The world's top tech startups rely on venture capital to scale to new heights. In fact, 40 percent of companies founded between 1979 and 2013 received venture capital. These funds allow tech startup founders to acquire top tech talent, develop new product enhancements, test new markets, and more. However, the path to startup investment can be treacherous.
"For startups, securing the first round of funding is a daunting process," says Gavin Christensen, managing partner of Kickstart Seed Fund. "Doing so requires founders to take what is often a very complex idea, product or solution, and boil it down to dollars and cents for investors who, for the most part, only care about how quickly they can make their money back."
How to Create a Compelling Investor Pitch Deck
Before seeking venture capital investment, startup founders must absolutely achieve product-market fit. Validating products/services, gaining some early traction, and acquiring a strong user-base is a mission-critical first step in attracting leading investors. From there, it is time to build a compelling pitch deck.
"Startups frequently prepare a 'pitch deck' to present their company to prospective angel or venture capital investors. The pitch deck typically consists of 15-20 slides in a PowerPoint presentation and is intended to showcase the company's products, technology, and team to the investors," says Richard Harroch, contributor at Forbes.
Are you struggling to land venture capital investment? Follow these simple steps to build a more compelling investor pitch deck:
Follow a Formula
The best pitch decks follow a simple and easy-to-follow formula. In fact, pitch decks typically include the following components:
- Vision: What does the startup hope to accomplish?
- Traction: What has the startup accomplished thus far?
- Market Opportunity: What market indicators suggest that the product/service will succeed?
- The Problem: What customer pain points does the product/service remedy?
- Product/Service: What does the startup do?
- Revenue Model: How does the startup generate capital?
- Growth Strategy: How does the startup generate users?
- Team: Who supports the startup?
- Financials: How much capital does the startup have?
- Competition: Are there any competing products/services?
- Investment Ask: How much capital does the startup hope to raise?
More important than the structure and framework, however: startup founders must paint a coherent, thoughtful, and engaging narrative. Be sure to cover all the bases, but arrange those building blocks in a way that paints an intriguing story about your startup.
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Solve a Problem
The best investor pitch decks cover a single problem. More importantly, the deck should showcase the startup's unique ability to address that problem quickly and efficiently. In order for the investor to see real value in the startup, it should be an easily relatable and painful problem. Start by looking for ways to position the startup as the "hero" of the story. How will the startup "slay" the villain?
"Create a simple solution sentence," recommends Donna Griffit, editor at Jolt Resource Center. "We're doing X (solving a problem) for Y (a specific audience) by Z (in an nutshell, what are you? A platform/app/solution/tool/etc.) and as a bonus, your secret sauce that is enabling you to do it."
Use this positioning statement as an opportunity to showcase the startup's unique qualifications and expertise. Better yet, use it as an opportunity to get the investor excited. Why is your startup the best at what it does and how will you help make the investor even more money?
Amplify Your Vision
Serial entrepreneur Mitchell Harper raised a total of three rounds of venture financing in the last three years, totaling $75 million. Harper's number one top tip for taking an investor pitch deck from ordinary to extraordinary is making your vision ten times bigger.
"Having a compelling vision for where you want to take your business is important, but most first-time entrepreneurs think too small,"says Harper. "I know I was guilty of this a few years ago. I can tell you now, whatever your vision is, it needs to be bigger and more compelling."
Most venture capitalists prefer investing in startups that offer scalable products/services. Scalability is showcased by the startup's ability to increase total output under an increased load. Be sure to showcase the scalability of your product, but also be realistic about your startup's vision. There is nothing worse than over-promising and under-delivering, right?
Is now the right time to scale? Follow this simple formula for building a billion dollar tech company. For more, check out the Startup Unicorn Checklist.
Emphasize Metrics
Finally, investor pitch decks should highlight growth metrics. Which metrics should you emphasize? Most subscription-based startups will showcase the following:
- Customer Acquisition Cost (CAC): How much it costs to engage new customers.
- Customer Lifetime Value (LV): How much the customer is worth.
- Monthly Recurring Revenue (MRR): How much capital the startup makes per month.
- Projections: How much money the startup will be worth in five, ten, or fifteen years.
Scale at RocketSpace
You have built the perfect pitch deck — now what?
Find the right investor for your startup by joining RocketSpace's curated tech ecosystem. With access to a growth-oriented network of industry-leading tech entrepreneurs, members frequently share key insights and resources related to venture capital. RocketSpace members can give you special behind-the-scene access to their personal network of top investors!
RocketSpace exclusively admits Seed to Series C startups with a minimum viable product in place. More than investor referrals, RocketSpace provides valuable networking opportunities, panel discussions, flexible coworking space, and more. Is RocketSpace right for your tech startup?
Is RocketSpace right for your tech startup? Schedule a tour at our San Francisco or London locations!
