Pitching is a daunting prospect for any founder, but for those who are new to the game, it can be difficult to know exactly what their pitch deck is supposed to include, and what potential investors need, or want, to know.
Earlier this month, Mathilde Collin, co-founder of US collaborative workspace startup Front, shared the pitch deck she and her co-founders used in their $US66 million ($89 million) Series B funding round, which was led by Sequoia Capital, with participation from DFJ and existing investors.
Collin herself said she’s doesn’t feel qualified to say why the round went well; she said part of it was probably down to building relationships with investors. But she did share some of the feedback she got from her pitch deck anyway.
Every startup is different, and every founder has a different way of pitching, but there are a few things they can do to improve their chances of success. StartupSmart recently took a look back at some pitch decks of famously successful startups, and spoke to a handful of entrepreneurs, to try to figure out how to get investors’ attention.
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1. Start with a statement
Airbnb’s pitch deck for its seed funding round back in 2008 started with the statement: “Book rooms with locals, rather than hotels”.
Not only is this a direct call to action, it also sums up what Airbnb does just about as succinctly as possible. There’s no room for mystery here.
The same goes for Coinbase’s 2012 pitch for seed funding (“Your hosted bitcoin wallet”) and Front’s Series B pitch deck (“Email was never built for teams to collaborate”) and, to an extent, Canva’s 2013 pitch deck (“The next generation of publishing”).
Mick Entwisle, co-founder of video production startup Genero, which recently raised $4 million to fund its expansion into the US market, says one of the most important parts of a pitch is “being really, really clear about the problem that you’re solving, and how you solve it”.
2. Identify the problem
AmazingCo co-founder Silvia Hope tells StartupSmart while she and her team don’t actually have a specific pitch deck, they do use a few slides to help them demonstrate “the problem space”.
Earlier this month, the experience startup raised $2.3 million in seed funding, in a round led by Rampersand and including Richmond AFL captain Trent Cotchin, Luxury Escapes co-founder Adam Schwab, Macdoch Ventures, and co-founders of construction management software company Acenox Leigh Jasper and Rob Phillpot.
Problem solving was something of a theme in the pitch decks we compared. Uber’s seed funding pitch cited the problem of an ageing system for booking taxis, and inefficient technology to do it, while also pointing out the high costs of obtaining a taxi licence, or medallion, and underpayment of drivers.
“Having something unique and defensible is really crucial, especially when you don’t have much of a run on the board,” says Genero’s Entwisle.
Canva’s 2013 pitch deck, which co-founder Melanie Perkins admits followed many former iterations, includes are several slides illustrating how the design process traditionally works, the way Canva could change that process, and the gap in the market the product fills.
3. Learn as you go
Writing about the ups and downs of pitching earlier this year, Perkins outlined the way the Canva founders changed and added to their pitch deck as time went on.
“Every time we’d get a really tricky question from investors we’d iterate on our deck to put the hardest questions they asked right at the front of the deck,” she said.
For example, investors struggled to see the billion-dollar opportunity in the market, so they added a slide detailing the values of the stock image, design service, publishing and print industries.
“Finally we got a pitch together that we felt like it captured our vision. It was really long, but pre-answered so many of the investors’ trickiest questions,” she said.
4. Tell a story
According to Francis Vierboom, co-founder of Propeller Aero, a drone startup that raised $10 million in Series A funding this month, when it comes to pitching, “just like most things you’ll do as a startup founder, storytelling will be key”.
“Once you’ve told a story about how your business does something valuable and eventually becomes a unicorn world-changer, go back and fill in the gaps about team and market size and technology,” says Vierboom.
Entwisle makes the same point; while stats and figures are important to investors, “the whole pitch deck needs to tell a great story, from start to end”, he says.
“You can add so much detail about the product that the overall narrative gets lost. We learnt how to strip our decks back and make them clearer,” he says.
One deck praised for its strong story is Front’s, shared by Collin, which features consistent headings throughout explaining the startup’s story so far (for example, “We rapidly broadened our value proposition”), where it is now (“As a product, we’re in a unique position”), and where it’s going (“Our two areas of focus for 2018”).
5. Include graphs (not pictures)
The Front pitch is also graph-heavy, with visuals showing increases in average selling price, headcount, net retention rates, and much more.
Airbnb’s pitch deck has graphs to shows where the company sits in comparison to competitors and Canva’s uses pyramid graphs to prove the product’s potential market segment. While pictures can make a pitch deck look appealing, graphs do the same, while also adding value.
