Investor pitch decks are a lot like first dates. On a first date, usually you have to do the big things right (look good, smell good) to get the second date. But sometimes, you can still get that second date even if you do the big things wrong. How? By doing enough of the little things (smiling, laughing) right.
It’s the same thing with investors. Your pitch deck might knock it out of the park with a single slide or cumulatively impress enough so that it gets a closer look.
This might shock you, but investors are regular people. I know, I know… you thought they were cyborgs driven by pure logic. Actually, no. Like you, they have strong feelings, preferences, and biases. That’s what you have to keep in mind while creating your investor pitch deck: it’s meant for people.
Take, for example, Shark Tank. Often a pitch that REPELS one Shark will make another one swoon. Crazy, right? I mean the Sharks are all mega-successful entrepreneurs. You’d think all of them would be able to tell the good ideas from the bad — at the same time. Not so.
And that’s the way it works in real life too. Every investor you pitch is measuring your deck against their mental checklist. Punch enough of their checklist and they’ll give you money. Although by no means easy, it really is that simple.
To make punching their checklist easier, I’ve compiled a list of the top 71 things investors like to see in a pitch deck, grouped by category. Here goes:
- Great Big Market. In a great market – a market with lots of real potential customers — the market pulls product out of the startups. Big markets make investors hot.
- Crowded market. A crowded market usually means there’s a lot of money to fight over. Investors love the smell of money.
- Dead market. Contrarian investors will always entertain a market that conventional wisdom says is dead. Be warned, though, all investors like to think of themselves as contrarian.
- Important market. “Important markets” are highly subjective. To persuade an investor of your market’s importance, he or she must first accept your premise, and then the future trend based on that premise.
- Changing market. Investors like changing markets, particularly when the rate of change is flying under the radar (e.g., the switch from desktops to mobile in 2008).
- Right time. Prove it’s the right time to invest. Show your audience that it’s not too early or too late to benefit tremendously from the problem your product solves.
- Go-to-market strategy. Demonstrate that you will be able to get your product into customers’ hands without overspending on distribution.
- Sound business model. Investors love to see thoughtful, tested business models in pitch decks. Of course, it helps if you’re already profitable, but if that’s not the case, a smart business model alone can secure funding.
- Marketing channel mastery. Your investor pitch deck has a better chance of success if you show that you’ve been able to lower customer acquisition costs (CAC).
- Rabid fan. Some investors can’t get enough of certain markets. They eat, sleep, and breathe it. Your job is to find the investors who feel that way about your market, and pitch them.
- Unlocks non-consumption. Many products, particularly software and apps, are used once and forgotten. Investors prefer products that become user habits. Find a way to make your product “sticky” and they’ll throw money at you.
- Breakthrough technology. Breakthrough is an overhyped word, but investors know it when they see it. Point blank: if your product does something revolutionary, some investors will want in.
- Changing technology. Show investors how your product is riding a particular change in technology (e.g., advertisement-free videos).
- Defensible IP. Investors want to protect their money from competitors, lawsuits, and patent trolls. If you make lawsuits a non-issue, they’ll feel more confident in your product.
- Scalability. Your product scales nicely without any drop in quality.
- Exclusive partnership(s). Sometimes two products go together like PB & J. Or 1 + 1 = 5. If you’ve built one of those exclusive relationships with another company, investors want to hear about it.
- Domain expertise. Investor ears always prick when the product pitch is related to their domain expertise. Although these investors have higher standards than non-experts, they also end up as stronger advocates.
- Existing MVP. Having a MVP to pass around makes your product more “real.” Investors like what they can touch and feel.
- Intuitive. Investors like products that flow and feel “right.” You’re good if your product makes them say, “Wow! Why didn’t I think of that?”
- Knowledge. Investors love entrepreneurs who can rattle off the specs of their product without blinking. Encyclopedic knowledge of the product is what separates real and fake entrepreneurs.
- The why. Namely, why the problem you’ve identified matters. That’s the single most important question your pitch deck has to answer. Yes, your “why” will have supporting reasons, but boil it down to one concrete sentence. Do that, and you’ve made the investment decision easier.
- Competition. Investors expect you to show them your perceived competitors, big or small. Don’t make the mistake of listing too many competitors, too few, or avoiding the elephant in the room.
- Brevity. Brevity is not only “the soul of wit,” according to Shakespeare, it’s a pheromone for investors. First, they appreciate entrepreneurs who respect their time. Second, they respect entrepreneurs who prioritize the main points. Keep elevator pitch in your mind as you design your deck.
- Problem comes first. Your first slide should focus on the problem you’ve established. Start your deck with a Bang! First impressions matter.
- Pitch the Problem. If the problem is BIG and BURNING enough, investors will overlook a flawed product. Which is good, because let’s face it… all products have flaws.
- Ruthless editing. That is, no filler content. Every slide in your deck should flow into the next one, with no friction. The goal is to establish a strong case for investing in your company.
- Clarity. Every detail in your deck should be objectively clear and unambiguous. In fact, it should read well without you there to present it. AIDA (Attention, Interest, Desire, Action) is a copywriting formula that works well in pitch decks.
- CTA. The call-to-action at the end of your deck has to be LOUD and PROUD. Remember, you’re an entrepreneur, bitch!
- Customer research. Your deck demonstrates how customers think about the product you’ve identified, based on validated learning.
- Alternative options. You show other ways customers solve the problem you’ve identified. Investors always ask about alternative solutions. Poking holes in solutions saves them precious time.
- USP. Your product/solution should differ enough from your competitors so that investors get it the first time.
