If you’re a startup founder looking for venture capital, then you know that one of the most important things you need to have is an excellent pitch deck.
A venture capital pitch deck is, at its heart, the slide deck that startups use to present their company to investors when they are pitching to get investment in their company. But your pitch deck is so much more than a bunch of hastily-put together Powerpoint slides!
As you raise money for your startup, youfinr VC deck becomes your key communication tool with venture capital funds. And a good pitch deck communicates all of your startup’s key information in a clear and concise manner that makes it easy for a venture capital fund to say, “Yes.”
In this blog post, we will walk you through everything you need to know about creating a winning investor pitch deck, including what to include on each slide and how to make sure your VC pitch deck is exactly what a venture capital fund needs to see before it writes your startup a check.
Learn more about Startup Sales Strategy.
What Is a Venture Capital Pitch Deck?
As we said, essentially, a venture capital pitch deck is the slide deck that startup founders use when pitching their startups to venture capital firms as they raise startup funding for their companies. In some cases, they may also be used to pitch other investors like angel investors for early-stage, Pre-Seed Funding. Your venture capital pitch deck is a key element of How to Raise Venture Capital.
Typically, a venture capitalist will give a startup founder about 15-20 minutes to present their deck and then ask questions. It’s important to note that VCs are not only looking at the pitch deck itself, but also how the you present the deck. This is your time to shine and really show off both your company, your intelligence and your pitch skills!
So If a “Deck” Is Just a Slide Deck, Why Is Having a Great Venture Capital Pitch Deck So Important?
Having a great pitch deck is important for a few reasons.
Your Pitch Deck Is an Important Communication Tool
Your investor pitch deck is one of the most important communication tools you will have as you raise money for your startup. It’s how you communicate your company’s story, product, market opportunity and more to a venture capital fund, as well as other investors like angel investors.
A great pitch deck tells a VC everything they need to know about your company in a way that is clear, concise and easy to understand. It should lay out all the important information in a visually appealing way and make it easy for venture capitalists to see why they should invest in your company.
Your pitch deck is also a great way to keep investors updated on your company’s progress, even if you’re not meeting with them in person regularly. If you have any major milestones or announcements, you can include them in your deck and send it out to your potential investors to keep them updated.
Learn more about how do angel investors work?
Your VC Pitch Deck Is the First Impression of Your Startup
Your pitch deck is often the first time a potential investor will hear about your startup. The deck is usually the attachment to that first email contact you have with an investor and …. as the saying goes, you only have one chance to make a first impression!
So since it’s the first point of contact in the fundraising process, it’s important that your pitch deck makes a great first impression and really sells investors on your company, convincing investors that it’s worth their time to have a meeting with you. This means having a well-designed deck that is clear, concise and tells a compelling story about your startup.
This is your chance to really show investors what your company is all about and why they should invest in it. The best pitch decks are strong combinations of sharp business thinking, story, and a strong design aesthetic.
Make sure you take the time to put together a well-thought-out, professional pitch deck that will really wow a venture capital fund and make them want to invest in your company.
Your Startup Pitch Deck Is a Reflection of Your Company
Your venture capital pitch deck is also a reflection of your company. The way you put together your deck (including the design, layout and overall aesthetic) says a lot about your company and how well you understand your own brand.
A venture capital fund is not only looking at the information in your deck, but also how that information is presented. They want to see that you have a strong understanding of who you are as a company and what makes you unique. They’re also looking to see if you have a solid grasp on your industry and the market you’re competing in.
There is nothing less appealing to investors than a pitch deck that looks like it’s a total mismatch to the company and its brand, like a health and wellness company that is targeted towards affluent, urban, professional women in their 20s and 30s but has a pitch deck that looks like it’s designed for sweaty, professional jocks who are men.
Don’t let that be your deck! Take the time to prepare a pitch deck that demonstrates that you’ve thought about your business, what it is, and who it serves, and how to present it to investors like a venture capital fund.
On that note…
Your Pitch Deck Shows How Serious You Are
First, it shows that you have put time and effort into creating a professional presentation. This signals to a venture capital fund that you are serious about your company and that you are willing to go the extra mile to get their investment.
Second, a great pitch deck shows that you understand that investors are busy people and they likely have seen hundreds, if not thousands, of pitch decks.
It’s actually very difficult to distill a startup into a 10-12 slide pitch deck, so presenting a great deck shows that you really understand your business and can explain it well. You’ve spent the time to put a deck together that can quickly grab their attention and explain what your company does, why it is special, and why they should invest.
And a great deck will help you stand out from the competition. Remember, investors see a lot of venture capital pitch decks and you want yours to be the one that stands out and sticks in their mind.
Your Pitch Deck Is a Chance to Shine
Lastly, your pitch deck is also a chance for you to shine as a startup founder. This is your opportunity to show off your intelligence, your business skills and your ability to sell your company.
What Do Investors Do with Your Pitch Deck?
Investors use your pitch deck for a few different things.
Investors Use Pitch Decks to Screen the Founders They Talk to
First, investors use pitch decks to weed out companies and founders that are just not worth their time to talk to.
