Preparing to meet with investors can be overwhelming. But assembling a comprehensive business presentation helps you put your best foot forward. That’s exactly what Todd Lowery and William Ellison taught attendees how to do at a recent Tech Park Academy.
Your pitch deck is a visual representation of what your startup does and where you’re headed. It should show investors that you’ve thought about more than developing a killer product or service: you’ve put all the right pieces in place to build a success.
Want to build a pitch deck that will have investors fighting to get in on the ground floor? Make sure you address these three critical questions.
Does Your Idea Solve a Problem?
The market is flooded with products and services. You have to differentiate your startup’s offering. Clearly identify the problem that your product or service solves. “Your pitch should include the value proposition you bring to the table,” says Lowery, director of investment readiness and finance at NexusLA, LLC.
The people who experience the problem you’re solving make up your market, which shouldn’t be too big or too small. “If you’re trying to take over the world with $300,000, we aren’t giving it to you,” says Ellison, CEO of Innovation Catalyst, a nonprofit venture development organization. “We want to see laser-focus.”
A beachhead market is your “in” into the larger market. If you have a plan for solving your identified problem at a small scale, then investors can picture a realistic trajectory for your growth.
What Story do Your Financial Statements Tell?
Your plan for market takeover has to be backed up by your financial statements and projections. Investors expect you to know your costs and be able to anticipate gains. “As your revenue and customer base increase, your pitch deck should show how your expenses track your revenue,” Ellison says. “Be prepared to defend your assumptions.”
For example, the cost to acquire a customer includes employing salespeople and taking out advertisements, Lowery says. This number should be compared to the lifetime value that customer brings to your business, which you can find by comparing your competitors’ trends. Your pitch deck has to prove that your startup makes significantly more from customers than it costs to get them in the door.
Who’s Got Your Back?
No matter how viable your plan is, it won’t matter if you can’t execute it. Investors aren’t investing in a business — they’re investing in its people. You should be able to prove that you have the right players in place to succeed. “We want to know what characteristics and experiences suggest your management team can execute your business plan,” Lowery says.
Having an advisory board can add to your credibility, too. “When I do my due diligence I’m going to call those people,” Ellison says. “We want to see that other people have bought into your vision.” Your pitch deck should show that several qualified people are excited to support your startup.
