by
Iskender Dirik
There is a lot of advice out there on how best to structure a pitch deck.
However, even the most experienced founders have the tendency to use pitch decks that are a long way off what I, as a VC, would expect to see .
Whilst there isn’t actually a perfect blueprint, I decided to try and create my own version of the “perfect” pitch deck. The perfect content for a slide deck depends on the stage, segment and character of each individual startup as well as the recipient (each VC has its own preferences).
So this is just Iskender Dirik’s suggestion for a pitch deck using “fictional” startup “DoggyHut”— as an example of what I would love to see when being pitched to.
By the way, the deck I have created is meant to be shared via email or as a handout and not a spoken presentation. I explain why towards the end.
Meet DoggyHut — A totally awesome and totally made up startup:
Most founders struggle to understand the simple logic that: a pitch deck is a teaser. Its goal is to whet an investor’s appetite and thus initiate the next stage/step (to get a meeting). What it is not meant to do is provide a deep dive into your company. I mean, do you think a startup has ever been turned down for having too few details in their pitch deck?
The attention span of a VC is shorter than you might think. Be as striking, simple and concise as possible. Laser-focus on the most important aspects of your business.
If I had more time, I would have written
a shorter letter.
If your startup is a movie, then the pitch deck isn’t even a trailer. It’s the few short seconds of teaser before the trailer even starts — a trailer for a trailer.
Before doing anything, crafting the right structure for your deck is vital. My DoggyHut Slidedeck structure-wise has a huge overlap with Sequoia Capital’s advice in “Writing a Business Plan”. Check also:
In case of a downround, investors receive anti-dilution to protect their stake. The exact number of shares depends on the calculation methodology, as shown in the example below.
1. COMPANY PURPOSE
What is your company's purpose? Why are you doing what you’re doing? Condense your pitch to a simple, yet powerful sentence solely about the purpose of your.
People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe
I personally, love to see a simple graphic that sums up your product/business model at the very beginning. Starting with a concrete explanation about the product/solution helps me to categorize and understand the information on the following slides (see The Pyramid Principle — Lessons from McKinsey). Ideally your key visual describes the “What” (what is your product) and the “How” (how does your product work/how do you achieve your mission).
Let’s take an intelligent toothbrush as example:
“An intelligent toothbrush.”
“Integrated smart sensors in combination with embedded AI software automatically adjust the most effective, individual program to whiten teeth.”
“We help people to smile more, encouraged by whiter teeth.“
2. PROBLEM
Give a clear and structured overview of the challenges that you address and solve.
The bigger and more dramatic the problem is, the more attention you and your solution will get. Thus making it a great idea to draw a picture of your target group’s pain point (without your product).
3. SOLUTION
Time to reveal your product, the problem-solving pain killer. Screenshot(s) or videos preferred. There is nothing better than “showing” instead of telling.
4. MARKET
Show that you address an appealing billion dollar market. Here is an explanation of the TAM/SAM/SOM concept.
However, TAM is not always the best way to highlight the attractiveness of a market: Why ‘TAM’ doesn’t matter to me.
The TAM concept can come with a “Niche Paradox”. The Tam Onion provides more context about that and a great tool to solve it.
5. WHY NOW?
Timing is one of the top reasons for startup failure. Watch The single biggest reason why startups succeed (Timing). Show why “now” is the best time for your startup to succeed.
6. COMPETITION
There is always competition, direct or indirect. Stress clearly how the competitive landscape is differentiated and what makes you unique (#defensibility #moat #unfairadvantage #secretsauce).
In the 2x2 matrix above, DoggyHut is positioned in the upper-right corner. What a surprise. Not. This is how most competitive / market landscapes in startup pitch decks look: You usually find the pitching startup in the upper-right corner. Should you compare the pitch decks of five direct competitors, you will notice their market segmentation model always shows them in the upper- right corner.
It's great to present VCs with a visual aid of how you see the market and your competitive positioning. But please be precise and reliable when it comes to your key differentiators. If you want to go for a 2x2 matrix, select dimensions that are truly the main differentiating factors for your market and competition — dimensions your competitors would choose, too. Add some bullets to your competition slides that outline what exactly differentiates you from the competition — today and tomorrow. Simply claiming the top right corner for yourself will not convince VCs. Everyone is doing it.
There is another possible perspective to look at the competition: Do you know who your biggest competitor is? Even if you’re the first mover in a market and there is still no second mover, you have that one, big villain: The Status Quo. Never forget how hard it is to convince humans to change their behaviours and to try something new. Your biggest enemy is The Status Quo – how your target groups are satisfying their needs today. You need to offer a significantly (some say: 10x) better solution that leads to less pain and/or more joy to convince your target groups to change their current behaviour and try your product.
One more popular pitfall: This is how many startups compare their own solutions with their competitors to visualize their key differentiators in a pitch deck:
This sort of comparison highlights all the fantastic features of your product, with every checked box you show just how much better your product is than your competitors.
It’s a nice idea to give VCs a visual explanation of how your solution differs from that of your competitors’. But to be truthful, these sorts of comparisons don’t really give a clear understanding of the important differentiators — often it is quite the contrary, here’s why:
A feature is not a sustainable differentiator. With some money and resources, every competitor could replicate your oh-so-great features.