- Great analogy. A great analogy will make your whole deck easier to swallow. Investors prefer not having to think too hard.
- Sufficient. While it’s true that investors don’t spend a lot of time with most decks, your deck still has to include all the parts: problem, solution, team, metrics. The deck should be long enough to answer the most obvious questions.
- Natural. Your pitch deck should read like an outgrowth of what the company is already doing. It should NOT read like a book report for investors.
- Bad idea. The most successful startups in the last twenty years looked absurd on paper. If nobody’s exploring what you’re doing, it MIGHT prod investors into learning more.
- Bullets. Investors love well-crafted bullet points. The more, the merrier.
- Compelling copy. Words have meaning (duh!). Sharp, crisp writing can sell ideas better than almost anything else.
- Emotional story. Investors who buy into your story through vivid customer pain and testimonials are more likely to open their wallets.
- Good design. An uncluttered layout and intuitive design prevents distractions in an investor pitch deck. As Apple has proved, investors can’t resist beauty.
- Formatting. The deck is well-suited for the location in which it will be analyzed (email, one-to-one meeting, live presentation).
- Questions assumptions. Investor pitch decks NEED to contain a certain level of unpredictability, surprise, and contrast. Without these elements, investors are quick to tune out, thinking they’ve seen/heard it before.
- Summary slide rocks. Like an elevator pitch, a good summation slide will penetrate an investor’s natural defense. It will also stay with him or her longer, improving your chances for funding.
- Metrics that matter. Investors judge pitches on metrics and KPIs. Usually there are only a few that matter; include them.
- Good use of funds. A good deck will outline specifically where the money raised will go.
- Road map. Although there are no “definites” with a startup, investors expect to see advanced planning. Include in your pitch deck a one-, three-, or five-year road map.
- Command. Investors like to see presenters who can sell their company with or without a deck in front of them. If your energy is high and properly dramatic, good things can happen.
- Qualifications. Investors are wondering why you’re the person to solve this particular problem. Show them your unique credentials (passion, experience) and you remove some risk.
- Determination. Investors like resourceful founders and team members. Show them (pitch deck or conversation) how you’ve overcome obstacles that would’ve taken lesser beings out of the game.
- Paranoid. Investors love Andy Grove. If he really said only the paranoid survive, then by all means, show a little paranoia.
- Confidence. Although there’s speculation about how anti-social startup founders are (and whether that helps them succeed), there’s no doubt that presentation skills help raise money. Investors respond to confident pitch presentations (i.e., FOMA).
- Team ties. The team that’s worked together stays together. OK, maybe not, but shared history is a distinct advantage among teams.
- Industry junkie. Building a startup is an all-consuming job. Many founders don’t read anything beyond their immediate work, which can be dangerous. If you demonstrate to investors that you stay current with industry news, they’ll feel more confident about the company’s adaptation.
- Megalomania. Investors like founders who want to do it all; build a massive company and then stick around to run it. (i.e., Yahoo’s offer to buy Facebook).
- Thrift. Investors love bootstrappers–those that do the most with the least. Show investors that the money they give you will fuel growth and not luxury living.
- Great technology team. For many investors, the technology team is most important. Highlight your team’s awesomeness, and they’ll be calculating the days until you’re acquired.
- Great sales team. A hungry sales team makes money. Investors like money.
- Great marketing team. Was Apple or Beats by Dre built on marketing alone? Some people think so. Investors will gladly partner with you if you’ve got similarly talented marketing people.
- Credentials. Investors will be more open to founders and teams with prior startup experience, trophy work experience (e.g., Google, Microsoft), and Ph.D.’s.
- Strategy. Investors tend to have strong opinions on business strategy. If your strategy fits with theirs (alignment), you’ll grab their interest. If the strategy changes (happens a lot in start-ups), everyone needs to buy into that change, understand it, and (of course) be aware of it. If strategy is not clear, micro-management by the CEO (or a few core executives) is necessary.
- Already profitable. Most investors will take less in future profits from an already profitable company than greater future profits from a presently unprofitable company.
- Traction. Real traction, measured either in user growth rate or revenue growth, is irresistible to angel investors and venture capitalists.
- Unfair advantage. Unfair advantages can come in many forms. If you show investors the how and why of yours, they’ll want in.
- Product/market fit. This is a debatable term, but some investors are convinced they know it when they see it.
- Paying customers. Don’t be fooled by today’s unicorns who haven’t monetized jack. Investors respect any company with paying customers.
- Registered users. Depending on industry, this is an important metric that investors will use to evaluate you.
- Active users. A high number or percentage of active users bodes well for persuading investors to partner with you.
- Big lead. Eventually, even the best companies face commoditization, but if you’re months or years ahead of the competition, investors will perk up.
- No exit plan. Investors like to see founders who believe they’re building something so incredibly important that no amount of money would make them sell.
- Fits portfolio. Your pitch has a much better chance of success if it complements an investor’s existing portfolio.
- Fits thesis. Investors, whether angels or VCs, all have reasons for the types of investments they do. If your company happens to match theirs (do your homework), they might invest.
- You’re teachable. This is probably more important for angel investors, but still, nobody wants to invest in a know-it-all. Why? Cuz nobody know it all!
You still with me? Great. If you remember nothing else, remember this:
1) Your pitch deck is a current snapshot of your startup. It’s an opportunity for investors to join the ride and help steer the company to a profitable future. Your pitch deck has to sell the dream.
2) Investors are humans. If one investor or group can’t see what you’re doing, take your pitch deck elsewhere. You don’t need every investor on your team, only the right ones.