It's been a month since my last video, but I'm here now, don't complain!
There are buckets of resources out there to get you started with your pitch deck, everything from how to structure your pitch to ready-made templates. So why am I, the least certified person on this topic, doing a video about it? Well, I went through two successful seed funding rounds less than a year apart, one of these rounds with the reputable Atlassian as the investor. I learned a couple of things about taking seed money and what investors are looking for.
But the actual reason why I want to share these tips is that I recently had several discussions with early founders and have seen decks that weren't great. And I noticed common mistakes that you could avoid making to ensure your pitch is not rejected and you secure the investment you badly need.
I will talk about my top six tips for a compelling pitch deck to get you seed funding. Having a clear positioning statement, telling a story with your pitch, talking about your value, investment purpose, and contingency plans. We'll talk about all of that, but there is one critical point I want to mention!
There are differences in what an early angel investor needs to hear when helping you with smaller seed funding versus a VC for a series-round investment. Most advice out there is textbook VC pitch structure, but I'm going to give you specific tips that worked for me for early seed funding. So, I might give you conflicting ideas to what you heard from others, but, as always, you're free to take it or leave it. And I promise you won't hurt my feelings either way.
I'll go through these tips quickly, but if at any point you feel the pace is slow, feel free to increase the playback speed. Also, this video has chapters, so you can skip between if you need to.
Let's start with probably the most unexpected mistake I see in decks, the positioning statement.
Early validation is critical
I'll put it plain and simple, how you introduce yourself can make or break your chance to get funded.
When you pitch to investors in person, your first impression will impact how the investor will perceive you for the duration of the meeting. Sure, having a solid rest of the pitch can salvage some of the carnage produced by a terrible intro. Still, if you have a great start, discussions will flow more naturally as the first impression always counts.
This applies to pitch decks as well. If you don't have a strong positioning statement very early on in your slides, you'll have a confused potential investor scanning through slides trying to figure out why you exist.
One of the mistakes I see is not taking advantage of the real estate on the cover of your pitch deck! Most of them have only written "Pitch Deck" as cover title or just the company's name.
Take advantage of the cover to add a punchy tagline under your company name or logo. "Jexo" > "Making work management delightful", "Acme Inc" > "Taking X to the next level". Treat your pitch cover as the title of a youtube video or the subject of a marketing email. Make investors curious and eager to open the document.
The second issue with positioning is not prioritizing at the very beginning the problem statement, your mission, then your vision. Often founders start with the problem statement and from there deviate to the market size section and opportunity, then, for example, talking about features and after the company mission.
X Don't do that! Suppose you hop around, and your positioning is not all in one piece at the very start. In that case, You'll confuse whoever reads the pitch because you don't have continuity, and you've not validated yourself at the beginning.
Have your validation at the very top of the pitch: Problem, your mission to solve it, your vision on how you'll solve it differently. If you do this early on, the rest of the pitch will make more sense and become easier to digest.
And I mentioned just now continuity. The biggest issue I see with decks is the lack of continuity between slides and no flow whatsoever.
Tell a coherent story
Heard this so many times: "I can't send you the deck, I need to explain it to you..."
Your investment deck needs to speak for itself because you're not going to be there to read it out and guide every person who needs to see it. Even if you only share the pitch in person and run it through. Consider the following:
- The investor will want to revisit the deck in detail later after your pitch
- They might share it with a board of advisors
- If your deck has no organic flow, even you narrating it will still make it feel disjointed
If you're not confident in emailing just the pitch to an investor without explaining it, you need to go back to the drawing board.
Your pitch needs to organically guide the reader in navigating it end to end. You should see it as a red flag if the investor needs to go back and forth between the slides too much or gets lost because of the page structure.
In movies, continuity is essential for storytelling. Having no sequence between scenes will create a jarring effect leaving the audience confused. But when done right, storytelling can effectively sell an emotion or thought to the audience. For that reason, continuity is a powerful technique to apply when selling your story.
And you might be wondering, but Biro, I'm not a movie director, how the heck am I going to tell a cohesive story with a bunch of slides?