Ticked checkboxes don't really tell me anything, in fact it could be a sign that your product is not focused enough.
All your competitors could come up with a similar benchmarking table, just with a different set of features that their product has.
Comparing by features could be the right thing to pitch to customers, but as VC I want to know what your sustainable key differentiators are. Features are usually not sustainable key differentiators. Technology, positioning, brand, a unique Go-To-Market strategy, team, etc. could be sustainable differentiators.
Get VCs’ attention by showing them your real differentiators.
7. REVENUE MODEL
How will you earn money — and who will pay for it?
Evidence your claims with your underlying assumptions. Benchmarks from comparable industries and companies are also great.
8. MARKETING/SALES
This could also be titled “User Acquisition” or “Go-to-Market” (GTM). GTM is normally used in B2B and Enterprise Sales. Show here that you are KPI driven. Give an overview of your marketing channels, Customer Acquisition Costs (CAC) and Customer Lifetime Value (CLV) numbers (if you have any) as well as payback periods to indicate that you do your homework, track and monitor decisive KPIs and have a clear assumption how this will lead to a profitable business.
See: Understanding the value of your customer: CLV 101.
However, please note: The False Confidence Of The LTV/CAC Ratio For Early Stage SaaS Startups
9. TEAM
Why is your team the best fit for making this startup idea a success? Show that you have the relevant experience, knowledge and skills for this business. If you have experience in working together, make this explicit. If you still need to complement your management team, make this clear.
Don’t overload the slides with everything your team has done in their life—this is not a CV. Instead focus on characteristics and experiences that are the most relevant to succeed in your specific area of business.
10. ROADMAP / FINANCIALS / TRACTIONS
Depending on the specifics of your startup and stage, you could go with “Roadmap”, “Financials” or “Traction” as the title and content of this section. This can also be divided into two slides. If your startup is (pre) seed stage, you probably won’t have enough financials to present and will instead need to focus on your roadmap and/or your traction (e.g. number of users).
The overall goal of this section is to:
Inform about the most important financial metrics and unit economics.
Give a rough overview about the company history and previous (and ideally also following) financing rounds.
Show traction/growth and ideally why “now” is a great (inflection) point in the company's history to invest in it. This is also a good place to show your hockey-stick or other striking curves/graphs that visualize your hyper growth. In the DoggyHut deck, you’ll find two alternative versions of this slide. Btw: Handling growth rates correctly could be tricky. Check out the problem with month-over-month growth rates by the fantastic Christoph Janz. And have a look at 3 Mistakes You’re Making with Month-Over-Month Growth Rates.
Highlight the milestones you want to achieve with the new funding.
11. VISION
End with the overall vision you have. What is your long term goal — what will your company look like in 5 or 10 years? Make the vision as concrete as possible by presenting numbers for your key goals.
12. CALL TO ACTION
Actually the vision slide is not the end. You need one more: The Call To Action. It is here that you clearly state what you want from the reader. Clarify the investment sum you wish to raise and what role the reader can play in achieving that (such as leading the round or contributing a specific amount as co-investor). Don’t forget to include contact information.
If you haven’t done it on the Roadmap/Financials/Traction slides, you can use this slide to highlight the milestones you want to achieve with the new funding.
a) Descriptive Titles
Always use a descriptive slide title that summarizes your slide’s core message. A VC should be able to gather the main pillars of your pitch story by skimming your deck just reading the titles of each slides (and nothing else). Imagine you’d copy the titles of all slides together — the end result should look like an executive summary of your pitch deck.
b) Keep Text to a Minimum
Reduce the content/text of each slide as much as possible. No VC has the time and attention span to go through an e-book-length deck full of text. Use large font sizes and be as visual as possible. Never do what I did in my early days when I created fundraising slides like this:
Horrible.
c) Slides that tell a story a.k.a. “when it’s okay to have more slides”
There is one exception to my “not more than 12–13 slides” rule. You can have more slides if you use your deck for effective storytelling, e.g using one hero visual with no more than a few words (max 1–2 sentences including the title) per slide. Formatting your additional slides like this will give the reader an engaging experience that reveals one piece of your pitch story after the other.
This approach means that instead of aggregating a couple of points on just one slide, you decouple them and put each point on a separate, easy-to-digest slide.
Here is an example. This is the “Why Now” slide from my slide deck:
You could easily split this up over a couple of slides:
This approach has another big advantage: You can transform your slides much easier into slides for a spoken live presentation … which brings us to our last topic:
d) Handout vs. Deck for Spoken Live Presentations
Again: The deck I created is meant to be provided via email/as handout. This is not the perfect deck for a spoken presentation and a pitching situation! Don’t do, what most founders do: Don’t present your printout/handout slides! Your slides for spoken presentations need much less text — you present your story, the slides just support the story, but don’t repeat it. Thus use pictures and try to use not more than six words per slide.
This is a slide for a handout deck you send to VCs via email:
However, this would be the version you present during a live presentation:
Good luck, feel free to reach out to me with any questions, and don’t forget me when you successfully raise millions of Dollars or Euros off the back of these tips and tricks!
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