What makes a good pitch deck for investment?

Attracting investment can be a necessary but daunting proposition for many founders.

Whether you’re a pre-seed start-up or a scale-up looking to secure series B funding, developing a strong pitch deck is fundamental to the success or failure of impressing investors but knowing exactly what to include, and to what level of detail, can be an artform.

Whilst the ultimate goal may be to raise capital for your business, the immediate goal of a pitch deck is to pique the interest of potential investors, and securing that all important follow-up meeting.

In this guide, produced in collaboration with Clarendon Fund Managers, we’ll talk about how to craft your business’s pitch deck to maximise your chance of securing investment.

What is a pitch deck?

Put simply, a pitch deck is the visible element of your presentation and is designed to support your value proposition.

Some would consider it like the “shop front” of the business, trying to entice more interest.

It’s a good idea to produce different versions of the pitch deck; a pared back version featuring just the main takeaways for use when you are presenting live and a more detailed version you could send as a pre-read or follow up.

This version can contain more information but always remember that the purpose of a pitch deck is not to secure funding, but to secure the second meeting.

It is at that second meeting where the potential investor will likely go into much more detail on what has been presented.

On that note, whilst there’s no hard and fast rule for how long a pitch deck should be, most tend to be around 10-15 slides in length and are designed to inspire rather than inform.

The real detail can come later when you produce a due diligence pitch deck which is one of the things a potential investor will ask to see if they declare an interest in funding your business.

It is always good practice to start setting up your data room ahead of meeting investors as then there is no delay in giving them the additional information they will request as the conversations progress.

Regardless of your company's funding stage, your pitch deck should cover these important topics:

• your product
• the market
• your people
• the financial ask (and detailing how those funds will be used)
• exit analysis.

Your pitch deck needs to be supported by evidence and insights and should showcase you and your business as experts in the field, inspiring investor confidence.

What to include in a successful pitch deck

While there isn't a one-size-fits-all pitch deck template for every start-up or scale-up, there are key storytelling elements that can help you truly encapsulate your business's distinct narrative.

These elements should be supported with plenty of evidence to back up your assertions, helping to persuade investors to consider your business as a strong investment opportunity.

It’s also worth remembering that investors see hundreds of pitch decks a year so don’t be afraid to get creative and think innovatively.

With that in mind, here are our tips for what to include in your next pitch deck to investors.

The problem you’re seeking to solve

The best pitch decks waste little time in getting right to the heart of the problem, giving the audience a clear starting point and helping them relate to your target customer.

Key to this is your problem statement – which outlines the issue your product or service aims to tackle.

Your problem statement should be specific, personal, and zero in on the most significant pain point (though you can mention other pain points during your presentation).

Don't shy away from discussing the consequences of leaving the problem unresolved.

This helps create empathy for customers and a sense of urgency in your investors' minds, making them eager for a solution.

As with all slides, it’s important to support your description of the problem with evidence, be it surveys, interviews, or other data points.

Finally, wrap up this section by explaining why current solutions don't quite hit the mark in addressing the problem.

This perfectly sets the stage for introducing your audience to the next section: your product.

Present your product as the solution

Following the problem, your pitch deck should present your product as the solution.

This slide should act as a direct response to the pain points presented in your previous slide.

Crafting a succinct solution can be a bit of a challenge for many entrepreneurs.

Being deeply involved with the product or service can make it hard to step back and describe it in a clear, objective manner.

Resist the temptation to delve into every detail of your product.

There will be plenty of time for that in the desired second meeting.

Instead, concentrate on what gets your users most thrilled and what makes your product unique.

An important point to note if applicable is what cost savings your product can bring either in terms of saved labour or other overheads.

This could be what makes your product attractive to potential customers.

Investors may also be keen to understand how challenging it would be for rivals to copy your solution, so if you have any intellectual property it’s good to mention it, or detail what makes your product defensible.

This is known as your "competitive moat," your long-lasting edge in the market and it’s a good idea to highlight it.

Stay positive but realistic, as over-the-top enthusiasm might raise eyebrows among investors.

The size of your potential market

In this part of your presentation, you'll be defining the market size.

Be ready to outline your customer segments so investors can get a clear picture of your strategy.

