The Biggest Challenge When Putting Together An Early-Stage Pitch Deck

The Biggest Challenge When Putting Together An Early-Stage Pitch Deck

After working with a considerable number of founders, we got to see quite a few early-stage pitch decks and noticed a recurring issue that can be broken down into many small mistakes or omissions. Some of these small issues can be addressed with good design, while others require a more diligent approach to the business aspects of the content presented. But they all come together under a single creed: the right information in the right structure.

Founders are oftentimes so involved in the deck that they can’t rise above the information in their heads to create an adequate structure for the type of pitch deck they need. In early-stage startups, emotions run high, every decision is critical, the pressure is sometimes too much and it’s easy to miss a key slide or to want to include a vital number for which you actually don’t have any backup.

Today we’re going to break down the challenge of having the right information in the right structure into a couple of key traps that founders usually fall into.

Let’s dive in!

 

1. Missing a key slide

Depending on who you’re talking to, a key slide could be any slide. At VisualHackers we believe that not all slides are created equal. In our view, the four most important slides in most pitch decks are the Problem, Team, Technology and Traction slides. While you have to give importance to all of your deck’s slides, extra emphasis should be put on certain key slides, usually these four. These slides help to reduce the risk your startup has in front of investors (the risk to execute - addressed by the team slide, the risk that there is no market - problem and traction slides, and the risk of not having a good product - technology slide).

The first one is a clear problem statement slide. This addresses the core of your company, the WHY of it, as it were. It tells investors and VCs that you have correctly identified a real problem, affecting a specific target market and that you are the right person/team to solve it.

In the words of Jay Acunzo, former VP of NextView Ventures, the WHY is about two things:

  1. Explaining the market opportunity. Why will your customers care about your company? Is this a really big problem right now? Is it only growing as a problem/opportunity? Are there other solutions that exit but fall flat, thus putting you in a position to win?
  2. Validating you as the founder. Why are YOU out to solve this problem? Why do you care? Are you authentic as a founder who’s hell-bent on solving this issue? Will you run through inevitable future brick walls because you care so much, or did you just spot a weakness in a market and may not be overly passionate? In short, what’s your unfair advantage to gain traction and distribution and start to solve this particular problem?

 

The second key slide, though not applicable to all businesses, is considered to be the traction slide. It’s important to note here that we’re talking about an early-stage investment, not a pre-seed one, where a product might not exist yet so traction would not be an issue at that point. Capital from a seed round often fuels a startup’s move beyond its founding team, funds product development, and in some cases, even facilitates early revenue generation, as opposed to a pre-seed round where we see a founding team (often pre-product) receive a small investment to hit one or more of the milestones they’ll need to ready themselves for “true” seed investment.

Traction validates your product in the eyes of investors. The reason traction is so important to investors, is because it typically demonstrates progress from an idea to something that has the potential of becoming a profit-making business. Traction is progress or momentum, lessening the risk for investors. Use this slide to show you have sales, customers or users. If that’s not the case, show strategic partnerships, a strong Advisory Board or letters of intent from potential customers.

Take your time creating the Team slide - especially in an early stage startup. At this point in your evolution as a business, investors are betting more on the team than on the product. Squeeze the relevant info from this: team background, relevant experience, chemistry.

As for the Technology slide, make sure you know your audience. You want to incorporate the key information regarding your technology but also present it in a way that will make the most sense for your audience.

 

2. Presenting bad numbers

Showing numbers just to show numbers is one of the worst ideas when creating a pitch deck. You do need numbers, but, more importantly, you need the right numbers. It is the case for many founders to add superficial or insufficient information, or worse, guesstimates.

Don’t add unrealistic growth projections that do not match the rest of the industry. Don’t confuse Market Size with Total Addressable Market or use them interchangeably. If you present a TAM that is unreasonable for the industry, it shows a lack of understanding of the industry. Don’t just put numbers from Nilsen, McKinsey or other market research big names. Take the time to determine your exact TAM, using both a top-down approach as well as a bottom-up one, to find the sweet spot for your product.

Fake precision makes you look unprofessional, unprepared and untrustworthy. If the financials do not corroborate the rest of your deck, it can mean that you don’t have a good product or that you’re not the person to take it to market. Similarly, if you present ambiguous stats knowingly, investors will know you’re trying to hide something and they will probably ask questions about it.

3. Not having a story

From a practical standpoint, stories are the most effective way of organizing information in any presentation. Humans are hardwired for storytelling. Our brains have an embedded need for narrative, whether it’s schemas, scripts, cognitive maps, mental models or metaphors. In many ways, stories are how we think and make sense of the world around us, and this extends to business concepts as well. Create a story thread that links the essential concepts required in a pitch deck and you’ll have the right structure.

We talked about different techniques to tell stories in your presentation in the Power of Storytelling. One such effective technique is to create contrast, in a ‘what is’ vs ‘what could be’ scenario. For example, when describing the problem that you’re trying to solve with your product/service, it’s easier for investors to connect to it and relate if you explain the two scenarios: how your target market conducts life and business without a solution, and how their lives and businesses would be significantly improved if they had your product/service.

 

4. Having too much information on a slide

It’s usually type-A people who try to cram too much information onto every slide. I understand your struggle. But this is going to hurt your pitch more than you think.

Good pitch decks are clear, concise, and contain only the most critical information, not all information. Resist the urge. Don’t crowd your slides. Instead, opt for no more than 2-3 sentences per slide. Think of them more like statements than sentences. Treat your slides like billboards, not letters.

If you’re using lists, 6 bullets/points per slide should cover it. Make sure to leave enough space between lines of text. Limit the number of slides. A good case practice is using 20-30 slides or one slide per minute.

 

5. Using too many slides to present one deck element

A deck is an introduction to your startup, it’s not an in-depth presentation. Similar to the urge of cramming too much onto one slide, over-explaining a concept over the course of too many slides is counter-productive.

Clarity and focus are the keepers of good pitch decks. They manifest through well-explained ideas, good design, and an easy-to-follow structure. If you know you’re eligible for this particular mistake, create a 1.0 version of your deck and then re-work it into a more nimble, more clear 2.0 version. If you’re an early-stage startup looking for a seed or series A funding, you only need 10-15 slides in your deck.

 

One thing you should keep in mind is that the best pitch decks don't feel like they were created for the benefit of investors or venture capitalists. They feel like an outgrowth of the work you’re already doing. Don’t use your deck to ask permission to start your business, use it to show how you’re going to create a successful company.

If a pitch deck can stand alone, you're on your way to secure those funds you need. So start writing, make it clear, design it for your audience and get feedback from as many people as you can.


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