I’m an active angel investor and member of Sand Hill Angels, one of the big Silicon Valley angel investor groups. I review dozens of pitch decks each month and unfortunately most suck.
So to reduce my ongoing frustration, I’d like to help you create a winning pitch deck…
When submitting to angel groups like Sand Hill Angels or to VCs, your pitch deck initially will be reviewed electronically without you being present, so your goal is to be so compelling on a stand-alone basis that the reviewer becomes your champion.
I look for four main things when reviewing a pitch deck:
1. What does your company do?
2. How do you make money?
3. How much traction do you have?
4. What are the investment terms?
There's an old saying that "investors invest in companies, not markets", and in my experience, most pitch decks devote too many slides describing the problem they’re trying to solve and very little about the company they want me to invest in.
My foremost piece of advice is crisply and succinctly tell me what you do and articulate why you’re unique right up front. If you can’t explain what you do in one slide, then your message is too complicated.
Don’t start your pitch telling me the XYZ market is broken. I’ve heard that hundreds of times before and this approach makes your pitch sound generic and lacks credibility. I have yet to see a market that’s actually broken.
My second piece of advice is to highlight your traction. At the end of the day, traction trumps all, so if you have real traction, then make sure to mention it very early in your pitch deck, not towards the back.
My ideal pitch deck…
Slide 1: What Your Company Does. Clearly say what you do in an easy-to-understand manner. Make sure your description is easily understandable and clearly differentiated.
Slide 2: Traction. How much revenue, how many users, growth rate? Traction is the most exciting thing for investors. Customer engagement is traction – revenue, subscribers, users, proofs-of-concept, beta testers, etc. Awards, financing rounds, incubator participation, and advisors you’ve signed are not.
Slide 3: Product or Service. A few screen shots and bullet points will do. I don’t need to know every feature, just the basics of what it does. If I’m really interested, I’ll ask for a demo.
Slide 4: Business Model. Tell me how you make money – subscription, product sales, razor-and-razorblade, etc. I’m amazed at how few pitch decks actually provide any clarity.
Slide 5: Unit Economics. What are your key metrics, such as cost-to-acquire a new customer, customer lifetime value, customer turnover rates, etc. Investors love companies where adding money scales the business so make it obvious.
Slide 6: Go-to-Market Strategy. How do you advertise and get customers? What are your distribution channels? Do not confuse this with market size; big numbers don’t impress me. Tell me exactly how you get new customers.
Slide 7: Competition. I want to know the top two or three reasons how you are different from your competition. I don’t need an eleven-item feature matrix, just the main ones. Please make sure they’re believable. Unless you can demonstrate your product or service is better, don’t make unsubstantiated claims.
Slide 8: Team. Where did the founders go to school, where have they worked and in what roles? Don’t exaggerate or embellish. We’ll do reference checks if your deal progresses to the due diligence phase, and embellishment will cause me to lose trust in you…and take a pass.
Slide 9: Raise. What are the terms of your financing – post-money SAFE, pre-money SAFE, convertible note, priced round? Equally important, what goals will you achieve with this investment? I’m not
interested in how you’re going to spend the investment; I’m interested in the business objectives you’ll accomplish – how many new customers and how much additional revenue?
Done. Where do I send my check?
OK, maybe I’m not ready to invest yet, but I am interested enough to invite you to formally pitch me or my angel group, and that’s really the purpose of a pitch deck.
Everything else – market size statistics, detailed competitive analysis, product details – goes in the appendix. If you’ve captured my attention, then I’ll want to know more about the market, but not until then. If you haven’t captured my attention, these slides are just boring filler content. Don’t make the mistake of trying to sell me on your market’s size; I invest in companies, not markets.
Some investors advise devoting slides in the main body to market size, total addressable market and the like. I disagree. I can’t tell you how many diabetes pitches I’ve seen where the pitch deck goes on and on about how big the diabetes market is. Thank you Captain Obvious! I know that; I read the papers. We know it’s big and adding precision to that does not make me want to invest. I invest in companies, not markets. (Have I said that before?)
What am I saying? You don’t need a 20 or 30 slide pitch deck. Nine or ten slides is all you really need to get me to pick up the phone. But those slides need to be about your business, not your product and not the market.
Here’s a link to a pitch deck template (PowerPoint) from Crowdfunder that pretty much follows my ideal pitch deck organization.
While Airbnb doesn’t follow my organization exactly, it’s a great illustration of how powerful just a dozen slides can be.
And I am obliged to put in a shameless plug for Sand Hill Angels, the best angel organization ever!