Tell a Strong Story and Present Persuasive Deck Elements

Tell a Strong Story and Present Persuasive Deck Elements

One of the most challenging aspects of being an entrepreneur is creating an effective pitch deck. The purpose of your initial presentation is to persuade potential investors to offer you a follow-up meeting, even though your ultimate goal is to raise money. Building that relationship requires carefully planning and organizing the elements of your pitch deck so they tell a compelling tale.

In 2021, the venture capital sector experienced unparalleled growth as it invested record sums in businesses and welcomed record numbers of new investors. But that does not imply that raising money for businesses has become simpler. The contrary was frequently true, making it more difficult for many businesses to stand out due to market excitement and capital competition. Startups need to improve their fundraising strategies more than ever.

I have assisted various startups in North America, Europe, and other regions with the development of fundraising strategies ever since I made the switch from a corporate finance executive to a consulting position. I often advise my customers that it takes skill to construct a pitch deck that both makes a strong business case and stirs up feelings in potential investors.

A pitch deck’s narrative structure is comparable to that of a movie trailer in that it sets up the major plot points while keeping the viewer’s attention and enthusiasm high. There are ten distinct beats that should be present in a pitch deck.

.The issue: Personalize the issue as you introduce the topic to make your audience feel stress.
.The Fix: Express a glimmer of hope by pledging to fix the issue.
.Product Features: Highlight the key elements that enable the solution to be used, increasing the trust of potential investors in your product.
.Introduce your scenario and characters in the market. Show potential investors who will profit. Start forming an image of your customers in the eyes of your investors.
.Competitive Landscape and Potential Risks: Reveal the impending dangers and chances to heighten the tension once more.
.By presenting a convincing plan for success, reassure your investors about your revenue and operating model.
.Traction: Share your track record of achievement to inspire potential investors’ faith in your ability to carry through.
.Build excitement by making predictions about where you’ll be in five years.
.Team: Identify your associates. Make your company more relatable to investors. Explain how the members of your lineup are capable of carrying out your promises.
.To raise money, explain to potential investors how they would help this idea come to life and build urgency by highlighting why you need them right away.

I’ve prepared an example deck for a hypothetical startup company called Office Flex, an online booking platform for remote employees looking for a co-working space, to assist explain how these concepts function both separately and collectively. To get the product ready for launch, it is looking for startup money. This condensed deck is merely meant as an example; you might require more than one slide for each topic depending on the intricacy of your company or your fundraising request. Just make an effort to keep it under 20.

1. The issue

Any compelling story must have tension to keep the reader’s attention and elicit an emotional reaction. That tension is introduced by the problem statement.

Although you can cover other pain points in your presentation, the problem statement—the explanation of the issue your product or service will address—needs to be precise, individualized, and concentrated on the largest pain point. Be up front about the negative effects of not finding a solution to the issue so that your investors will feel a sense of urgency to find one.

Finding the right co-working space can be challenging, despite the fact that there are many of them, according to Office Flex’s creators. Remote employees require a simple method of finding a co-working space that meets their requirements.

2. The fix

Don’t hold out on the solution; give investors the answer right away. This slide must specifically address the problems presented in the first slide in order to keep your story concise and clear. Otherwise, you’re just creating an issue out of nothing.

Many business owners find it challenging to come up with a succinct solution because they are frequently too attached to their product or service to take a step back and define it in a straightforward, objective manner. Resist the impulse to go into great detail about your goods. Instead, concentrate on what gets consumers most pumped up.

Anyone may search for local co-working spaces on Google, but Office Flex offers value by assisting users in finding the places that best suit their needs and making booking simple.

3. Product features

Since this is the key that will open the solution you just offered, demonstrating the features of the product is the pitch’s main focus. Here, you want to concentrate on what makes your product unique and how it solves the main issue you identified. Imagine it as a real estate listing that focuses on a home’s most unique qualities.

Investors are also interested in learning how challenging it will be for rivals to duplicate your offering. This is your “competitive moat,” the long-term competitive advantage you have. Be sure to emphasize this. Nevertheless, use restraint and stay away from overly technical and jargon-filled explanations of how the product functions. Be upbeat but realistic because overconfidence might backfire and cause investors to become wary.

Through a patent-pending recommendation engine, Office Flex connects users with their perfect workspace and also produces user insights that can be sold.

4. Introduce your scenario and characters in the market

It’s time to describe who this product will benefit now that you’ve established the setting for your tale and captured the attention of your audience. Investors want to know if there is a large market for the issue you plan to address, as this indicates a promising future for revenue development.

You’ll define the market size on this slide. In order for investors to comprehend your strategy, you should be able to articulate your consumer categories. While business-to-consumer enterprises concentrate on individual characteristics like age, life stage, or household income, business-to-business companies often segment based on employee headcounts, technology used, or geography.

Although the creators of Office Flex intend to grow the company nationwide, they are concentrating their launch in three US cities with sizable numbers of remote workers: New York, San Francisco, and Charlotte, NC. 750,000 of the 12 million remote employees in the US who make up the total addressable market (TAM) and the serviceable addressable market (SAM) both reside in just three locations. The serviceable attainable market (SOM) for co-working spaces in the US is roughly 107,000 persons, or about 1 in 7 remote workers.

