements, this slide must be highly convincing. Also the pictures have to be attractive, we realise it’s not Tinder, but it’s still all about matching.
Bad example: We are a team of professionals, which includes 2 designers, 3 developers, and 1 CEO.
Good example: Our founder, John Smith, started his first business at the age of 15. During the last 3 years he has performed as a deputy CEO at “Happy Dog” (Pet food chain), where he successfully increased the turnover of the company twofold.
What exactly are your plans for the period of 6–12 months after initial investment? Which milestones in product development are you going to reach? How many users are you going to gain? How much money are you going to earn? Which markets are you planning to enter? Keep in mind, that actual figures are much more convincing than vague descriptions.
Bad example: We are planning to finish the product development and to enter the US market
– Launch the mobile App in 2 months
– Develop the AI for logistics
– Attract 150,000 new users to our app, 30% of them will be paying customers
– Make 20 new partnerships with pet shop chains.
Finally. Investment proposal. What amount of money are you looking for? Who is the investor of your dreams? What would your investor get for their investment? What’s the exit plan for the investor? How will you spend your investment money?
Bad example: We are looking for 1,000,000 USD
Good example: We are looking for 1 million USD for 10% equity from the fund — operating in the retail industry — to be spent on further product development (70%) and marketing (30%). Our plan is to reach 20 million turnover in 2 years and to offer the investor exit during the M&A (possible buyers: ‘Red Dog Food’ and ‘Happy Dog’).
Good luck with your fundraising,