Most entrepreneurs really struggle to bring in investment without the proper tools to bolster their proposition. An engaging pitch deck is a key part of any successful fundraising strategy, so it’s vital to get it right.
With no clear consensus on what a great pitch deck for raising funds looks like, we asked funding expert, John Auckland to share the insight he has gleaned from a series of successful fundraisings.
I see a lot of common mistakes that put investors off, yet are somehow still rife in the industry. This article details what I’ve learned during the process of successfully funding more than 50 companies, plus some useful research from DocSend, to outline the best recipe for an alluring, and ultimately successful funding pitch deck.
Don’t limit yourself to one deck
There’s no one size fits all for investors, who, depending on their interest in and knowledge of your offering, need different levels of briefing. This is why you’ll need at least three different decks before you begin to engage investors. The top three are:
1. The Executive Summary
Aconcise taster document that summarises your proposal and allows investors to gauge whether they want to spend some time delving into your proposal.
2. The Presentation Deck
An image-only version of your deck designed to accompany a presentation given in-person or via a video link.
Can you remember a single word-heavy TED Talk? Nope. This is because they prohibit the inclusion of words in a presentation, unless they’re essential to make a point. The simple reason is that words on a screen detract from what you are actually saying.
3. The Investor Deck
This is a more comprehensive deck that you’ll leave with already interested investors to mull over. You won’t send it out to the masses or use it to accompany a presentation (as it contains text).
This is the doc that many create when they try to compress everything into a single page. However, without context, investors will be unlikely to the spot the allure of an opportunity.
This flow diagram shows when and where you should use these documents, which, if you follow, will significantly boost the level of engagement you’ll receive.
The old guard of investors reckon that this approach slows the process, but only if you leave out the key information from your Exec Summary or muddle your pitch.
Keep your deck in the right order
Just like preparing slides for a presentation, it’s important to get the order right. Check out the DocSend / Harvard Business School study that studies the effectiveness of 200 startups that completed their Seed or Series A rounds and discovered the most effective order of slides in the process:
1. The Purpose
What you do and why investors should care.
2. The Problem
The issue you’re solving and the market opportunity you’re meeting (avoid the use of negative language).
3. The Solution
Why your idea is best placed to solve this problem
4. Why Now?
Why is your idea urgent? Is there a new market emerging? Has it been made possible by new tech? Is it an evolution or a revolution? Failure is often down to bad ideas, a market who weren’t ready for them, or a completely new idea. If your idea has never been thought of before, you’ll need to explain why!
Your market size, trends and possible penetration.
Research your competitors well, because if your investor finds a competitor you haven’t named, they’ll be quick to pass on the opportunity. Competitors can actually help you by educating the market about new solutions to an existing problem.
A proper analysis of your product and your sales so far. You’ll need to provide plenty of evidence, figures and proof of support.
8. Business Model
How you’re making your money, how you’ll bring in revenue in the future, how you market your product/services and how the costs slot into the your wider model.
Who you’ve brought along on your journey, their expertise and why they are a huge asset to your business. Leave any members out that don’t add value, and include advisors or non-exec directors to fill any skills shortages in your team.
A brief summary of your financials and when the investor should expect to make a return.
Learn the art of storytelling
While rational advice is important, the ultimate decision of investors is based on emotion. People respond to stories and narratives that bring out empathy and emotions as the investor tries to relate to your experience.
Stories have highs and lows as well as lighthearted anecdotes that bring the human element home. This is the best way to help an investor develop an opinion about you and your proposition.
Your pitch should be about them, not about you
Pitch documents are a form of marketing tools, so communicating an idea from your perspective rather than the investor’s is a big mistake.
Copywriters spend years honing their skills and still often miss the mark, so it’s a far from simple process. However, there are some guidelines that will help you put some empathy into your writing:
- Picture your ideal investor and write your documents around them. Try speaking to them directly, writing in the first person.
- Read your finished work out loud. Do you sound like a robot? If so, the reader will be left unengaged. If it sounds more like a conversation then you’ll be far more likely to draw the reader in.
- While reviewing each paragraph, ask why should an investor care about what you’re telling them. If you don’t have an answer, shorten the sentence or delete it altogether.
- Use fewer words to make your point and trim the fat without losing the impact. Concise copy is easier to digest and makes it far more likely that the reader will actually make it to the end.
Personalise your deck
Research each investor you’re meeting and personalise your deck accordingly. If you don’t know much about them, check out their website or LinkedIn page.
Do they invest on gut feeling? Then open with your story and team. If they appear more analytical, or are rumoured to use a scoring system for rating investment opportunities, then emphasise the numbers, stats and evidence. Lastly, the simple act of sticking their name on the front cover can be surprisingly impactful.
If you follow these steps, as the more than 50 companies we’ve helped successfully fund their campaigns did, then your chances of winning over an investor will improve massively.
About the author
This guide has been written exclusively for ByteStart by John Auckland, a crowdfunding specialist and founder of TribeFirst. Tribefirst is the world’s first dedicated marketing communications agency to support equity crowdfunding campaigns, and has helped raise in excess of £14.5m for over 50 companies. John is a regular contributor to ByteStart, and you can benefit from more of his expertise and insight into crowdfunding in;
- How to get investors to back your crowdfunding campaign
- 7 Fundraising Mistakes that will stop investors from investing in your company
- How to prepare your business for crowdfunding
- Equity v Rewards Crowdfunding: Which is best for me?
- How the new EIS Guidelines impact crowdfunding
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