‘Life all comes down to a few moments. This is one of them.’ Bud Fox, Wall Street
If you didn’t realise before starting a business, it will soon become clear that winning over investors will occupy a significant amount of your time as a founder. Third party cash, whether it comes from angels, VCs, private equity or crowdfunding, can ultimately make or break your fledgling venture - and investors take some convincing. That means you need to quickly get your head around how investors operate and how to convince them that your business is going places.
In The Art of War, the medieval strategist Sun-Tzu writes ‘Every battle is won before it’s fought.’
For you, this means preparing a startup pitch deck – probably the most important tool in your investment arsenal. For anybody who’s suffered ‘death by Powerpoint’, ‘deck’ is perhaps not the best word. This investment document should not double up as a cure for insomnia, but be clear, concise and convincing, conveying the story behind your business, your ambitions and the opportunity you represent.
The name can also be misleading for another reason, because you won’t always be using your deck to ‘pitch’ – not in the Dragons’ Den sense anyway.
Networking and getting introductions to the right people is central to winning investment, which means your deck will often get forwarded around various people before it hits its mark. Your deck must therefore stand on its own, containing all the key information you want to get across, even if you’re not there to physically present it.
So, what are the steps to writing your startup business plan?
Business plan core content and structure
So, what should a winning investment pitch deck cover? There’s a pretty standard structure that most businesses follow, and it looks something like this:
What’s your ‘why?’ You need to start with a bang, so make sure your initial slides are extremely compelling. Short and punchy is better – you should be able to describe what you do in one sentence. The role of this slide is to make your reader turn to the next one.
What problem are you solving? All investors love a good story, so make sure you bring this to life, explaining the inspiration behind your product or service, and the difference it makes to your customers’ lives. If you can relate it to your own personal experiences, all the better.
And how? Here you can delve more into the details. What is your offering, how is it unique and what are the main benefits for the customer?
What’s the secret sauce? Explain the technology underpinning your product. What are the crown jewels that enable you to solve problems with current services? Avoid ‘buzzword bingo’, by throwing in terms like AI, IoT and Blockchain to get attention. Investors have heard it all before, so instead, focus on how you’re using the tech in novel ways to solve old problems.
Who’s going to buy it? This is absolutely critical, as it shows the size of your potential market and therefore the potential size of your future business. Dig out the strongest figures you can find, whether from industry reports, the Office of National Statistics or your own market research.
Show the traction you’re making: As a start-up you won’t necessarily have loads of customers and sales under your belt, but investors want to see that your products and services have been successfully tested in the market, even if it’s in a limited way. If you’ve done beta tests include reviews from these, or details of the size of your waiting list, if you have one. Awards and PR coverage can also be great proof points.
Identify the competition: It’s important to show that you’re aware of the wider market and who could potentially threaten your plans for world dominance. This enables you to highlight once again how your offering is different and where there’s a gap in the market for a new way of doing things, in answer to current trends, or to cater for currently under-served consumers. Don’t belittle the competition but show why your offer is better.
Sell your business model: And all of the above is pointless if the sums don’t add up, so be clear on how you’re making money from your idea! Fans of Dragons Den will know this is usually where contestants trip up, so don’t leave any room for confusion. Having said that, don’t go overboard with financial details or other metrics in your presentation itself. Keep it to the key figures, then be prepared to add more colour around these when you meet, or as a follow up. You may want to include a valuation for your business in which case take a look at our previous blog on how to value an early stage business.
Your team: People buy people, so introduce your whole team and showcase the aggregated and personal wisdom you’ve brought into the room, and those who are back in the office. This should include any advisers and existing investors you have on board.
What you’re after: Finally, don’t forget to ask what you’re actually asking for in terms of investment, what you’re planning to use the cash for and how it will help you achieve your business goals.
Wrap it up: That’s it. Then all you need is a final slide, thanking them for reading and with your contact details for any follow up.
And don’t forget to…
Keep the investment deck brief, no more than 15 slides.
Avoid jargon, complex words or too many words.
Maximise strong imagery to illustrate your points.
Send it from a professional email, with your branded signature.
Attach the deck as a simple PDF. Avoid Dropbox and other platforms that require the recipient to sign onto a platform or jump through hoops. Make it easy.
Spot the typos. Have somebody else check the document and your cover email for you.
Protect your IP (and show you’re savvy to its value). Send the document copyright protected with the phrase: Confidential and Proprietary. Copyright (c) by 'Name of Company'. All Rights Reserved.
Have the business deck professionally designed. It should convey your brand, your expertise, your processes and resources. The investment is worth it.
Ensure you spend plenty of time honing your investment pitch deck, as well as perfecting it based on feedback from investors and others in your network. Then with a bit of luck, you’ll soon be rewarded with plenty of investor meetings in the diary!
And for tips on the next stage of the process, be sure to check out our advice on how to pitch with pizazz.
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