In venture capital, a pitch deck is a presentation that conveys the details of a business and the vision of a startup to investors with the aim of getting them to invest, contribute and advance the mission of that organisation.
A pitch deck is an opportunity to tell a story and create a lasting impression in the minds of the investor. Sometimes, it is the first impression that an investor might get of a business.
However, a pitch deck is not an opportunity to experiment and try new formats or reinvent the wheel. Your pitch deck should be non-identical and unique in its design, storytelling and representation but the format, outline and structure must follow standardised and acceptable patterns.
Before we examine what each slide in the deck ought to contain, we must begin by telling you how investors view your pitch decks.
How Investors view pitch decks
The mind is an interesting place and is the basis for decisions and the success of those decisions. In human and social interactions, it is important to use the power of psychology to outthink/think better than your peers by primarily asking one question. In this case, “what would this investor want to see?”
This is a profound statement. Why? It reviews every tone, line and slide in the pitch deck.
While investors have different goals, investors think of three major elements.
The business model, your traction and your unique selling point (USP).
As venture investors, we want to see what you have done. Ideas are mere imaginations and representations of your thoughts. Also, the idea itself may not be unique considering that investors hear and view a lot of pitch decks on a daily basis. Angel investors, for instance, can invest in an idea/startup at the very early stage, but every investor would love to see something that stands out in your approach; for instance, a minimum viable product (MVP), a customer’s traction, and the execution. Thus, it is advisable that a startup should not pitch or create a deck to convey a mere idea. Take the initiative to build something and you have a slightly higher chance of converting an investor into a believer.
A USP is a difference in how a startup executes an idea compared to its competitors, thus giving a fresh feel to the business and ultimately the way they solve the problems of that market. Every pitch deck must have that short, clear statement that activates a positive reaction in the mind of an investor that makes them want to invest in that business. Ultimately, every startup founder must take time to develop his USP, determine what makes their startup stand out, craft, sell and promote that proposition and pitch with the confidence that when questions are asked, the USP can be defended. Getting to this point is a long discovery. It takes time, research and many times, several years of building.
Lastly, the business model is what investors are eager to grasp. The question is “how do you make money and how can the funds we invest yield profits?” There is a huge responsibility for external investments and every business model must show this. It is not just about solving a problem that can change the world but also includes having a solution that ensures investors reap returns in the next few years.
The Structure of a pitch deck
- Introduction and cover slide
A pitch deck must have a well-curated intro. This is the opportunity to capture the attention of the investor for the rest of the presentation. It must contain a mission statement, an expressive design and your identity. The identity is the company’s brand.
2. Problem statement
This slide contains the status quo and pain points. This is the reality of the present state of the market and brings the thoughts of readers to a problem whose prevalence they might have been unaware of. It should also be used to create a sense of urgency and to demonstrate the market need for the company’s products or services.
3. The solution slide
The solution slide is used to capture the startup and its value proposition. It is ideal for listing three to four solutions that solve the issues raised in the problem statement. Here, the solutions must be presented in terms of profits and perks not necessarily as tech features.
4. The Demo slide
There can be slides that contain a demo of what has been built so far and where it is heading, especially for early-stage startups. For pitch decks, there can be a link to a 2-3 minute video on youtube or Vimeo to give a visual representation of the startup.
5. Market size
After the demo slide, the next few slides must inspire and brew into the minds of the investors, the opportunity to partake. It will contain the market size from a bottom-up or top-down approach. This slide should include data on market size, demographics and trends and should be used to demonstrate the market opportunity for the company’s product or service.
6 . Business model slide
The business model slide will win or bust a pitch. Investors want to see an attractive serviceable obtainable market and how you intend on making a business from this market. A startup is ultimately a business first, so investors want to see bold predictions that are realistic, accurate and reasoned.
7. Competitors slide
Every idea is a unique opportunity to stand out. The competitors should be mentioned, placed side by side and analysed giving reference to how the startup in question stands out.
The slide stresses the competitive advantage of the business model and value proposition.
8. Go-to-market slide
The go-to-market slide is how one desires to bring all this to fruition. A perfect idea must be capped with an even more ideal go-to-market strategy. It must be an innovative, well-thought-out marketing strategy to capture the serviceable market. In reality, these marketing strategies will not always go as planned but it is reasonable to predict in the pitch decks and update the strategy regularly. This slide shows the executing mindset. As mentioned earlier, ideas matter but execution matters more.
The startup should be willing to present a summary of its financials to show its past revenues and what the projected revenues for the business will look like when the requested funds are injected into the startup by the investors.
At the time of seeking funding, a lot of startups may not have not carried out proper valuations and may approach their pitch with an oversized valuation. This can be a turnoff for investors and it is advisable that the startup provides a valuation that is pragmatic, clear and discernible. The equity that will be given to the investors will be tied to the valuation and so it has to be something that the investors would consider adequately reflects the startup’s stage of growth.
The team must be displayed as this is the combination of the people that must be able to bring all that has been said to life. They must combine a wide range of experiences across marketing, product and technology and an executor usually referred to as the CEO.
This is what an ideal pitch deck should look like. Again, it must always have a flow, tell a story, let one slide lead to another and give an investor a good time listening or/and reading.
Ecosystem Dive with Nubia Capital
Silicon Valley Bank Crash –
Last week, the entire ecosystem was taken aback by the crash of Silicon Valley Bank, one of the largest banks in the United States known for partnering with startups, venture capitalists and the entire startup ecosystem to push innovation.
Our Managing Partner, Davidson Oturu has taken the initiative to pen his thoughts about this. You can refer to it here
Google for Startups Founders Fund –
We are always joyful with news of partnerships and collaboration to boost Africa and push innovation in our economy.
Google for Startups Black Founders Fund 2023 is now Open. This is an initiative by Google to partner with Africa for the provision of capital and resources necessary to build a prosperous and impactful continent. Introduced in 2021, founders all over Africa are using the funds to scale and build their solutions and express the potential of Africa
For this year, $4m dollars was dedicated to startups in Africa.
Check out more information here:
THE NUBIA WAY
Nubia Capital is dedicated to enriching Africa. We are now accepting pitch decks from growth-stage companies building in Africa.
Send pitches to email@example.com