What Are Investors Looking for?
The entrepreneur, the person: As much as the details of the company are important, the person or people behind the company are equally as important and affects how to pitch to investors effectively. The most important part is the entrepreneur, the person who is behind the product, service, and the company as a whole. They want to see the entrepreneur’s drive and vision. There looking to see if the person has got experience and leadership skills; whether or not they can bond with them; emotional connection; Are they trustworthy and honest. It is important for the entrepreneur to build a relationship with the investor.
Investors say they have a good feeling about that person. This is mostly attributed to how transparent the business owner is.
Business details: Investors are looking to obtain and understand critical information about the company. This consists of:
- The Product/Service
- The Market/Consumers
- The Company
- The Numbers – Financials
- The Environment – Competition
- Unique Selling Offer (USP)
- Future Prospects – Growth and Sustainability
The Investor Pitch Deck
To have a great pitch deck, one should make sure that they cover the contents below in that order:
- Company Overview
- The Solution
- The Market – Industry, Market Segment, Customer
- The Business Model
- Road Map & Traction
- Marketing & Sales
- The Team
- The Ask
These contents determine how to pitch to investors effectively.
1) Company Overview
This summarizes what product/service that the business deals with, the location, brief on the management team experience, key partnerships and the traction in the market. This slide should capture the attention of the audience or reader and be able to convince them about the growth potential of the company.
Describes the problem that your product or service is solving. What is the gap in the market and why is it important to meet that need? Who are the target customers?
3) The Solution
It explains how the solution is in detail and how it is different from other existing solutions. It articulates how the product meets the client’s pain points and determines to a great degree how to pitch to investors effectively.
4) The Market
This slide defines the market in terms of its size in terms of value and/or demand. Investors are interested in large addressable markets. It is important that you use visual representation such as graphs and charts to show how you intend to increase your market share. It also highlights the logos of some of the key well-known customers as well as partnerships.
It also shows the company’s competitors and your competitive advantage.
6) The Business Model
It articulates how you intend to generate revenues and the pricing model. It indicates the customer’s long-term value and associated customer acquisition costs.
7) Road Map and Traction
Investors would like to know how and when you are planning to achieve the sales targets. This can be illustrated through growth metrics, traffic to the website, strategic partnerships established etc. Early traction is viewed as a positive indicator of a continued growth trajectory.
8) Marketing and Sales
This slide covers the marketing strategies and activities you have put in place to reach out and acquire. It indicates the channels you are using or are planning to use; online (social media and email marketing etc.) and offline (banner, activations, events etc.). What publicity strategies have you implemented?
This slide of the pitch deck shows the current financial situation and projected future business performance. For businesses in the start-up and early-stage it will also indicate the period it will take for the company to break even and start having profit and positive cash flows. Some of the details captured include
- Total revenues and expenses
- Key business metrics such as annual recurring revenues
Financial projections that cover three to five years
It is important to present financial projections that are realistic and in tandem with the historical trend and the expected market conditions.
10) The Team
The composition of the team contributes a big percentage to whether the investor will invest in the company or not. This slide includes pictures and titles of key management staff with a synopsis of their experience and expertise. Board members, advisors and consultants may at times be included to strengthen the profile and credibility of the team
11) The Ask
This slide addresses the details:
- How much financing and/or investment you are seeking to raise;
- Use of funds, e.g., hiring personnel, capital expenditure, marketing etc
- Milestones to be met
- How long is the financing intended to last.
- Any financing you have previously obtained highlighting key investors.
Style of Presentation
- Use a layout that is simple, clear and has a logical flow
- Maintain a consistent colour, font, images and good-quality graphics
- Include accurate information
Tell a compelling story through:
- Captivating your audience
- Having an authentic story
- Linking the overall presentation
- Avoiding irrelevances
Pitch Deck Examples
To help you develop a great pitch deck kindly review sample pitch decks and templates below:
- Airbnb’s Pitch Deck for its Angel Round
- Linkedln’s Pitch Deck for its Series B Round
- Facebook’s Original Pitch Deck from Spring 2004
- Google’s Template Pitch Deck for Startups
Let the investor have access to the pitch deck prior to the meeting preferably in PDF format. Make it easier for the investors to review the presentation before the meeting so that they can come prepared with questions or areas that they need clarification. To capture the investor’s attention, make a pitch deck of not more than 12 – 15 slides.
After pitching, even if you do not get a positive response, keep updating the investors and building the relationship. They may not be interested but may refer you to other potential investors in their networks or may get in the next round of fund raising.