Raising Funds: The Importance of Creating a Compelling Startup Pitch Deck

By Bob Sargent, Founder & CEO

A strong pitch deck can make all the difference in securing investor interest and commitment for your startup. It serves as your guide in effectively telling your organization's story - clearly, concisely, and compellingly explaining your business model, strategy, and funding needs. While a great pitch deck alone cannot overcome a fundamentally flawed investment opportunity, it is an essential tool in the capital raising process. Here, we’ll look at what a pitch deck is, its vital role for startups seeking financing, and key considerations for developing an effective presentation.??

What is a Pitch Deck?

A pitch is your startup's narrative - the story you present to potential investors. The pitch deck is the accompanying set of slides (typically 10-15 in length ) that visually support and structure that story.??

Keep in mind that the goal of a pitch is to get to the next step (more detailed discussions). After the pitch, more detailed information is typically provided through further discussions, Q&A, and a data room. It is rare (virtually never) that an investor will commit after the first pitch.

At the early pre-seed and seed stages, startups are often funded by angel investor networks and “friends & family”, while venture capital often focuses on later stages, such as series A and later. In the initial stages, founders typically develop their own pitch decks and supporting materials. For larger deals at later stages, an investment banker may be engaged in the process to facilitate investor access, presentations, and closing.??

Startup Pitch Deck Recommendations

A company’s founders know that acing their investor pitch deck — one that articulates a compelling and interesting story to prospective investors — is vital. However, many find creating an effective pitch deck difficult and time-consuming. The good news is that while every deal is different, specific key elements are common to all businesses when creating a compelling pitch deck. The challenge for a founder is developing a pitch and associated deck that hits the key points within the general formula that an investor expects while effectively telling your story.?

Crafting an effective pitch deck can be daunting for founders, often due to inexperience or being too close to the business. As you have already found, a wealth of guidance is available covering the science and art of pitching and deck development. While approaches may vary, the underlying themes remain consistent: clarity, concision, and compelling storytelling.

Most experts agree that an effective startup pitch deck should answer basic key questions about the business, such as:?

• What problem or issue does your business aim to solve?
• How does the product or service of the business solve this problem? Can it make money with the solution??
• What is your plan for acquiring and retaining new customers?
• How big is the potential market for your product or service? Is there an opportunity for significant success?
• What are the financial projections for the business? Are revenue projections reasonable and compelling?
• Who are the key people behind the startup, and what makes them qualified to execute the business plan?
• What are you asking from investors in terms of funding and terms?

Investors will be considering whether your company can be successful. ? In answering this question, investors will seek to understand a wide range of considerations, including:

• Does the strategy make sense?
• Is the customer benefit compelling enough?
• What has to happen for it to be successful?
• Does the technology or product work?
• Will customers pay for it - can it generate cash? And is there validation?
• Is the team experienced enough to execute effectively – industry, technology, sales, etc?
• Are the revenue & EBITDA projections reasonable and compelling?
• Where is the risk, ie, what can go wrong?

Startup Pitch Deck Tips

• Limit the number of slides (typically between 10-15). Be selective, ensuring that each slide visually supports the business’s story.? Respect investors' time.
• Do not use a template from the internet – be creative and make your own, but do not get off-topic. A beautiful design will not make up for a flawed presentation.
• Give examples that your audience will relate to (and care about).
• Start with a summary of your investor ask, and finish with the details (amount, security type, terms, timing, etc.).
• Explain what the company is in a sentence or two at the start.? Be specific, short, and clear.??
• Present most slide content in bulleted form to limit reading and trigger interest.?

That last bullet is tricky. In a presentation, too much information on a slide will cause investors to read the slide and not focus on what you are saying. However, pitch decks are often emailed to investors to obtain an opportunity to pitch, and an overly limited deck will not effectively communicate the plan. Striking a balance between the two is hard.

Common Mistakes

When creating a startup pitch deck, there are several common mistakes you should strive to avoid:?

• Omitting key information that potential investors need to know about your business.
• Not being concise, clear, and to the point.
• Providing too much information and excessive details. ?
• Not clearly defining what your business does and what makes it unique.
• Using a text-heavy presentation and poor-quality images and infographics.?
• Being unprepared to answer key questions from potential investors.?
• Not giving your investor audience a clear ask on further discussions regarding investing.
• Not being able to clearly describe how your business is better than the competition.
• Using overly complex language or jargon that may be unclear to some investors.?

Resources

As a starting point, you might check out this comprehensive and concise guide to raising capital and developing pitch decks: ?The Pitch Deck Book: How To Present Your Business And Secure Investors.? The author has been helping founders present their stories for many years.

The following are additional resources to get you started.

• Y Combinator’s How to design a better pitch deck
• Founders Network’s A Complete Guide to Creating a Killer Startup Pitch Deck
• Founders Institute’s How to Pitch Your Startup
• Cooley’s 7 Tips for Building the Perfect? Pitch Deck

Conclusion

When raising funds for a startup business, a great pitch deck is the ultimate ticket for convincing stakeholders that your product or service has the potential for success (and for increasing your chances of securing a “yes”).?

Remember – communicating your business plan with a startup pitch deck that is clear, simple, and engaging increases your chances of making a great first impression that will attract investor interest.

About eSpecialty Insurance and Bob Sargent, Founder and CEO eSpecialty Insurance was established to revolutionize the customer journey in specialty insurance. Bob is a founder and an early-stage investor with decades of experience as an underwriter and broker addressing unusual, complex, and challenging cyber exposures. He helps SMBs secure the most comprehensive cybersecurity solutions at competitive rates.?

Email [email protected] or call (435) 252-1077 to learn more.