When a startup is seeking rapid growth in its early stages, it often needs external funding. To sell your business idea to investors and financiers, you need to create a convincing and comprehensive pitch deck. Pitching is an art form that anyone can master.
Why are so many early-stage startups struggling to secure funding? Audra Shallal pondered this question years ago. With an international career in both the corporate world and the investment industry, she emphasises that securing funding always requires a good pitch deck.
"As an entrepreneur, you have to act as the pilot of your business and demonstrate it to investors. Your task is to convince them why your business is important and why it deserves funding. Without funding, even a good business idea can fail to succeed," Shallal states and continues:
"For the pitch, the entrepreneur could come up with the top five reasons that make their company a good investment and then build the entire pitch around these elements."
Shallal’s core competency lies in mentoring, training, and coaching startup entrepreneurs. Primarily active in France, she is involved with organisations such as the European Business Angel Network, which is the leading early-stage investor network in Europe.
Drawing from her extensive experience, Shallal says that a pitch deck serves as a first impression – and that you only have one chance to make it count. Therefore, make sure that the content, structure, and delivery of your pitch deck are flawless before presenting it to investors, customers, or partners.
A carefully planned, thoughtfully structured, and well-presented pitch deck is an essential tool for any company that aims for significant growth and new resources.
Logical structure and concise content go a long way
The main goal of a pitch deck is to convey vital information about the company in a concise, convincing, and attractive way. To do so, Shallal suggests addressing five key questions in the pitch deck: who, what, where, when, and why. Addressing the question “how” as a bonus could be beneficial, too.
"First, you need to create a logical and coherent basic structure that holds the presentation together and helps investors understand the whole picture. It’s like a concise elevator pitch. Later, narrative elements can be added to the pitch deck and tailored to a specific target audience."
Pitch decks can be used for various purposes. While they are typically used for fundraising, it’s beneficial for a company to have a distinctive pitch deck style for selling a product or service to customers. Sometimes a pitch deck can used for recruitment purposes or simply for a general company presentation.
Whether the pitch deck is one, five, or fifteen minutes long, the first 30 seconds often dictate the outcome. Therefore, it’s crucial to convey the purpose of the business idea and passion for the venture right from the start. The less time available, the more crucial it is to summarise the overall message effectively.
"Regardless of the time available, this advice always works: ‘Keep it simple’. Investors can lose interest quickly as they see so many pitches all the time," Shallal points out.
A potential investor wants to get to know the whole package through the pitch deck. Therefore, a good pitch deck should cover the company's business idea, product or service, market situation, customers, competitive advantages, and team expertise. In the pitch, the company describes the problem it solves with an innovative solution.
Similarly, it’s key to have the company's financial metrics in order so that they can be presented openly. Through objective figures, the company can demonstrate what it has achieved in the past, its current situation, and what kinds of future goals it has in store.
"If an investor asks for more information after a one-minute pitch, that’s a good sign. But if they only say 'Nice, that sounds interesting,' the pitch didn’t go so well."
Practice turns every pitcher into a master
What skills should an entrepreneur have? Shallal believes that anyone can become a good pitcher. Experience grows with practice, which in turn adds confidence in pitching. Presentation skills can be practiced with a partner or a friend – live or online.
"Pitching is more about what makes the entrepreneur and the company unique than about their skills. What sets you apart from the crowd?" Shallal encourages.
When presenting a pitch deck, it's important to consider the diversity of the audience: some may prefer visual information, others auditory, and some tactile. In other words, the pitch should be visually informative and presented clearly. Is it possible to let the audience physically touch the products?
"The auditory sense is particularly important. Therefore, it’s good to avoid using too much jargon or technical terms in the pitch because investors tend to tune out when hearing such speech."
Besides verbal communication, the pitcher can also control their body language. Natural presentation skills can be practiced: Where should your hands be – in pockets, by your sides, or crossed in front? How much can you move during the presentation without distracting the audience's focus?
"I vividly recall one woman pitching at one gala evening at a congress. She made eye contact equally with everyone in the audience and maintained a calm speech rhythm from start to finish. She didn't let the noisy environment disrupt her performance at all."
Presenting one essential point on each slide helps to rhythmically pace your speech and helps to avoid the risk of information overload. Rehearse your pitch always in advance so that you have enough time to go through all the slides without having to rush toward the end.
Preparation is key to avoiding pitch deck pitfalls
Entrepreneurs often fall into the trap of making pitch decks too one-sided. If the pitch deck only describes the product, service, or technology the company utilises, for example, then it’s not comprehensive enough. Everything should be balanced and included in the pitch.
"Next, make sure your message is clear enough for even your grandmother to understand it. If needed, simplify things with the target audience in mind."
Shallal regrets that companies occasionally forget to include competitor analysis in their pitch decks. It's important to thoroughly understand your competitors and to name them directly. Based on the analysis, you can demonstrate that there is genuine demand for its product or service and its growth potential.
Competitor analysis is closely tied to market research. That means figuring out how you plan to enter a specific market.
Investors are always interested in one thing: What is the return they will get on their investment. Therefore, outline clearly what your company needs funding for and what you intend to achieve with it. It’s crucial to demonstrate the scalability of your business as it reveals how valuable your company is as a target for investment.
A good pitch deck and a good story go hand in hand. Even though a compelling story at the beginning of the pitch can hook the audience immediately, relying solely on the power of the story is not an option.
"A memorable story ties the whole pitch together. It can be used to explain the company's business model that sets it apart from others. However, it's important to address the key points clearly and not to overshadow them with the story."
Remember these eight tips when creating your pitch deck:
- Focus on the essentials. Communicate the most important things concisely. Structure the pitch deck for clarity and avoid overly technical vocabulary.
- Define the problem. Present the problem your company's product or service aims to solve from multiple angles.
- Introduce the solution to the problem. Emphasise your unique competitive advantages. Demonstrate your understanding of the target market and its potential.
- Present your team. Introduce team members along with their experiences and roles. Emphasise the strengths of the team that support success.
- Highlight achievements and milestones. Include important customers, growth figures, awards, and patents, for example.
- Specify your funding needs and allocation. State how much money you need, why, and how you intend to use it.
- Show the benefits of investment. Clearly explain how investors can benefit from investing in your company. What do they value and expect?
- Write a story. A good pitch deck is a verbally and visually compelling story that sparks interest and convinces investors.
