10 Most Important Components of Pitch Deck or Investor Deck

One of the most challenging aspects of being an startup founder is creating an effective pitch deck. The purpose of your initial presentation is to persuade potential investors to offer you a follow-up meeting, even though your ultimate goal is to raise money. Building that relationship requires carefully planning and organizing the elements of your pitch deck so they tell a compelling tale.

In 2021, the venture capital sector experienced unparalleled growth as it invested record sums in startups and welcomed record numbers of new investors. But that does not imply that raising money for startups has become simpler. The contrary was frequently true, making it more difficult for many startups to stand out due to market excitement and capital competition. Startups need to improve their fundraising strategies more than ever.

• Problem Statement: Personalize the issue as you introduce the topic to make your audience feel stress.  
• Solution: Express a glimmer of hope by pledging to fix the issue.
• Product Features: Highlight the key elements that enable the solution to be used, increasing the trust of potential investors in your product.
• Market: Introduce your scenario and characters in the market. Show potential investors who will profit. Start forming an image of your customers in the eyes of your investors.
• Competitive Landscape and Potential Risks: Reveal the impending dangers and chances to heighten the tension once more.
• Revenue and Operating Model: By presenting a convincing plan for success, reassure your investors about your revenue and operating model.
• Traction: Share your track record of achievement to inspire potential investors' faith in your ability to carry through.
• Projection: Build excitement by making predictions about where you'll be in five years.
• Team: Tell us about your partners. Make your company more relatable to investors. Explain how the members of your lineup are capable of carrying out your promises.
• Fundraise: To raise money, explain to potential investors how they would help this idea come to life and build urgency by highlighting why you need them right away.

1. The Problem

Any compelling story must have tension to keep the reader's attention and create an emotional reaction. That tension is introduced by the problem statement.

The problem statement, which is a description of the problem your product or service will attempt to solve, must be precise, individualized, and concentrated on the main source of problem (though you can discuss other pain points in your presentation). Show your investors about the repercussions of not finding a solution, which will increase their sense of urgency and empathy for your customers.

2. The Solution

Don't hold out on the solution; give investors the answer right away. This slide must specifically address the problems presented in the first slide in order to keep your story concise and clear. Otherwise, you're just creating an issue out of nothing.

Many startup founders find it challenging to come up with a solution because they are frequently too attached to their product or service to take a step back and define it in a straightforward & objective manner. Resist the impulse to go into great detail about your goods. Instead, concentrate on what gets consumers most pumped up.

3. Product Features

Since this is the key that will open the solution you just offered, demonstrating the features of the product is the pitch's main focus. Here, you want to concentrate on what makes your product unique and how it solves the main issue you identified. Imagine it as a real estate listing that focuses on a home's most unique qualities.

Investors are also interested in learning how challenging it will be for rivals to duplicate your offering. This is your "competitive moat," the long-term competitive advantage you have. Be sure to emphasize this. Nevertheless, use restraint and stay away from overly technical and jargon-filled explanations of how the product functions. Be upbeat but realistic because overconfidence might backfire and cause investors to become wary.

4. Market

It's time to describe who this product will benefit now that you've established the setting for your tale and captured the attention of your audience. Investors want to know if there is a large market for the issue you plan to address, as this indicates a promising future for revenue development.

You'll define the market size on this slide. In order for investors to comprehend your strategy, you should be able to articulate your consumer categories. While business-to-consumer (B2C) startups concentrate on individual characteristics like age, life stage, or household income, business-to-business (B2B) companies often segment based on employee headcounts, technology used, or geography.

5. Competitive Landscape and Potential Risks

The next step is to increase investor trust in your capacity to fulfil your commitments. Raising the tension once more is a good approach to accomplish this—of course, so you can release it later.

Knowing your competitors is just as crucial as understanding your product and target market. A thorough competitive study demonstrates that you are aware of your position in the market and your strategy for outwitting rival companies.

The Gartner Magic Quadrant is the most well-known graphic representation of competitive analysis, especially for tech companies. It divides competitors into four categories on a grid: leaders, visionaries, challengers, and niche players. It's not the only choice, though. The creators of OfficeFlex have decided to show their rivals on two axes that best reflect what their customers value.

6. Revenue and Operating Model

It's time to show how you're going to carry out your plan of action now that you've shown that you comprehend the terrain ahead. Your revenue and operating models should give a thorough overview of your business plan and address the tension that was raised in the preceding section.

Due to the fact that venture capitalists' primary concern is revenue, this may be the most crucial section of your presentation deck. However, it can also be the most dangerous aspect since, for early-stage and pre-revenue startups, market research might be the only method to identify the ideal business model—and reality might turn out completely otherwise. Fortunately, experienced VCs are aware of this.

In addition to your price points, you should be prepared to offer projections for gross revenue, margin, and profits. You should also be prepared to discuss how you arrived at your price points. Even if you're currently optimizing them, you should give specifics about your unit economics and marketing strategy.

7. Traction

A track record of accomplishment may be the best method to convince investors to believe in you. Use this part to highlight your accomplishments and future goals in areas like:

• Revenue
• Customers, including deals inked or monthly active user stats
• Team, including consultants and advisors hired
• Operating capacity, including sales offices opened or retail space secured
• Another approach is to show the product milestones reached, which can segue into a roadmap outlining plans for additional features and enhancements.

8. Projections

This is your chance to persuade potential investors that this project will be worthwhile.

Many entrepreneurs are shocked to discover that investors are much more concerned with the credibility of the business assumptions than with actual revenue and profit estimates. That's because business assumptions are generally accepted conjectures and are simple to comprehend, whereas predictions frequently have very little facts to support them.

The purpose of creating a thorough prediction is to express these assumptions in detail and stress-test them to determine how they affect performance. Explain why you believe the inputs chosen are credible. This reasoning will show that you are aware of the distinction between guessing and estimating and that you know what is required to establish a successful firm.

9. Team

Every business connection is built on relationships between people, and investors want to feel confident that the team working on your project has the knowledge and expertise to see it through to completion. Because of this, raising funding is substantially simpler for successful founders. If you haven't previously had a successful exit, think about include the following in your deck:

• Time commitment of the founders
• Years of industry experience of the core team
• Business and managerial background of the core team
• Technical skills of the core team

This is your last opportunity to build investors’ confidence in you and your product before you arrive at the funding ask.

10. Fundraise

You now describe the part an investor will play in developing your product. You must at least specify how much money you require, what you need it for specifically, and how the investment will affect the company's value. Make sure to explain how the money was used in relation to the targeted milestones you have set, such as your break-even point, any significant growth, or the creation of your product.

If you wish, you may also detail the valuation guidance and/or equity that you’re offering. Investment advisors can add a great deal of value here for founders who haven’t been through a pitch before.

The Afterword

There isn't an one pitch deck design that works for all startups, but there are key narrative beats that can help you convey the heart of your business's particular story and persuade investors to support you in seeing it through.

Ironically, pitch decks become so monotonous that most venture capitalists despise them. Keep in mind that an increasing number of these presentations are being delivered to your audience, so don't be afraid to add some flair and imagination to make yours stand out. At the same time, make sure you have all the information and understanding necessary to respond to the inquiries your presentation may raise.

Investment decisions involving venture capital are some of the most irrational since they are based as much on intuition and gut instinct as on financial analysis. Unlike bond allocations, portfolio weightings, or hedges, each financing decision expresses a conviction that a specific business and a specific team have the drive and resources necessary to grow quickly, overcome obstacles, and deliver exceptional value to its backers. It takes a fantastic narrative and a compelling method to convey it to convince someone of this.

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