Startup founders have a limited amount of time to make a lasting impact on potential investors. Persistent communication is key in securing funding to grow your company, and your investor pitch deck is often your first impression in the fundraising process.
Jeffrey F., a fractional CFO whose firm has helped over 300 companies raise capital, tells businesses, “Thirty-four seconds is the average amount of time that investors look at the deck prior to taking the first call.” So, how can you make the biggest impact, both in your deck and that initial pitch?
The First Three Pages in Your Pitch Deck Template
Thirty-four seconds is not much time. Therefore, the most vital component of your pitch deck is the first three pages: the problem/solution. Everything that follows is important but supplementary to the main purpose, which is to attract investors’ attention. Each of those three pages should have a defined goal:
- First slide: The ‘problem’ page outlines the nature of the problem that your product or service solves. Investors need to understand why your offering is both timely and necessary.
- Second slide: The ‘market’ page details the segment of the population affected by that problem, both now and in the future. The market represents opportunity: investors prefer markets that grow over time, rather than shrink.
- Third slide: The ‘solution’ page shows how your company’s offering is the definitive solution to the growing problem and different from anything else on the market.
It’s as important to know what to leave out of your pitch deck as it is what to put in. Customers care about features, timelines, colors and design. When trying to raise capital, however, features matter less.
“Remember you’re selling your business, not your product to the investor. Features are less important to the investor. What’s important to the investor is how is the business going to make money? How are they going to make money?” states Jeffrey.
What Does an Investor Want to See in Your Financial Model
Investors want to see two core financial elements in a pitch deck. First, does your company thoroughly understand its own business model? Can it back up its claims with data? And second, do those claims present any red flags? Do predictions seem in line with reality or are they overinflated?
Avoid basic examples of revenue generation, such as a set percentage of growth every year. “Investors don’t want to see something like that,” says Jeffrey. Instead, stick to fundamental KPIs, so investors can trust that you understand what you require to build your revenue. For instance:
- How many customers do you need?
- How many products or services do you need to sell?
- What types of orders will you take and how will you distribute them?
Having the answers to these questions assures investors that you understand how the business is going to grow revenue. Be sure to include other important details, backed up by data, which explain:
- The purchasing patterns of your potential customers that prove market-fit
- The relevance of your model in the market (i.e., B2B, B2C)
- The details of your distribution method (i.e., direct, by subscription, etc.)
Best Practices for an Engaging Investor Pitch Deck & Investor Call
With often just five to seven minutes for a pitch, there are several ways to ensure investors both read your deck and remember your pitch. “People will only remember three to five key ideas from the pitch deck, if you’re lucky. Choose the most important ones and repeat them often in different ways,” says Jeffrey.
In addition, Jeffrey outlines additional practices to grab investor attention.
- Your people: Introduce your team and their accomplishments. Not only does it add the human touch, but it also reassures investors about your knowledge base and expertise. If you and a co-founder have worked together successfully in the past, highlight it.
- Your ask: Don’t forget to ask for money. “You’d be surprised how often it happens,” says Jeffrey. “Asking for money is incredibly important.” Be clear about what you’re looking for. Have one proposal with an amount and deal terms you can concisely explain.
- Your visuals: Make your pitch deck pop with graphic images. Easier to parse than text, a good image conveys meaning in an impactful manner. However, don’t get too experimental—investors receive many pitch decks and standard pitch deck templates and formats are easier to review.
- Your practice: Rehearse and prepare for common investor questions about your business model, your market and your competitive differentiators. Ideally, when speaking to investors, you should be spending more time on Q&A than on presenting the deck.
Don’t Forget to Follow Up
If your pitch deck is successful, investors will have questions. You need to have ready answers for the most basic investor questions like:
- What makes you different from the competition?
- Is the problem big enough to require your solution?
- What relevant experience do you or your team bring to the business?
If, after several meetings with investors, you find that most of the investor questions share a few common denominators, put those answers directly into your pitch deck. Jeffrey also suggests pitching to someone who’s skeptical about your business to get constructive feedback and see where your greatest “holes” lie.
After your presentation, be sure to follow up. Once you’ve shared the deck, it’s always best practice to ask if the investor has seen the deck or would like you to reshare it. That opens the door for you to follow up, which is crucial to closing the deal. “Always, always follow up,” says Jeffrey. “Follow up until they tell you to stop or give you money.” If investors are interested but hesitant to make a decision due to economic conditions, remember to stay consistent with communication—a quarterly newsletter can even keep potential investors in the loop.
Speak to a Fundraising Expert
A well-crafted pitch deck is crucial for raising capital, but it’s only part of the equation. A clear financial model and valuation analysis are also table stakes. Even further, you need to be sure that you’re pitching to the right investors. A fractional startup CFO or fundraising expert can help your team identify appropriate investors, streamline outreach and present the best possible story of your business.
Paro connects startups with fractional finance experts who have years of fundraising experience and provide skills and support in pitch decks, financial modeling, valuation, capital structure and even lead generation and investor communications. Get the trusted skills you need to take your startup to the next level.