Well, there are a couple of things you can do, I'll mention 3 starting with the simplest:
First, create a Table of Contents at the very start, just after the cover. This helps the reader understand what sections are included but, most importantly, the order and placement.
Two. Make sure you title each of your slides with a proper header representing the section the slide belongs to. This sounds common sense, but I've seen plenty of examples where there was no heading. You have to consume all the information there to deduct what the page wants to communicate. Is proper exhausting having to do this for every slide.
And finally, each of your pitch headers should be part of one or more coherent phrases or statements. What do I mean by that?
If you read out loud the headers of each slide, the words should have continuity and form phrases. Here's an example:
There is the problem, so we have our mission and a vision, and here's our solution, which stands out from the competition in a market with a large opportunity size. So our impressive team needs investment funds to execute the plan and invest in marketing and team expansion and grow our revenue by the time we reach the next inflection point.
I hope you got that because if you did and manage to structure your pitch similarly, you've nailed your story, and investors will love you for it.
The real value is you
The truth is early on, your startup will not have many achievements and validation. So what many tend to do to substitute is dive into details about why their technology or approach to solving the problem is exceptional. And I'm shocked how oblivious early entrepreneurs are about their prime validator when talking to early seed investors.
You see, many completely ignore adding a slide to talk about themselves and their founding team. This is a big mistake for early and risky ventures with little to no market validation like yours. The majority of private investors at this stage invest in your potential more than your startup.
You should have at least a slide or two talking about yourself, your experience, and achievements in previous ventures or employment. Your background, as well as what you contribute to the business so far.
I get it; you have a brilliant bulletproof idea, but what validates you and your other founders as the best fit team to execute the plan.
And speaking of the plan, what is yours, do you even have one?
Why do you need help
Many fail to properly vocalize what they need help with and how they plan to spend the investment money. And no, just saying sales & marketing will not cut it. No investor will trust you with their money if you're unsure how to put funds to good work and grow your startup.
Some would argue that they'd want the investor's experience to help them figure out how to grow. But that to me is just lazy talk. If you go to an investor with an idea or ready product, ask for their money, their time, and resources, yet you've put no effort into figuring out how you'll take your startup to the next level. Hmm, with that kind of attitude, something tells me you'll not care about growth execution post-funding either. And as an early seed startup founder, you can't really fully detach from this topic and just hire an expensive team of growth hackers to do all the work for you. These are just massive red flags.
Do research upfront, look at similar companies that are successful, and try and reverse engineer their growth tactics. Then put together a grounded plan with steps for at least the next 6 months and how results will impact your growth. I usually recommend having a mission for the funding budget, an inflection point to reach. For example your plan can culminate with your startup transitioning to be self sustained or profitable, fuelled only by the revenue. OR you use the seed funding to grow the company to a specific valuation and enable you to go for another round of investment.
It is really up to you how you see your business progressing and the means to get there. But do show you have a grounded execution plan as it will drastically increase your chances of locking in funding. Even if say, the investor thinks some of the strategies are not appropriate, at least you get valuable feedback ;)
Have a Contingency Plan
Now, this last one is not a typical section in seed funding decks. And it is more of an advice and great to have.
But before we go into why you should talk about this, let's see what the definition is:
Contingency plans are "what if" scenarios based on specific events that establish the "play book" to follow should that event occur.
You see, having a plan B for if things don't work out will be very well received by investors because it shows you're not planning to close shop if things don't go according to plan. It is also a sign of mature thinking and positions you as a well-calculated entrepreneur. One that people would like to partner with.
I know your growth plan is brilliant and will work. Still, we all know, especially after a ravaging pandemic, that plans don't always go as expected. So go through the exercise of coming up with at least route B if things don't pan out.
So I hope that my 6 tips can help you better your pitch and secure that much-needed funding. As mentioned, I'm not planning to talk in detail about how to write your pitch deck. For that, there are plenty of videos out there, and I linked Slidebean ones to this video. If you have any good suggestions and tips to improve decks for funding, put them in the comment box cause I'm interested.