“Graphs speak louder than words and images. If you can have graphs that allow you to talk about what is changing in your company and what you’re learning, it’ll add credibility to what you are saying,” says AmazingCo’s Hope.
6. Show what you’ve achieved
It’s all well and good for founders to shout about where their startup is going, but they should also detail everything they have achieved so far.
Coinbase’s pitch deck includes graphs showing 20% daily increases in user signups, and transaction volumes of $US65,000 in its first five weeks. Airbnb’s features user testimonials, and Front’s shows how its seed and Series A funding was used, demonstrating “a track record of capital efficiency”.
It may be an obvious observation, but all the successful pitch decks StartupSmart compared included concrete numbers showing the businesses progress so far, as well as their projections.
“Have a slide on unit economics that explain how cash flows through your business historically, today and in the future. This is the best way to show how you’re thinking about scaling your company,” says Hope.
Justin Dry, co-founder of Vinomofo, tells StartupSmart he would want to see projections — even though he might no take them seriously.
“I want to understand how ambitious (or insane) they are,” he explains.
“Generally, everything takes longer and costs more than everyone thinks, but it’s good to see what they are hoping to achieve and the timeframe they’re going to do it in.”
7. Why you?
It’s good to be different, but that difference can be highlighted through comparison. Uber sold itself as an alternative to the yellow taxi from the get go, and in its pitch deck, the company lists its key differentiators, including “members only”, “fast response time” and “one-click hailing”.
The deck goes on to hammer this point home, saying: “UberCab would be faster & cheaper than a limo, but nicer & safer than a taxicab.”
Airbnb identifies as not Craigslist, not offline rental systems, and not hotels.com, while Canva sells itself as an alternative to Microsoft Office and other design templates. The Coinbase deck suggests Coinbase is to Bitcoin what iTunes is for MP3s.
“I want to know who else is doing this. I hate it when they say ‘no one we know of’. It shows a lack of research because 99% of the time someone is doing something similar somewhere. Be up front, and tell me what they’re doing, how they’re doing and how you’re better,” says Vinomofo’s Dry.
8. But, why you?
Canva’s 2013 pitch deck introduces the team, outlining the skills and experience of the founders, the lead developer and advisors. But before this is a slide validating the experience of the founders in their previous startup — a similar design business — with the heading: “We’ve done this before”.
“I want to understand the why. Why are you doing this? … Show the passion here,” says Dry.
“I want to get to know the team and why are they are the best ones to solve this problem.”
The Airbnb deck also introduces the founders, with informal images and lists of past accolades, while Front’s pitch deck — although it doesn’t introduce the founders — shows low attrition rates and 100% approval rates for Collin as chief executive.
Letting investors know who you are, and being personable and communicative can be the difference between getting investment or not.
“Clarity of communication is apparently something many founders struggle with. Make sure you are an expert at explaining and selling the opportunity in your business,” Collin said in her Medium post.
9. Be flexible and reactive
According to Hope from AmazingCo, founders should be prepared to answer any question at any time, and this means not necessarily having pitch deck slides in a certain order.
“Don’t prepare it such that you need to go through top to bottom. Build it so that you can jump between slides and use them in isolation to answer key points about your company,” she says.
Similarly, when sharing her top pitching tips, Collin said part of the reason she succeeded was that she “had all the data any investor might want to know”.
“That streamlined the process and helped keep the momentum going,” she said.
10. But, use your slides to get back on track
That said, Hope says slides can also be used to bring conversation “back on point”.
There’s a lot to be said for flexibility, but founders should not let investors take full control of a conversation, or lose focus on what’s important, she says.
“There’ll be times when you pitch investors where they ask questions that don’t make sense because they don’t know what they don’t know,” says Hope.
“Flicking to a slide relatively related and taking the conversation in another direction helps you keep control of the conversation.”
11. Make the investor feel smart
Propeller Aero co-founder Francis Vierboom has a final piece of advice for startups looking to get investors on side, and it’s all to do with ego.
“Remember that you’re not just trying to make an investor think that you’re smart; you’re also trying to make them think that they’re smart,” he says.
“The best bit of a pitch deck is inducing the ‘aha’ moment in the mind of the audience that makes them get the flash of insight that you’ve had as well, without putting it up in neon lights.
“[It’s] not easy to do, but investors who’ve had an idea themselves are ‘going for you’ way more than ones who have sat back and listened to you explain everything.