If your business is B2B, you might typically categorise based on factors like the number of employees, the technology used, or the location.

Meanwhile, business-to-consumer companies often zero in on personal attributes such as age, life stage, or household income.

At this point you may also wish to devote some time to talking about your competition.

Understanding the other businesses operating in the industry is just as crucial as understanding your product and your customer.

Showcasing a thorough competitive analysis demonstrates that you're aware of your position in the industry and how you plan to outperform the competition.

The go-to visual tool for competitive analysis, especially for tech companies, is called the Gartner Magic Quadrant.

It neatly categorises competitors on a grid into four groups: leaders, visionaries, challengers, and niche players.

Another option is to use a tick box of what features each of your main competitors have and highlight what features your product has by way of advantage.

Your operating model

Your revenue and operating models should offer a comprehensive look at your business plan, addressing the challenges brought up in the previous section.

This could be the most critical part of your pitch deck as potential investors are often heavily focused on revenue.

However, it can also be a bit tricky.

For early-stage and pre-revenue companies, market research might be the only way to identify the best business model, and the best laid plans may go awry once funding has been secured.

But don't worry, experienced investors understand this.

Be ready to share estimates for gross revenue, margin, and profits, along with your price points, and be prepared to discuss how you landed on these figures.

It’s also a good idea to include your marketing plan and your unit economics, even if they're still a work in progress.

Communicating your projections

One of the most effective ways to win over investors is by showcasing a track record of success.

It can be well worth devoting space in your pitch deck to a number of key areas:

• Revenue: Show them the money you've made!
• Customers: Let them know about the deals you've sealed or the monthly active user stats you're proud of. A nice visual you might consider using in your pitch deck is of the logos of any companies currently using your product.
• Team: Talk about the talented consultants, advisors, and non-executive directors you've brought on board.
• Operating capacity: Share any advancements like new sales offices opened or retail space you've secured.

It could also be a good idea to discuss any product milestones you’ve already achieved such as the creation of a prototype.

Visually this can be presented in your pitch deck by way of a road map.

You might be surprised to find out that investors often care more about the robustness of your business assumptions than your revenue and profit projections alone.

This is because those projections often lack substantial data, whereas business assumptions are based on common sense and are easier to grasp.

The aim of creating a detailed forecast is to transparently present these assumptions and rigorously test them to see how they affect performance.

Make sure to explain why you think your chosen inputs are reliable.

You need to explain why you have used the numbers in the projections and why they are increasing year on year, which can be from entering new markets, releasing additional features, expanding the team etc, so it’s a good idea to avoid using numbers that you aren’t prepared to stand by.

This rationale is what sets apart guessing from estimating, and it shows that you've got a clear understanding of what needs to happen for your business to turn a profit.

Introducing your team

Investors need to feel assured that your team has the necessary skills and experience to bring your venture to life.

It's no surprise that founders with a successful track record have an easier time raising capital.

But if you're new to fundraising and haven't had a successful exit yet, don’t be concerned, you can still impress potential investors by highlighting these aspects in your pitch deck:

• The dedication and time commitment of the founders
• The industry experience of your core team
• The business acumen and managerial prowess of your core team
• The technical skills your team brings to the table

Remember, this is your final chance to boost investor confidence in you and your product before you make your funding request.

Investors are also keen to see details of any advisers in the sector that you have reached out to for guidance along the journey.

The ask

You should conclude your pitch deck presentation with the ask of your investor and outline how they can play a pivotal role in the development of your business.

You'll need to outline how much funding you require, what you plan to use it for, and how this investment will boost the value of your business.

A pie chart can be a good visual representation of how the funds will be split across areas like team hires, marketing, R & D, production etc.

Consider framing the use of funds in relation to your planned milestones such as the launch of your product, achieving break-even, or expanding your product range.

If you feel comfortable, you can also provide details about the valuation guidance and/or equity you're offering.

It is also worth adding a slide on how investors could ultimately exit the business.

Investors will be keen to see how they could make a return from their investment, so some light analysis of recent mergers and acquisitions activity in your sector is a good idea to include.

If this is your first-time pitching using a pitch deck, don't hesitate to seek advice from investment advisors.

As with all financial decisions, it’s a good idea to seek independent specialist advice before entering into any agreements.