Investors receive LOTS of startup pitch decks to consider for investment, too many to possibly meet with all of the companies who send them. In almost all cases, when an investor first receives a deck, he or she will do a very quick scan of a few seconds to see if the company may be one that’s worth talking to or not.
In that quick scan of the pitch deck, the investor will quickly check a number of elements of the company: What does the company do?, Is it in an industry the investor invests in?, Is it in the right stage of development for the investor?, Is the size of check needed a good fit?, Does it already conflict with one of the investor’s portfolio companies?, etc.
And of course, does the investor find the company interesting for any reason?
Because investors are judging a company’s worthiness in the matter of a few seconds, it is absolutely crucial that your pitch deck be as clear and concise as possible!
A Venture Capital Fund’s Investment Thesis and Why It’s Important
In the case of the heavy hitters who may be receiving literally thousands of decks like a well-known venture capital fund, that first assessment will almost certainly be done by a junior member of the venture capital fund’s team.
That junior team member will be tasked with going through the piles of startup pitch decks they receive, and assessing them for the usual criteria of industry, stage of development, size of check needed, etc.
In doing so, that junior team member will be evaluating the pitch deck to see whether it may fit into the venture capital fund’s investment thesis.
What is a Venture Capital Fund’s Investment Thesis, and What Does It Have to Do with Your Pitch Deck?
A venture capital fund’s investment thesis is the fund’s overall guiding investment strategy. In some cases, investment theses are backed up by research and analysis, and a venture capital fund may include that material in a package that is presented to potential limited partners when raising money for the fund.
But whether a venture capital fund’s investment thesis is incredibly detailed (“Seed stage medical device startups in Massachusetts with founding teams that include at least one Ph.d. from Harvard”) or more on the vague side (“Any early stage startup we like in the state of California”), the investment thesis is the overall guiding principle for a fund’s investing decisions.
That doesn’t that a venture capital funds will never stray from their investment theses for an outstanding opportunity, but having promised their limited partners that the investment thesis is how they are making their investment decisions, those deviations from the investment thesis tend to be few and far between.
What Does This Mean for You?
First of all, if you are trying to raise venture capital, you should do your homework and target the venture capital firms whose investment theses you likely fit into. In other words, if a venture capital fund clearly focuses on SaaS companies and you are a consumer products company, it really doesn’t make any sense for you to submit your pitch deck to that fund.
But beyond that, as your prepare your startup pitch deck, keep in mind it’s going to be scanned very quickly for all the important information that may be part of investment hypothesis in question.
So don’t hide any important information! Make sure all the main points of your VC pitch and metrics are very easy for any reader’s eyes to land on in a quick scan of 5-6 seconds. It will make it that much easier for an investor to say yes to sitting down to meeting you, which is a big step to getting a check.
What Else Do Investors Do With Your Pitch Deck?
Investors will also use your startup pitch deck for reference during the investment decision process. They will use your deck to compare your company to other companies that they are considering investing in. They will also often show your pitch deck to other people on their team who are involved in the investment decision to get their input.
If your company progresses to the due diligence stage, the investor will also use your pitch deck as a starting point for their due diligence. This means that they will use the information in your pitch deck to ask you more detailed questions about your business and to look deeper into certain areas before they agree to write the check.
What Does Every VC Pitch Deck Need to Include?
Now that we have gone over what a venture capital pitch deck is and why it is important, let’s talk about what every VC pitch deck needs to include.
As we said before, the standard investor pitch deck has between ten and twelve slides. And while the best pitch decks are always tailored to the specific company, founders, and industry involved, most successful pitch decks tend to be variations on 10-12 standard slides.
Since those standard slides are still the best place for anyone to start when they begin putting together a deck, let’s take a closer look at those slides:
The Title Slide
The first slide is pretty self-explanatory, but the title slide should include the name of the company and contact information. If your company has an explanatory slogan or tag like VRBO’s “Where Families Travel Better Together” or Apples “Think Different,” the title slide is where you should put it.
The Problem Slide
Describe the “problem” in your customer’s life that your company. What is difficult, challenging or expensive in their life? If you first got your startup idea from a problem in your own life, you may want to include that on this slide as well. For an excellent example of explaining a problem and founder-problem fit, check out our Brex Pitch Deck Breakdown,
Your Startup’s Solution
The next slide is where you describe your startup’s solution to your customer’s problem. In other words, this is where you describe your product or service and why it solves your customers’ problem. How do you make your customers’ lives cheaper, easier, or otherwise better?
The traction slide is where you show that not only do you have a solution to your customers’ problem, you have one that they like and will buy. Show the adoption and market validation you already have for your product or service. As one example, the Peloton pitch deck uses press and customer testimonials as proof of its significant success in the market.
Traction is one of the key metrics that is used in valuing your startup, so this about this slide very carefully!
The Market and Market Size
Once you describe the problem you’re solving and your startup’s solution, it’s time to explain how big the problem and the market size for your solution. Who is your customer base and why? And what is the Total Addressable Market (TAM)?
