How to make an investor pitch deck that really works
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Transcript of How to make an investor pitch deck that really works
Pitch Deck
How to make anInvestor
that really works
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raise moneyis it time to
for your startup?
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feels daun7ng?
everythingin a pitch deck
But explaining
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is for you
This Presenta7on
then
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You may w anna go full screen
Investor
is to persuade the investor to invest in your business.
The Purpose of Your Pitch Deck
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So let us start by answering this question:
What does an investor really want?
10x Returnon his investment in 4-5 yrs
*
$4MAngel : 20%Founders: 80%
Company Valua=on: $5M
$1M
*The expected growth rate & =me varies from early stage investor to growth stage investor, but you get the pointImage
$4MAngel : 20%Founders: 80%
Company Valua=on: $5M
$1M
But, for his share to grow 10x...
Angel : 20%
$1M
80%AngelFounders’ Share
20%
25% 12% 18% 25% 15%
Series A Series B Series C ESOPsFounders’
5%
Angel
$200M
$5M
40xSeries A
Series B
Series C
Company Valua=on
...your business valuation has to grow 40x
$1M
$10M
As the angel dilutes from 20% to 5%, for his share’s value to be 10x, the company’s valuaCon has to grow 40x
10x
’
Through the process of
Pitching…
investor w ants to figure out the
Probabilityof 40x valuaCon
40x?
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the probability of 40x valuation
in his head...
Higher
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the probability of him signing the cheque
Higher
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So theJob of your Pitch Deckis to show the likelihood of 40-50x growth in 4-5 years
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Valua7on40x Growth in 40x Growth of
Business Market Economics
Impact of= +/-
On a side note...
Only thing under your control
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Valua7on40x Growth in 40x Growth of
Business Market Economics
Impact of= +/-
Are you convinced that your business can grow 40x in 4-5 years?
3 ThingsPitch Deckthat your
has to bring out to establish high probability of 40x growth in 4-5 years
Here are
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OpportunityShow that you have discovered a real opportunity
1
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Growth Poten0al
1
And its value can grow 40-50x in 4-5 years
2
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Execu0onAnd your team can seize the opportunity
1 2 3
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Each One in DetailLet us talk about
1Opportunity
Show that you have discovered a real opportunity
Sir, your interview starts at 2pm. Would you be here on 0me?
I am s0ll wai0ng for my cab. Possible to reschedule it?
Set the SceneStep 1
e.g.
Opportunity
Before you talk about the problem you solve, set the scene to one in which the pain of your customer w ould be at its peak.
Image1, Image2
That won’t be possible sir. Sorry.
Step 2
Highlight the Problem and also its ImpactMake sure it seems like one of the most important problems for your customers. JOB
Opportunity
Image1, Icon1, Icon2, Icon3
Unreliable Cab
Missed Job Opportunity
Highlight one or more factors that are most important to people in a solution for the problem
Show what People Care aboutStep 3
Reliability
Opportunity
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Show why current solu7ons don’t workHighlight how the existing solutions miss out on fundamental needs of people
Step 4
Unreliable Slow No Parking
Opportunity
Image1, Image2, Image3, Icon1, Icon2, Icon3
Showcase Your Solu7onHighlight how it w ould change the life of a user. It should be apparent that customers w ould simply love this solution.
Step 5
Opportunity
Image1, Image2, Image3, Image4, Image5
Show Customer Valida7onShow that there are real users out there using and loving the solution.
Step 6
Opportunity
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2Growth Poten6alShow that the value of this opportunity
can grow 40-50x in 4-5 years
Current GrowthNothing can make-up for the lack of growth. It is a proof that you are moving fast in the direction of 40-50x growth. A s P aul Graham famously said: Startup = growth.
Opportunity
Growth Poten=al
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Team’s Reputa7onDo you have a team w ith a reputation that is enough to get you funded? If not, then skip it for now.
’
Opportunity
Growth Poten=al
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Current RevenueGot grow ing revenues? Investors love it - though mostly if you are a B2B startup. But no one hates it.
Opportunity
Growth Poten=al
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Draw ComparisonHas another late stage company got acquired or funded recently? Use it to establish the valuation benchmark. Even better if you can show you are doing better on key metrics.
Opportunity
Growth Poten=al
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Unfair AdvantageDo you have an advantage that no one else has and could be instrumental to success. Entry barriers, pre-established netw ork, patented tech etc.
Opportunity
Growth Poten=al
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Industry HotnessAn industry w ith lot of action means higher probability of downstream investors, better valuation and even an exit. Investors love it.
Opportunity
Growth Poten=al
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Huge MarketShow the investors how big is/are the market(s) you w ill cater to. Remember, bottoms-up calculation is better than top-down.
Opportunity
Growth Poten=al
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Assets you ownDo you own some valuable patents, key partnerships or marquee clients? Anything that enhances your value at exit.
Opportunity
Growth Poten=al
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Risks & Mi7ga7on PlanAny doubt or obstacle that an investor perceives as limiting the growth, is a risk that you should talk about along w ith a mitigation plan - to maximise the potential exit valuation.
Tomasz Tunguz have put together the 11 types of risks that VCs evaluate
Opportunity
Growth Poten=al
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Unit EconomicsWhile you might grow, w ould you be able to make money? Can your unit economics be cashflow positive in the near future? Show, do not tell.
Opportunity
Growth Poten=al
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3Execu6on
Show that your team can execute to perfection and seize this opportunity
Team. Not Players.Show how your team is the perfect group to seize this opportunity. Establish the key skills/experiences required to succeed in your business and map that to the skills/experiences of your team.
Opportunity
Growth Poten=al
Execu=on
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4Offer
Bring your pitch to a closure by making the investor an offer
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Current OwnershipBefore you make the offer, give a quick view of who has put in how much money till date and when.
Opportunity
Growth Poten=al
Execu=on
Offer
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Make the OfferHow much are you raising? What w ould you achieve w ith this money (3-4 measurable milestones)? How much amount you already have a commitment for? When do you see the next round happening?
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Opportunity
Growth Poten=al
Execu=on
Offer
SummarizeClose it by summarizing the investment proposition by highlighting 3-4 key reasons to invest.
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Opportunity
Growth Poten=al
Execu=on
Offer
AppendixPrepare a slide for every question that an investor might ask and put it in appendix. It is not about less frequently used slides but about building credibility by show ing that you think through everything.
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Opportunity
Growth Poten=al
Execu=on
Offer
Quick RecapLet us do a
Validated
Opportunity40-50x
Growth P otential
Great
Execution Capability
Exci=ng
Investment Offer
1 2 3 4
final things to2Keep in Mindwhile making an investor pitch deck
Show CredibilityNo one hands over their money to someone who is not credible enough. Everything that you say contributes tow ards your credibility - positively or negatively. Choose your w ords carefully.
1
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any thing else that might brighten up an investor’s eyes
would you be able to fascinate the investor - make him feel that there is something fascinating that he has to be involved
in.
Fascinate HimInvestment decisions are hugely influenced by emotions. Make the investor feel that this is something fascinating that he has to be involved in?
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2
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Our InspiraAon
Pitch the way VCs think
Vinod Khosla
How to Design a Pitch Deck
Daniel Eckler
How Startup Valua=on Works
Anna Vital
a presentaEon by:
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Credits
ImagesFlickr Pexel
Stock Snap Visual Hunt
IconsNoun Project
Flat Icon
Icon1, Icon2, Icon3, Icon4
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