Introduction:
Crafting an impactful pitch deck for pre seed startup is instrumental in attracting investors and securing pivotal funding. As an integral part of a startup’s trajectory, a well-structured pitch deck effectively showcases your startup’s vision, resonates with your audience, and sets the stage for constructive dialogue with potential financiers. This comprehensive guide, bolstered by expert insights and pragmatic examples, is designed to guide you through the process of creating a compelling pitch deck that not only communicates but captivates.
The Blueprint of a Pitch Deck for Pre Seed Startups:
Although the Guy Kawasaki pitch deck structure is a common and popular format, several others have gained wide acceptance in the startup and investment communities. Here are some of the main ones:
- Sequoia Capital Pitch Deck Format: The Sequoia Capital Pitch Deck Template is popular and widely accepted in the startup community. It advocates for straightforwardness, focusing on key aspects like problem, solution, business model, market size, competition, team, and financials.
- Airbnb Pitch Deck Format: Airbnb’s original pitch deck is often used as a template for startup businesses. It focuses on clearly defined problem statements, solutions, market size, product, business model, market adoption, competition, financials, and the team. It’s praised for its simplicity and visual style.
- Uber Pitch Deck Format: Uber’s pitch deck is also used as a model by entrepreneurs. It highlights the service’s unique value proposition, expected market size, business model, strategy, growth, and financial projections.
- The Problem-Solution Pitch Deck: This structure starts by presenting a problem that is universally understood and then explaining the solution that the startup provides. It includes the team’s credentials and a call-to-action at the end.
- Storytelling Pitch Deck: This format uses a compelling narrative to engage the audience emotionally. It takes them on a journey of why the problem needs solving, how the founders discovered it, and their passion for the solution. The narrative incorporates other elements such as product demo, market validation, business model, and team introduction.
- Vision-Led Pitch Deck: This format is for startups that aim to change the world in a significant way. It starts with the company’s vision, followed by the problem it addresses, the solution it provides, and how it plans to reach its goal.
- Traction Pitch Deck: This is a good format for startups with a proven track record. It starts with highlighting the startup’s significant accomplishments before going into aspects like the problem, solution, market, product, team, and financials.
Depending on the stage of development of the company, type of investor and also type of transactions that you are working on, different formats can be implemented, however, in General, pitch deck should be concise, visual, and engaging, typically containing between 10 and 20 slides.
The following sections provide a breakdown of the essential elements of a pitch deck, specifically suitable for pre seed startups looking to raise fund.
The Opening Act – The Cover Slide:
The cover slide serves as the gateway to your venture. It should spotlight your startup’s name, logo, and a succinct tagline that encapsulates your venture’s essence. An evocative cover image, representative of your startup’s mission or operation, can lay the groundwork for a potent first impression and engrave your startup’s identity in the minds of your audience. An old great example of a compelling tagline in a pitch deck can be found on Youtube’s pitch deck.
The Introduction – Company Overview:
An effective pitch deck commences with a well-constructed company overview. This slide should include 3-8 key points that frame the narrative for the audience, providing a glimpse into what’s ahead. These points can range from the problem your startup aims to resolve, the composition and background of your management team, to any significant progress your company has made.
The information should be concise, exciting, and easily digestible. Avoid complex jargon and intricate details that might confuse the investors early in the presentation. The goal is to ignite curiosity, not overwhelm the audience.
Company Mission, Vision, or Purpose:
The mission, vision, or purpose of your company defines its ultimate objectives and differentiates you from competitors.
- A mission statement elaborates on the business’s current and future operations. For instance, a consulting firm’s mission might be, “We’re in the business of providing high-standard assistance on performance assessment for middle to senior managers in medium to large firms in the finance industry.”
- A vision statement describes the future state that the organization aspires to achieve. For example, Ericsson’s vision is to be “the prime driver in an all-communicating world.”
- The company’s purpose connects its functional role with its emotional appeal. An example would be insurance company IAG’s purpose: “To help people manage risk and recover from the hardship of unexpected loss.”
When expressing these facets, focus on the uniqueness of your idea. Drawing comparisons to established companies like “We are the Airbnb for cooks,” could detract from the novelty of your venture and may even trigger perceptual blindness among investors due to the overuse of such analogies.
The Guiding Light – Company Mission, Vision, or Purpose:
This segment of your pitch deck allows you to illuminate your overarching aspirations. Your mission, vision, or purpose should resonate with originality, clarity, and preclude direct comparisons with competitors. Foster an emotional connection with your audience by elucidating your unwavering commitment and passion for your cause.
