Updated: Nov 9, 2021
As a startup mentor, I was frequently asked, "How do I create an effective pitch deck of slides? What do I put into my decks?" So here are some pointers to help guide the crafting of a business venture pitch deck.
I visualise a pitch deck as business storytelling - selling a compelling vision and promise that resonate with your audience. See "5 Essential Tips For Business Storytelling" by Mike Kappel, Forbes.
And here is a story spine and framework I common use:
1. Describe the Current Situation
Challenges faced by existing users or gaps in the industry
Opportunity for change & improvement
Do not spend more than 10% of air-time here. We prefer to hear your solution than the current gaps in the system.
2. Proposed solution and resolution (Your plan for value creation, value delivery, and value capture)
3. How value is delivered (how does it work)
4. Scope of business activities
5. Value proposition offered
6. Competition & your competitive advantages
7. Mode of value capture (How is value monetised). For example, sales of the product, direct sales, channel distribution, recurring subscriptions, service fee, platform matching fee, etc.
8. Current phase of the startup (very briefly, maybe verbalised instead). Consider Steve Blank's Investment Readiness Level is a good reference. A deep-tech technology product company can consider using the Technology Readiness Level.
Image Source: Steve Blank
9. Call to Action
Now that the teaser has been shared, ask for something back;
Request for some of the following: seek investment opportunity, collaborators, new hire, test-bedding opportunities, new customer, and referral
And here are some additional notes:
1. Keep it brief like a movie thriller
A fellow mentor once said, "It's a thriller, not the movie". On many occasions, a startup pitch is directed at an audience of widely varied interests (e.g. FinTech, MedTech, Infocomm, electronics, etc.) The wrong audience will hardly be moved no matter how compelling your story went. Yet, a keen audience has endless questions even a detailed presentation becomes insufficient. The better way is to take it offline, exchange name cards (know whom you're talking to), have a two-way conversation, and build a rapport.
2. TAM - Total addressable market should be meaningful
Participating in a growing market imply that participating firms are likely to grow as the 'pie' expands. But if you find yourself justifying that the market is growing, you're probably pitching to the wrong audience; like-minded investors know the market.
Absolute market size isn't that interesting; avoid putting too much emphasis on it. They are often estimations based on far too many assumptions, often by aggregating total sales by direct competition that you have to compete against. Estimating value capture based on estimated market size, compounding with the assumption that the economy does not enter into a recession, further assuming that your product will launch on time and within budget, is hardly meaningful and says little of the likely outcome.
Stating an arbitrary "1% target market share", even for a very large market, often suggests a lack of planning. For instance, in some industry, 100 cold calls, leads to 10 introduction meetings, and perhaps 1 or 2 is continued with a series of negotiations and meetings resulting in 1 successful deal. Arriving at a $100M sales target requires a series of successful contract wins, supported by a sizeable sales team. Client acquisition cost is often underestimated.
In another instance, 1% market capture pales if the relevant industry is growing at a 5% compound annual growth rate (CAGR). Also, the venture becomes unattractive if the target market share is far too small compared to the competition; emphasises your competitive advantage and the ability to win the market over.
A bottom-up TAM approach as described by Jude O'Kelly, Community writer at TechInAsia seems more meaningful. See "A 4-minute guide to defining your market size". The bottom-up TAM approach starts with the immediate address market by existing sales team (factoring pace of new customer acquisition, the region of operation, rate of conversion, etc.) Further factoring rate of growth of the team, required resources to scale-up, and the anticipated investment value-added. This gives a better indication of the result that investors can expect per dollar invested.
3. Have your enterprise banner on every page
The audience takes pictures especially when the content resonates with them. It quickly vaporises opportunities when the image does not say who or how to get back to the presenter.
Have fun storytelling!