11 easy steps to build an investment-winning pitch deck
If there’s one thing every successful start-up needs, it’s investment. Nuance's Alistair Robbie gives his top tips for securing that all important finance...
Start-up investment comes in many different forms. You invest your time (a lot of it), you invest your energy, but, most importantly, you also invest your own money.
While you may be able to finance your venture initially, at some point you’ll need to invite external investors to your company to stimulate growth and help your business achieve its potential.
Regardless of what sector you’re in, financial investment is a major concern for nearly all start-ups but how can you ensure you attract the right kind of investors to your company?
Selling your company to investors can be a challenge, especially when there is almost always an emotional connection which can be difficult to break.
While some entrepreneurs might relish the opportunity to hawk their wares to strangers, for many it can be a demoralising and often nerve wracking experience.
To help ease these nerves and help structure your business plan into a slick, persuasive presentation, here are my tips:
1. Present your company vision
Set the tone for your pitch early in the presentation. Gauge your audience and remember that, unless you’ve met them before, you’re looking to build trust.
Summarise your business in a succinct manner, and convey your passion for the project.
2. Explain the market potential
Once your prospective backers understand your business, they need to know there is a strong market potential for it. Here you need to outline who your target market is and its size, highlight the growth rate of both your market and your company – use relevant case studies to place the investment opportunity in context.
3. Highlight the problem
Successful businesses identify a concrete problem that they can solve, and investors know this all too well.
If you can’t identify and communicate a gap in the market – a core of potential customers who are in need of a solution – it’s unlikely that investors will take any notice, regardless of how interesting your business idea may be.
4. Introduce the solution
Once you’ve identified the problem, you then need to present your business product or service as the ideal solution. The most important thing is to convey exactly why people will want to buy your product.
By now you should have set the scene – the status quo – so now explaining how your solution will change things provides a perfect narrative for the investor.
5. Explain your revenue model
Just as importantly as communicating the brilliance of your idea, you also need to explain in certain terms how you will make money from it. Here you should answer the following questions:
- What position will your product occupy in the market? (is it a premium product, or something more affordable?)
- What is your profit margin?
- How exactly will this generate a profit and return on investment in the next five years?
6. Provide evidence of traction
Investors want to see hard evidence of the money-making potential of your proposal. Avoid lengthy discussion of figures here (those come later) but include:
- Progress so far: profits in brief, customer numbers, subscriptions etc.
- Any significant milestone moments
- Milestones that you plan to reach in the future
7. Describe your marketing strategy
Once investors believe in your product or service, they have to also believe that you can successfully market it. You should highlight:
- How your product will be packaged
- How and where you intend to sell your product or service
- How you will promote your product to potential buyers
8. Introduce your team
A great idea is nothing without a team of skilled and dedicated people who will bring it to market, and this is something that investors are very aware of. This is your chance to show that you have the right people to carry the idea off successfully.
Highlight previous experience here, but keep it brief and relevant.
9. Predict your finances
This is where you back up everything you’ve said with some hard figures. It should contain details of your predicted sales figures and profits for the next five years. Make sure it includes the following, and be prepared to explain your workings:
- Sales forecasts
- Profit and loss predictions
You should also be prepared for difficult questions about why you’re searching for investment. Investors will be trying to find reasons not to invest, they might ask you thinks like ‘Is the product flawed?' ‘Are you mismanaging the company?' ‘Is the market already saturated?'
10. Identify your competition
Most companies enter an existing market landscape, and investors need to know where yours fits in. Most importantly you need to explain why customers will choose your solution over a competitor. You should have answers to these questions:
- Who are your competitors?
- How competitive are they?
- What makes your solution better than your competitor?
- Is your intellectual property protected through patents and copyrights?
- Can your competition steal your idea?
11. Outline what you plan to do with the investment
By this point, hopefully your potential backers are impressed with your idea but they'll still want to know precisely how you will use your investment before they hand over any money. You should include:
- How much money you need
- How you will use that money
- How and when will they make their money back?
- Details of any other investors involved
- Less is more – Predict what questions investors will have and hold information back to answer these with confidence.
- Question investors – This is a partnership, you need to know their experiences, potential conflicts of interest and get a sense of whether you want to work with these people on an ongoing basis.
- Know your numbers – You don’t need to know every statistic by rote but knowing key figures is vital.
- Stay fresh in their minds – Circulate a copy of the deck in a secure PDF format (such as Nuance) to allow investors to remind themselves on the detail of the pitch.
- And finally, remember to believe in your company or no-one else will – It’s unlikely you’ll find your perfect partner on the first date and the same goes for securing investment.