The Driving Force – The Team:
The team forms the backbone of your startup, and its capabilities significantly influence investor decisions. Highlight the diverse skill sets and relevant experience within the team, demonstrating their ability to execute your vision.
A Finance Expert Samir Chaibi advises, “I would happily back a founding team of a fashion marketplace that can show me they know that industry very well, that they have worked with global fashion retailers and brands, and the skills of the team as a whole represent the right mix to take on the industry incumbents.” Include a brief snapshot of each team member’s profile, highlighting their education, past employment, and relevant expertise.
While there’s debate around when to introduce the team in your deck, Venture capitalist Grant Blevins suggests placing it early in the presentation: “Bias investors from the beginning with your credentials.”
The Milestones – Current Traction or Progress:
The team forms the backbone of your startup, and its capabilities significantly influence investor decisions. Highlight the diverse skill sets and relevant experience within the team, demonstrating their ability to execute your vision.
A finance Expert Samir Chaibi advises, “I would happily back a founding team of a fashion marketplace that can show me they know that industry very well, that they have worked with global fashion retailers and brands, and the skills of the team as a whole represent the right mix to take on the industry incumbents.” Include a brief snapshot of each team member’s profile, highlighting their education, past employment, and relevant expertise.
While there’s debate around when to introduce the team in your deck, Venture capitalist Grant Blevins suggests placing it early in the presentation: “Bias investors from the beginning with your credentials.”
Having big names as advisors, founder, investor, can be a positive point in your startup fundraising process.
The Potential – Total Addressable Market (TAM):
Illustrating to investors that your venture taps into a substantial and expanding market is paramount. Your TAM should be authentic, grounded in a “bottoms-up” approach, and fortified with corroborating data from reliable sources.
The Genesis – The Pain Point:
The pain point your startup resolves should be articulated with precision and compelling presentation. If the audience identifies with the problem, they will be more predisposed to consider your solution.
The Resolution – Your Product or Service:
In response to the problem delineated previously, propose your unique solution. Clarify what your product or service entails, how it addresses the problem, and what sets it apart from existing alternatives. Supplement your explanation with images, screenshots, or product mockups for enhanced comprehension. Discuss key features, product milestones, and your product development trajectory.
The Profit Mechanism – Business or Revenue Model:
This slide should delve into how your startup anticipates generating revenue. Examine your revenue model, pricing paradigm, average account size, and your sales and distribution strategy. Incorporate both your current revenue framework and future projections, demonstrating your preparedness for shifts in the business landscape.
The Growth Map – Marketing & Growth Strategy:
Provide a detailed account of your strategy for scaling your product and broadening your customer base. This may include information on marketing channels, hiring schemes, or growth forecasts. Tangible evidence of a well-thought-out growth strategy can reassure investors of your business’s potential for expansion.
The Numbers – Financials::
While granular financial reports are generally shared separately, your pitch deck should offer an overview of your financial standing. Illustrate key financial projections for the ensuing 3-5 years and incorporate your future burn rate. Utilize graphs and charts to simplify the interpretation of complex financial data.
Pitch deck for a beauty brand (Source: World Business Council)
The Proposition – The Ask:
The penultimate substantive slide of your pitch deck should unambiguously state your request from investors. Specify the quantum of funding you’re seeking, its allocation, and the anticipated outcome.
The Connection – Contact Information:
Conclude your pitch deck with a slide dedicated to your contact details, facilitating easy correspondence for interested parties. Include your company’s logo, website, social media links, and your email.
Epilogue:
As we conclude this exploration of creating an effective pitch deck for pre-seed startups, it’s essential to take a step back and consider the broader perspective of startup fundraising.
In a landscape where securing capital is often portrayed as a barometer of success, it’s important to stay grounded. As Chris Dixon of Andreessen Horowitz says, “The best thing is to either never need to raise money or to raise money after you have a product, users, or customers.” Equity is the most expensive form of capital, so be sure to carefully assess your startup’s needs. Fundraising should not be pursued just because it appears to be the prescribed path for technology startups, but rather because it aligns with your strategic requirements.
If you do decide to fundraise, be clear about how much you need and exactly what it will be used for. It’s not simply about attracting investors, but ensuring you have a sustainable plan for using those resources. Fred Wilson, a legendary investor, offers valuable insights in his blog posts: What Seed Finance Is For and How Much Money to Raise.
Mastering the art of fundraising can often spell the difference between survival and stagnation for your startup. This process, steeped in the art of persuasion, requires not just a compelling narrative but also the ability to resonate with investors on a deeper level. While the internet is teeming with advice, sifting through it to find quality guidance can be a daunting task.