5. Competitive Landscape and Potential Risks

The next step is to increase investor trust in your capacity to fulfill your commitments. Raising the tension once more is a good approach to accomplish this—of course, so you can release it later.

Knowing your competitors is just as crucial as understanding your product and target market. A thorough competitive study demonstrates that you are aware of your position in the market and your strategy for outwitting rival companies.

The Gartner Magic Quadrant is the most well-known graphic representation of competitive analysis, especially for tech companies. It divides competitors into four categories on a grid: leaders, visionaries, challengers, and niche players. It’s not the only choice, though. The creators of Office Flex have decided to show their rivals on two axes that reflect what their clients want.

Adding a presentation that candidly exposes your issues to your competitive analysis is counterintuitive yet helpful. By Founders’ founding partner Eric Lager has nicknamed this open discussion of risk the “ugly slide.” This analysis is supposed to show that you’re not naïve and that you’re taking the venture capitalist’s time and money seriously while also providing insight into what keeps you up at night.

As Office Flex has done in this example, I strongly advise founders to provide an unattractive presentation along with their competitive analysis. In it, the founders outline their main risks as well as how they plan to deal with them.

6. Business and revenue model

It’s time to show how you’re going to carry out your plan of action now that you’ve shown that you comprehend the terrain ahead. Your revenue and operating models should give a thorough overview of your business plan and address the tension that was raised in the preceding section.

Due to the fact that venture capitalists’ primary concern is revenue, this may be the most crucial section of your presentation deck. However, it can also be the most dangerous aspect since, for early-stage and pre-revenue startups, market research might be the only method to identify the ideal business model—and reality might turn out completely otherwise. Fortunately, experienced VCs are aware of this.

In addition to your price points, you should be prepared to offer projections for gross revenue, margin, and profits. You should also be prepared to discuss how you arrived at your price points. Even if you’re currently optimizing them, you should give specifics about your unit economics and marketing strategy.

This is a lot of information to include on one deck, so you might decide to break it up into two presentations or explain some of it verbally. Office Flex chose to emphasize its operational strategy here after mentioning its price points in the competition slide. Investors are given a better sense of the users of Office Flex thanks to the consumer personas.

7. Traction

A track record of accomplishment may be the best method to convince investors to believe in you. Use this part to highlight your accomplishments and future goals in areas like:

Revenue Clients, including signed agreements or statistics on monthly active users
recruited team of consultants and advisors
operating capability, such as opening sales offices or securing retail space

8. projections

This is your chance to persuade potential investors that this project will be worthwhile.

Many entrepreneurs are shocked to discover that investors are much more concerned with the credibility of the business assumptions than with actual revenue and profit estimates. That’s because business assumptions are generally accepted conjectures and are simple to comprehend, whereas predictions frequently have very little facts to support them.

The purpose of creating a thorough prediction is to express these assumptions in detail and stress-test them to determine how they affect performance. Describe why you think the selected inputs are reliable. This reasoning will show that you are aware of the distinction between guessing and estimating and that you know what is required to establish a successful firm.

Office Flex’s predictions don’t mention money at all, other from the desired yearly recurring income amount for Year 1. Instead, they focus on the factors that have the most impact: global expansion, product development, and data gathering.

9. Team

Every business connection is built on relationships between people, and investors want to feel confident that the team working on your project has the knowledge and expertise to see it through to completion. Because of this, raising funding is substantially simpler for successful founders. If you haven’t previously had a successful exit, think about include the following in your deck:

The founders’ time commitment
The core team’s years of experience in the industry
Background in business and management of the core group
technical expertise of the core group

Before you make the funding request, this is your final chance to gain investors’ trust in you and your offering.

10. Fundraise

You now describe the part an investor will play in developing your product. You must at least specify how much money you require, what you need it for specifically, and how the investment will affect the company’s value. Make sure to explain how the money was used in relation to the targeted milestones you have set, such as your break-even point, any significant growth, or the creation of your product.

You can also go into further depth about the valuation advice and/or equity you’re offering. For founders who have never participated in a pitch, investment advisors can provide a lot of value.

Office Flex is requesting $500,000 to expand its staff, turn its minimal viable product (MVP) into a more robust app, and enhance its market research in order to position itself for greater success when it launches. By contrasting this request with previous rounds, it subtly conveys a sense of scarcity that encourages investors to join.

The Postscript

There isn’t a one pitch deck design that works for all startups, but there are key narrative beats that can help you convey the heart of your business’s particular story and persuade investors to support you in seeing it through.

Ironically, pitch decks become so monotonous that most venture capitalists despise them. Keep in mind that an increasing number of these presentations are being delivered to your audience, so don’t be afraid to add some flair and imagination to make yours stand out. At the same time, make sure you have all the information and understanding necessary to respond to the inquiries your presentation may raise.

Investment decisions involving venture capital are some of the most irrational since they are based as much on intuition and gut instinct as on financial analysis. Unlike bond allocations, portfolio weightings, or hedges, each financing decision expresses a conviction that a specific business and a specific team have the drive and resources necessary to grow quickly, overcome obstacles, and deliver exceptional value to its backers. It takes a fantastic narrative and a compelling method to convey it to convince someone of this.

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