Every entrepreneur looking for a small business investor has probably heard how important a pitch deck is. It offers the chance to capture a potential investor’s attention. Thousands of dollars (or more) can ride on your ability to sell your business or business concept quickly and concisely.
“A pitch deck is like an elevator pitch,” says Peter Fong Certified Mentor Entrepreneurship with Central Valley SCORE. “You have a short period of time to pitch an investor or banker to invest in you and your business idea with facts and examples.”
Creating the perfect pitch deck may feel like a monumental challenge, but the right tools will make it much easier. Here’s what you need to know about creating irresistible pitch decks.
What Your Investor Pitch Deck Should Include
Every company’s pitch deck looks a little different— standing out is important, after all— but you don’t want to deviate too far from the standard format. If you do, your pitch may quickly go into the “no” pile.
The majority of pitch decks offer the following information (not necessarily in this order):
- The problem your business is trying to solve
- Product/solution your business provides
- The market for your solution
- Your business model
- Top team members’ qualifications
- Traction/accomplishments to date
- Timing/why now?
- Fundraising goal
DocSend analyzes pitch deck data and found that in 2022, VCs spent 52% less time on the product sections and 42% less time on the business model section of pre-seed decks.
You want to be able to convey enough information so small business investors can quickly grasp the main points. But you definitely don’t also don’t want to overwhelm them.
DocSend shares this startling statistic: the average investor spent less than 3 minutes reviewing both successful and unsuccessful pitch decks.
Pitch decks are meant to be consumed quickly. While your pitch needs to be clear enough to generate interest, investors can ask questions if they want more information.
What Makes A Pitch Deck Different For A Small Business Investor vs Start Up
A pitch deck may look slightly different depending on the stage of your business. Fundraising usually falls into several stages:
Pre-seed Round: This is the earliest stage of raising money for a business. It’s often referred to as the “friends and family” round because your small business investors here are likely to be people you know, or ones to whom you have a warm introduction. Angel investors may invest at this stage if the offering is particularly strong. This money will be used to launch the business.
Seed Round: Seed funding is also early stage funding but it often takes place after the business has at least some traction. (There may be some blurring between pre-seed and seed rounds. The definition isn’t set in stone.)
Again, investors may be friends and family, or perhaps angel investors or crowdfunding. These funds are often used for R&D with an eye toward a Series A Round.
Series A Round: This type of fundraising will often focus on bringing in outside investors (such as venture capitalists) to provide enough funding to bring the business to life. Typically one investor leads the round, and helps to attract others.
There are other levels of fundraising beyond that but no doubt by that point your business has experience and a team to help with that fundraising.
As far as differences in pitch decks go, as the business develops it will be able to include more metrics around revenues, business model and traction. In a pre-seed round much of the information is projected, and the deck may focus more on the team and research into the product and market.
Here’s the good news. Even if you don’t raise money with your pitch deck, the work you do to prepare it may help in myriad ways, whether it’s creating a business plan that helps you land a small business loan from a bank, or launching a successful crowdfunding campaign. (More on that in a moment.)
Things To Avoid During Investor Pitch
If you actually get a pitch meeting with an investor, it will be both exciting and terrifying. You’ll want to avoid these common mistakes:
- Not practicing: “You have a short period of time to pitch an investor or banker to invest in you and your business idea with facts and examples,” warns Fong. “Practice is crucial. Practice with a group of friends or in front of a mirror until you know your stuff,” he advises. If possible, practice your pitch with other business owners, investors, small business mentors, or others in the space that will be able to ask tough questions and provide value feedback. (A SCORE mentor may help you prepare, and their services are free as a resource partner of the US Small Business Administration.) And don’t just read your slides: that’s way too boring!
- Focusing too narrowly: Whether you are overly focused on the positives of your solution, negatives of the competition, or your team’s experience, too narrow a focus can quickly ruin your pitch. You are there to present an overview of your company and show why they should invest in you and your company, which is often best done by having a balanced view.
- Having all the answers: You should definitely come prepared when you meet with investors, but that doesn’t mean you have to have all the answers. You are considering partnering with this investor for a reason, so even if they have a slightly different vision for the company’s future it may be worth considering. That doesn’t mean you should take the company in a direction you don’t feel comfortable with, but keep an open mind.
- Pretending there’s no competition. If your business doesn’t have competition now (and most do), you’ll have it soon enough if you’re successful. Own it and show investors why you’re different.
- Not being realistic: If you’ve ever watched the business pitch show Shark Tank, you know that one of the things the Sharks hate is when a business owner overestimates their target market, and thinks everyone will want their product. Optimism is great, but you should be able to ground your financial projections, valuations, company strengths/weaknesses, competition etc. in reality, backed up with research you can defend.
- Not doing your research: While your pitch deck and your pitch won’t change dramatically, you can learn more about the investment firm so you can tailor your pitch, at least somewhat, to their interests. They will vet your offering, do your own due diligence on the investor.
Alternative Cash And Capital Solutions For Small Business Owners Who Don’t Want To Sell A Part of Their Company
The harsh reality is that most businesses don’t raise money from angel investors or venture capital firms. Some businesses simply aren’t exciting enough, or investors aren’t convinced there is a solid exit strategy.
You can spend a lot of time trying to raise funds when instead you may be better off getting your business off the ground. (That said, there are cases where particularly capital-intensive businesses need outside funding they can’t get from a bank.)
Here are some alternative sources of funding to consider:
Small Business Loans
A small business loan can provide the capital you need to launch or grow your business. Keep in mind that many types of small business financing require your business to earn a certain amount of revenue, and may require that you’ve been in business for a year or more. (Startup loans offer more limited options, but they do exist.)
Nav can help you find financing options based on your qualifications. Get started now.
Crowdfunding may be a viable alternative way to raise capital for your small business. The main types of crowdfunding are debt, equity, donation, and reward.
Equity crowdfunding in particular lets your business raise up to $5 million annual. With all types of crowdfunding you will likely need to get initial backers from people you know, and strong preparation is key.
Business Credit Cards
These are a popular form of financing for startups. Most business credit cards will look at the owner’s personal credit scores and income from all sources (not just the business) which means they can be available to brand new businesses. Some business credit cards with 0% intro APRs for as much as a year or longer can be a source of startup capital. (But these cards also carry a personal guarantee so be careful not to run up debt you can’t repay.)
Small Business Grants
These are particularly appealing because they can bring cash into your business without having to give up ownership, or even worry about paying the money back. But, in part because small business grants are so appealing, they are very hard to get, especially for brand news businesses.
3 Winning Pitch Deck Template Examples
Here are three sources of inspiration if you’re looking to create a winning pitch deck. Each of these companies featuring these templates also offer tools for creating a winning pitch deck.
1. Airbnb’s Pitch Deck
Slidebean shares the original Airbnb slide deck template, updated to look more modern using Slidebean’s tools. It also reviews each slide in depth to provide insights they believe would have made for an even stronger pitch.
2. Facebook’s Pitch Deck
DocSend shares pitch decks from several well-known companies, including Facebook’s Pitch Deck. However its Pitch Deck Analyzer only gives it a rating of 50%, meaning there was lots of room for improvement. For a higher rated pitch deck, see the Postmates pitch deck, which earns a 81% rating.
3. Buffer’s Pitch Deck
Pitchdeck.io shares Buffer’s Pitch Deck with an in-depth review and then reimagines it using their tools to make it even more appealing to prospective investors.
This article was originally written on October 4, 2023.