In part 1 of our start-up series, we looked at some examples of pitch decks that turned into billion-dollar organisations. In part 2, we’re going to look at the essential components of your pitch deck.
While pitch decks will vary depending on the product, there are commonalities between pitch decks because investors need to know why this particular business is going to generate a return on investment.
You know the saying, “not everyone is going to like you.” That does not apply when pitching to investors. You need them to like you because they will work directly with you and your start-up. Creating a business relationship begins with the pitch. Your introduction will need to capture the attention of the investor(s) and convince them that you’re an ideal business partner.
This pitch could be greatly improved if they had a clear pitch structure. The investors had to ask lots of questions in order to understand the business model, competition, and whether there would be a viable ROI. And while the women did end up finding an investor, he said that working with them might “drive him batty.”
Pitching in the real world isn’t going to be like Shark Tank. Not everyone will give you the time of day to explain why your business is going to work. Having a strong introduction will keep your investor(s) listening long enough to want to invest.
- Problem: state the problem that you’re solving. Why does it need to be addressed?
- Proposed Solution: demonstrate how your business will provide the solution, and why they will solve it better than anyone else.
Product Demo: if you have the product ready, show the investors how it actually operates. Show them the user experience.
Business Model: how your business operates. Tell them your source of revenue, customer base, products, and pricing.
Competition: everyone has competition. If you can clearly demonstrate what your competitive edge is, then it’s likely your investors will understand where you fit within the marketplace.
Team: if you can get your people from anywhere, it’s probably not remarkable to an investor. They need to know that the reason why the business will work is that the team will make it work.
Fundraising Information: what does the investor need to do for you? And how much money have you raised or made already?
These are essential components to a pitch deck. But remember…
You Might Have the Best Idea, But Timing Determines Success
Bill Gross, an American investor, fund manager, and philanthropist, examined the reasons why start-ups failed. In a Ted Talk, Bill suggests that timing determines whether a start-up survives. His reasoning is that if the public isn’t ready for your product, then they won’t buy or use it. If the technology isn’t in place, then the product won’t work. If you release it too early, you risk releasing it in the wrong market conditions. If you release it too late, then you have too much competition. His research claims that a good idea only accounts for 28% of a start-up’s success and funding isn’t a large factor either. Only 14% of well-funded start-ups became successful.