Headquartered in San Jose, California, Early Growth Financial Services provides accounting, CFO, tax, and 409(a) valuation services for venture-backed startups in the United States. It also has offices in San Francisco, Los Angeles, Seattle, Chicago, and New York City.
We met Brieanne, the San Francisco Market Manager for Early Growth Financial Services, through a mutual friend. Below, she provides guidance for startups seeking equity funding regarding how to create a winning pitch deck that investors will love.
How to Create a Winning Pitch Deck
By: Brieanne Traube, Market Manager of Early Growth Financial Services
In February 2016 Gadiel Morantes, Chief Revenue Officer at Early Growth Financial Services, sat down with Marc Phillips of Arafura Ventures and author of Inside Silicon Valley: How the Deals Get Done to talk about what makes a winning pitch deck. Mark and Gadiel walked through the dos and don'ts of creating each slide of the deck. The link to the actual webinar can be found here and is based on Marc's book, which we recommend to all founders.
First and foremost preparation is key. You will most likely only have half an hour with a VC so you want to make sure you have structure to your presentation. You want your story to be memorable but also to make the VC feel like he is a part of that story. One important piece of advice is to keep things moving quickly.
Slide 1 should include an image, the company name and the elevator pitch. This slide should show what the company stands for. Think of this slide as a billboard for the company just like you would see a billboard for a movie - it should make you want to see the movie using imagery and keywords.
Optional: At this point, it's optional to include a slide on the management team. If you have rock stars on the team put them up front, especially if you don't know the investors. You don't need to spend too much time talking about it, but make sure to include the level of experience, pictures, and relevant skill sets of the founding team.
Slide 2 is about defining the problem. You don't need to go into details but just frame the issue. For example, the problem is X - then you can move into the next slide: the solution. You also want to pick one major problem to focus on. There may be many smaller problems but here you'll want to keep the focus on the immediate issue.
Slide 3 is about explaining you solution. This is the "wow" moment. If you can, pull out your phone and show them the app or product. Make sure to do this with images and pictures. Sometimes the solution can be complex but this slide is essentially "lifting the hood" to show how your technology works. Showing the user experience is also important here if there is one.
Slide 4 should show how big the market could be. Sometimes the market size is easy to validate but other times the market may be new or untapped. Here you'll want to show simple math around the potential market. It's important that the investor can understand how you're determining the market size and if possible what the initial and long term goals are.
Slide 5 discusses the product and/or the technology. Again, here you'll want to pictorialize as much as possible. Investors won't always know the exact science or technology behind what your product is so putting it in words can be unclear. Showing technology in pictures can be much easier to understand. This part of the presentation is a good place for the CTI or main technical person to shine.
Slide 6 discusses defensibility & IP. By now, VCs usually know if they are interested or not but you'll want to show where the IP is, how scalable the business is, and demonstrate that your technology won't be easy to copy or steal. Highlighting the uniqueness of the product and demonstrating that the founders are best people to grow the company is important.
Slide 7 is your go to market plan. Having a clearly thought out path to achieving your first customers and growing your client base is imperative. Will you use a direct sales model or utilize partnerships or channel marketing? Here is where you show investors how you intend to find and capture your customers.
Slide 8 is the competitor matrix. The competitor matrix is one of the most important slides, but it often gets left out. There will always be competitors and this is a good thing - it validates the market. You'll want to tell VCs who your competitors are and how you fit in among them or perhaps how you set yourself apart. If you think you don't have any competitors you haven't done your research.
Slide 9 is where you get into revenue projections. Try to include years 2 through 4 in your forecast. Make sure to include operating expenses, cash burn and head count. This will help investors understand how much runway you will have and what your unit economics are. It's great to show your company's success financially. Here's where you need accountants to help review your numbers and your forecasts. VCs will usually find experts to help on forecasting and projections if you don't.
Slide 10 lists your advisors. Pick advisors that can do things you can't do and that will like you no matter what happens with the company. Your advisors should believe in you and your mission and not be in the role for the cash. You should know how your advisors will contribute to your business over time. Don't be afraid to have many advisors or change them over time based on the company's stage.
Slide 11 should detail your use of funds. Here is where you ask for how much money the company will need and what valuation you are looking for. In addition, it's good to show what you will be spending that money on. If the valuation hasn't been determined and you're looking for a lead investor you should honestly discuss that during the meeting. Be sure to have an idea of what you're looking for in terms of valuation but be open to discussion.
Slide 12 discusses the exit strategy! This is not a necessary slide but some investors like to see it. They want to know what the anticipated and potential paths to exit could be.
Lastly, be confident and know that while there are may be conflict and questions from investors, this is normal. Make sure to stay calm and be honest with investors if they have a question that stumps you.
Practice with your friends, family and other co-founders. Take their comments and questions to heart. If they are having trouble understanding your story or your technology, it's likely that a VC will too.
Also, when presenting with your team, make sure to be clear on who speaks when and have internal cues that indicate change of presenter. It's great when the CTI or a co-founder can share the load of presenting. This also helps VCs to understand the team and how you work together. Most importantly, remember that practice makes perfect!
Smith Shapourian & Mignano, LLP is available to answer any questions or concerns startups may have regarding funding and financing for startups. You may contact us for a consultation to learn more.
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