Market size is one of the most important pieces of your startup pitch deck. That is because if the Total Addressable Market for your solution is not big enough to justify the investment, there is no reason to continue the conversation any further, so it’s important to nail this slide!
It’s not enough to just have a good idea. You need to have a way to make money at it, and the business model slide is where you show that you’ve considered what the revenue model for this business could be.
Startups being what they are, there’s a good chance your business model could change, possibly several times. And your long-term business model could be a far cry from what was originally in your business plan. It’s still important to include this slide, so your potential investors know that you’ve thought about this issue, and have a plan especially if you’re a pre-revenue business.
The “Go To Market ” Strategy
Besides having a plan to make money, you also need to show that you have a thought-out plan to acquire customers and grow the business. Too many startups have an acquisition strategy that begins and ends with organic word-of-mouth or getting an app into the iTunes store.
Those may be places to start, but by the time you are in your VC pitch, you need to show that you have a long-term plan to acquire customers and know how much it is going to cost (sales team, paid advertising, etc.). Your user acquisition cost will be one of the key metrics you will be asked about when you pitch.
The Financial Model
Besides a slide showing how your overall growth plan, you will also need to include a slide showing a overview of your financial model, which will include your overall revenue growth, high-level spending, burn rate, and key metrics. Obviously not all of your financial projections will be captured on a single slide, but generally, how is money coming in and going out, and how much money do you think this business can actually make?
This is another one of those slides which will contain thinking about your business which will inevitably evolve over time. The important thing and what what investors care about is that you’ve thought these matters through to the best of your ability at that time.
The Competition Slide
Who is your competition? Who is already out there solving your customers’ problem, and how do you stack up against them?
This is your chance to give your potential investors your assessment of the competitive landscape and your competition’s strengths and weaknesses. Contrary to popular belief, most investors do not consider it an advantage to try to enter a completely open market. In that case, most investors assume that if nobody is in a market, it means that there’s no money to be made there, so be clear that there is competition of some kind (but you will beat it out!).
The Team Slide
Once you have established that there is competition, it’s time to time to talk about who the team is and why your team is the one that’s going to beat out all that competition: the founder(s), co-founder, tech lead(s), key advisors, etc.
Investors often say that they invest in the team much more than they do any idea, so the most important thing on the team slide is to highlight the key points of who your team is and the background, experience, education, etc. that makes them the team that can make this venture a success.
The last few slides of your VC deck should be devoted to asking the venture capitalist for money. This is not the time to be wishy-washy!
Be clear about how much money you are asking for, what you plan to do with it, and how much further along the company will be after the investment. Remember, this money needs to get you to your next round of funding, so think through how much money you need carefully!
For a good example of explaining planned use of funds, visit our Tesla Pitch Deck Breakdown.
The Best Pitch Deck Examples For Any Startup
Now that we have gone over what venture capitalists are looking for in a pitch deck, let’s take a look at some pitch deck examples from successful startups.
The Airbnb Pitch Deck
Airbnb’s pitch deck is a great pitch deck example of how to tell a story and make an emotional connection with investors. They start by talking about the problem they experienced and how that inspired them to start Airbnb. They then go on to talk about their solution, the market validation for that solution, the size of the market, their traction to date, and their competitive landscape.
Their VC pitch deck also does a great job of showing product-market fit by talking about their product, how it solves the problem, who their target customer is, and how they’re acquiring customers.
The Dropbox Pitch Deck
Dropbox’s pitch deck is a great pitch deck example of how to make a complex product easy to understand. They start by talking about the problem that they are solving, the size of the market, and their competition. They then go on to talk about their product, how it works, who their target customer is, their business model, and the strength of their team.
Even though it’s not the beautiful VC deck out there, the Dropbox pitch deck does an excellent job of explaining the key points of why it was an outstanding investment opportunity.
The Facebook Pitch Deck
The Facebook pitch deck is a great example of how to present a lot of information in a clear and concise way. In Facebook’s case, the whole concept of a social network was still very new, and they are one of the best pitch deck examples of explaining something truly disruptive in a clear and concise manner.
For more examples of successful pitch decks, check out:
Business Planning Software
If you’re having trouble getting started with your first pitch deck, you may want to consider getting started with a business planning software like Liveplan or Bizplan which can help you plan out major points which will need to be described in your pitch deck.
Business planning software like Liveplan and Bizplan include tools that can help you create financial projections and charts which will be needed in your pitch deck, so if you find yourself wrestling with what will be needed in your deck, they can save you a lot of headaches!
“I Finished My First Deck… What Do I Do Now?”
If you have finished your first VC deck and are feeling good about it, then congratulations! You have accomplished a lot.
The next step is to get feedback from people who know venture capitalists and the venture capital process. This can be done by reaching out to mentors, advisors, accelerators, and incubators. Once you have gotten feedback, make the necessary changes to your deck and start pitching potential investors!
For a list of venture capital firms that invest in early stage startups, visit our 15 Pre-Seed Venture Capital Firms who Invest in Early Stage Startups.