Like with the first impression in social situations, you only have one shot at a first impression with your pitch deck in front of investors. Pitch decks are essential for entrepreneurs because they help investors understand your business model and financial forecast. Also, when you're creating your pitch deck, remember that the point of the deck is to entice investors. This means that it's crucial to think about what will appeal to them.
Many founders create decks focused on customers' problems and unpack all of the amazing things their product or service does to solve them. It's an understandable error—after all, you want your customers to understand how much value your product provides. But if your potential investors aren't customers, they won't care. Instead, focus your pitch on how your company is positioned to succeed. When you're looking to raise capital from investors, be careful and avoid adding these 5 forbidden items to your pitch deck.
1. Don't put too many words in your slides.
You want to minimize the amount of text on your slides. It's too distracting. Use visuals and fewer words to convey your business. This allows you to speak with confidence without relying on the text like we used to do PowerPoint presentations in high school. Too much text on slides gives the impression that your business is too complicated to understand. It creates a barrier between you, the investors, and the audience.
This means if you write an entire book on your slide, there's little room left for the viewer to connect and imagine how they can use your product. If you want someone to use it and love it, you've got to give them enough of the story so they can see themselves using it.
You don't need to explain every detail of what goes on behind the curtain of your offering, but you do need to give them enough understanding so they can see how they can benefit from it. Graphics and visuals are more enticing and inviting. However, don't overwhelm the visuals. It's a delicate balance that you need to create.
2. Don't have too many slides.
Remember, sometimes you have 90-seconds to pitch—other times it's 3-minutes, etc. Investors don't have a lot of time to waste, so if you have 30-40 slides about your business, you'll not only bore your investors, but your mission, impact, and how your product or service works will get lost. A good rule of thumb is to have 10-12 slides on a pitch deck depending on how long the pitch is, 20 maximum.
In addition, don't overcomplicate your pitch with fancy pitch templates or designs and stay clear from animation or videos (unless the pitch competition says you can use videos). We all know tech problems happen, and you don't want to disrupt the flow of your pitch because your video isn't working or it's incompatible with the tech. Less is more. In fact, Vidyard raised $75 million using one pitch deck. That may not be the standard. However, it shows less is more if 'the less' is powerful and concise.
3. Don't take too long to get to the point.
A study in Denmark showed that our attention spans are narrowing, which means entrepreneurs have to work harder to provide the meat of their content earlier on to grab people's attention. And when you think about investors who spend a lot of their time thumbing through pitch decks or participating in pitch competitions, they don't have the time for you to take 5-6 slides to get to the point. Get to the problem that you're trying to solve as quickly as you can. Telling your story is an integral part of your pitch presentation. However, there's no need to build anticipation or tell an elaborate story.
4. Don't use technical language and list every last feature of your product.
Your presentation should be so simple that you can explain it to a five-year-old. You should never, ever list five or more features in your pitch deck. Investors only care about the central problem you are trying to solve through your product or service and how profitable your business is. And most of them will find ways to parse what they need from the details of how you do it. They can ask follow-up questions if they are interested in the nitty-gritty details of your product or service. Resist the temptation to show off your awesome product roadmap and keep it simple by focusing on the pain point your business hopes to solve for a specific customer segment. Powerfully hit the clear points.
5. Don't use a bunch of crazy charts or put too much information for your financials.
I know it looks great to have that exceptional chart of your growth that looks like a hockey stick. Instead, you should have a simple profit and loss statement that gives all the critical financial information in one place. Each financial need has to be customized based on the maturity of your business. Make it realistic and show the data over time.
Choose one or two key metrics. This could be the number of sales, the number of your active users, or your subscribers. Investors will also ask you questions about how payments are exchanged and how much it costs you to acquire new customers and even maintain the ones you have. They want to see your growth capabilities and will like to discuss the assumptions behind your numbers.
When you're calculating your data, Story Pitch Decks gives a great breakdown. Your financial slides should show:
Income [35.8%]
Expenses [24.1%]
Business KPIs [20.4%]
Profitability [10.5%]
Market Sizing [5.6%]
Past Funding [3.1%]
ROI [1.9%]
Be mindful of your visuals. It should show the data in a simplistic easy to understand way:
Use Charts & Graphs
Make it Realistic & Accurate
Show the Data Over Time
Lastly, every investor will want to see your financial forecast, so take some time to think about your industry's growth and the recommended timeframe for projections. Be sure to show financial forecasts for at least three years and don't guesstimate. But again, keep it simple, show key data points, and discuss every last detail of these numbers in case investors ask you about them; however, not every last detail needs to be included on the slide.
Investors are looking for companies that are best positioned to succeed. They are interested in the market, the competition, the team, and the timing of your venture. The purpose of a pitch deck is to paint a picture for investors of why they should invest in your company.
A pitch deck is like a personal elevator pitch for your company. It should present your business to potential investors in the best light possible. The outside world does not see your company the same way you do, and it's your goal with your pitch to give them this type of insight. A good deck should present the information, referring to other resources if they need further details about specific areas in your business. The key is to focus on the main topics and convince them you are professional, responsible, and able to run your business just as you described it.
By now, you should have a solid grasp of the 5 forbidden items to avoid including in your pitch deck. With knowledge about these 5 forbidden items to avoid, you can create a pitch deck that investors will be eager to read through from beginning to end. With knowledge about these dos and don'ts, you can create a pitch deck that investors will be eager to read through (or watch) from beginning to end.
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