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How to craft a pitch deck 📈
When you start looking for funding, often the first port of call for many investors is a pitch deck. A good pitch deck can make the difference between getting that first meeting with an investor or being met with radio silence.
Kevin Hale, a Y Combinator partner, suggests a three-point approach to pack the most punch into a pitch deck
1️⃣ Make it Legible
Now this seems obvious but a lot of startups get it wrong, as with any presentation, you need to keep it legible, that means: high contrast between text and background, large clear font, and bold text.
2️⃣ Make it simple
It is so easy for startups to get bogged down in the details, but your deck should condense the pitch into 5-7 key ideas. Keep them on separate slides and don’t try to introduce too much information at once, your audience may get confused
3️⃣ Make it obvious
Investors will lose focus, especially on a demo day, so you better make sure your pitch is clear as glass. Write exactly what you want them to in as few words as possible, annotate graphs, and don't use complicated graphics or screenshots!
Here's a great sample deck to make your own
What not to put in a pitch deck 🚩
Now that we've covered how to create a compelling pitch deck, it's important to also consider potential pitfalls to avoid. Michael Houck identified several red flags to steer clear of when crafting your deck
🚩 Detailed financial projections
Investors are well aware that financial projections often don’t reflect reality, so don't spend valuable time covering them. Focusing on projections might suggest to investors that you don't understand this.
🚩 Not mentioning competition
It may be counterintuitive, but recently funded competition is actually a very good sign to VCs, it indicates a promising market, so make a point to mention competitors
🚩 Spending too much time on it
Don't overcook your deck. Making it look good is great, but don’t waste hours tweaking the design, it’s the content, and the pitch that matters.
🚩 Not sending it to investors in advance of the meeting
Time is limited and investors are busy. If you send your deck to the investors ahead of time, it gives them more time to understand your pitch, and gives you more time to sell the idea.
How to talk to investors 🗣
Chris Dixon has some great advice for early stage founders on this topic: “Pitch yourself, don't pitch your idea”
This is elaborated on in his article, but the core of his article is that in an early stage startup, your ideas are prone to change, and ideas are not generally the key factor of startup success .
Builders with a good track record who are likely to succeed are in far shorter supply.
The question you are trying to answer is (often) not “is your idea good” the question is, “can you figure it out”.
In Paul Grahams article “how to convince investors” he has some universal advice for all startups, not just early stage ones.
He starts by giving an explanation of the mindset of a startup investor, which is important to understand in order to tailor your pitch. Angel investors and VCs are looking to invest in companies that have a chance (even if it's very small) of being wildly successful. This means that even if you have a high chance of being moderately successful, you may struggle to find investors.
He goes on to say that in order to convince investors you need three key things:
1️⃣ Formidable founders
In this context a formidable founder is one who the investors believe will get what they want, regardless of any obstacles put in front of them. The most important ingredient in this is confidence in your idea. If you believe your idea is a good investment, it is a hell of a lot easier to convince investors. If you don’t fully believe that, then you should find a new idea.
2️⃣ A promising market
In order to be a good bet for investors, you need to have a credible path to having a big share of a big market. In order to achieve this, you either need to be in a small market that is growing, or start operating in a small market and branch out into a bigger one.
3️⃣ Evidence of success so far
This can come in many different forms, but the better you can demonstrate progress towards product market fit, the easier it will be to get investment
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What do you want to explore next?