Pitch Decks
Company presentations should be able to stand on their own
Happy Thursday,
Several months ago we talked about building a presentation slide deck and at the time indicated we would do a follow-up conversation regarding the company pitch deck. The pitch deck tends to be the first presentation companies send to investors, making it an important component of the capital raise process.
Purpose
When companies approach us about an investment, one of the first items requested is a copy of the company pitch deck. Reading the presentation allows us to be more respectful of a company’s time as we gain an understanding of the strategy and develop questions to make the initial discussion more efficient.
Let’s Look At The Numbers
DocSend, a subsidiary of Dropbox, is a service used for sending pitch decks to investors as it provides metrics regarding who views a presentation and for how long. It can be a great tool to track initial interest in the company.
Two points from DocSend’s data on venture capital pitch books:
20 slides is the average length of a presentation
3:20 or three minutes twenty seconds is the average time investors spend reviewing a presentation. It’s the equivalent of about 10 seconds per slide
Building The Structure
Companies often try and get creative with pitch decks, but we suggest following a simple formula allowing the presentation stand on its own and providing investors a clear understanding of the company and its strategy. The following eight points help outline the general presentation structure.
1️⃣ Problem
Describe what problem the company is attempting to solve. Some companies include a brief background or short narrative about how the problem was discovered as this helps set the stage for the presentation.
2️⃣ Solution
How the problem will be solved and what is unique about the solution that others have not attempted or discovered. Include a discussion of Intellectual Property (IP) such as patents or trademarks for legal protection of the solution.
3️⃣ Market Overview and Why Now
Overview of the marketplace including a description of the target customer. Discuss why now is the ideal time for the company to launch its product. Was there a new technology shift or industry change making the product viable now instead of a few years ago?
4️⃣ Customers and Market Traction
Review the company’s strategy to attract customers. Discuss existing sales and trends, marketing approach, customer retention, or other trends common to the industry.
5️⃣ Business Model
Overview of how the company plans to evolve over time and expectations for achievement of major milestones. Sometimes the business model is as simple as developing a single product or more complex if the company plans to expand geographically or into other industries.
6️⃣ Financials
Most early stage investors realize financial projections are about as accurate as a long term weather forecast, but presenting a high level financial forecast is helpful for tying together the previous slides. We recommend including at least the following:
Burn rate and current cash forecast based on our cash discussion from a few weeks ago.
Sales or revenue trends.
Customer acquisition costs (CAC) based on our CAC discussion.
7️⃣ Team
Often it is better to keep team backgrounds short but include a narrative about why each person is key to the business.
8️⃣ Deal Structure
Basic outline of deal terms and structure such as a convertible note, SAFE, equity or other instrument. Be very careful about the deal valuation as investors are increasingly questioning companies on the metrics behind the valuation so be ready to justify the number.
Presentation Feedback
The goal of the presentation or pitch book is to remain broad enough for investors to quickly understand the problem, solution, and what makes the company unique. To avoid the presentation becoming overly technical, give a copy to friends or family outside of the industry and ask if they can describe what the company does and why it is unique.
Remember investors will spend an average of 3 minutes and 20 seconds reviewing your presentation without you available to answer questions. Developing a strong pitch deck takes time but it becomes one of the key tools for differentiating the company from hundreds of others competing for the same investors.
Updates
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Wishing everyone a great Labor Day (for those in the US) weekend.
👋The Caymont Team