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Mar 23, 2020

How to Build the Investor Deck

An investor deck is not just a presentation and not a caprice from investors – it’s a chance to tell the story of your company– its origin, life adventures and future plans. In comparison to the pitch deck that you have prepared for pitching competitions or shows where the slides serve as support to your live presentation, an investor deck should speak on behalf of yourself and your company even before you meet the investor face-to-face. It should be realistic, clear, transparent, showing your dedication and belief in what you’re doing. Your attitude to the project should be visible from the very first slide. So, make sure you craft the right message.

You might also have one more type of presentation – a sales deck you share with your leads and potential customers. Hopefully, you understand the difference and address various stakeholders with the proper information.

Slides structure

When you start working on the investor deck, set up the structure first; it will outline your story and make it simpler to collect the necessary data.

We recommend using the following:

  1. Elevator pitch
  2. Problem / pain
  3. Product / solution
  4. Value-added to the customer
  5. Business Model
  6. Unique selling proposition / advantage
  7. Competitors
  8. Achievements / traction
  9. Market
  10. Unit economics
  11. Go-to-market strategy/user acquisition
  12. Team
  13. What are you asking for?

Now let’s dive deeper into each of these components.

0. Title

Start the slides with the “hello” slide – with your logo, name of the company, slogan/motto, and contact information in the footer. You may also add the geography where you operate, if that’s relevant and can clarify the area covered already or targeted by your company.

1. Elevator pitch

Name it elevator pitch, or project description or anything else – you should open the presentation with the explanation of what your startup is about. Short and clear (I will be repeating these words many times here because, unfortunately, many founders do not follow this rule), it can be like:

thefacebook pitch

 

mattermark pitch

2. Problem / pain

Who is your target? What real problem do they have? Don’t explain the problem too much, and don’t generalise, just show it’s painful and huge for investors to understand that it won’t be a one-time solution, but it will always be there, and it needs to be solved or improved somehow or it will get worse.

Do not try to just conceive the problem out of the thin air. This actually filters out the early stage startups very well, because truly ambitious projects can spring up only from the existing painful problem. Like, “we’ve been developing tech solutions for enterprise for many years and always faced the same problem at a particular stage of the project, so we decided to dive deeper, define the real problem and started looking for a universal solution.” That’s the story.

3. Product / solution

Now, this is a time to show off your product. Tell what it is, explain the core functionality, show the demo or mock-up, include the link to it and login information for test use.

Identify what stands behind your product – is it a web-application, an online platform, an application, API code or CRM and so on. It’s very important, hence sometimes we get investor decks with amazing words about the product, but in the end, we have no idea what exactly it is and how it works.

Yes, how it works is also crucial – explain, how the customer can use it, what’s needed for that. Can customers just download the app, sign up and enjoy the service? Should the company representative sign up for the 14-day trial to test it first? Or maybe you only need 2 months to integrate the solution into the companies’ CRM etc. Is it on the cloud or on-premise only? Let the reader “touch” your product, like in the usual market. You’re the seller, after all, you should show the product from all sides to make a good deal.

4. Value-added to the customer

As we say, You bring ideas – we create value. It’s not just a word game, but the core of our mindset. At bValue, we prefer companies that create real value to their customers and partners. You can use this slide for graphs and comparisons of how your customers lived before using your product – and after they got it.

Add some projections for the future as well, how you will tackle some greater challenges with the help of your project, or how you better the lives of people. But please stay realistic. We all want to feed the hungry in the whole world, and you, of course, can set that kind of goal to your company, but we’d like to see the proper steps on your way to this in the presentation. Every big global endeavor needs a detailed action plan and not just words.

5.Business model

Time to speak about your revenue-generating model – how and when do you charge your customers, from which sources do your money come? It’s even more interesting to the investors because here you show how exactly will you take on your part of the market. And that’s what they are coming for.
How to define the best-working business model for your particular case is a different story, though you should remember to focus on the maximum of 2 revenue streams at the beginning.
Clear vision, remember? That’s it.

There are dozens of business models in each industry. Once I found around 30 of them only for the game development companies. What do you have? A marketplace with a transaction fee and advertisement spots.
SaaS (software-as-a-service) with a monthly/quarterly/annually subscriptions. Selling a license for the product, or selling the product itself in the retail stores, or crafting and selling it on demand.
Maybe it will be a franchise model with a global expansion plan. Or just a simple freemium.

Again, make sure you did vast research in the industry and found your organic business model. Better if you even tried selling through it already and proved that it’s working for you.

6. USP / advantages & 7. Competitors

Previously, you showed the core functions of your product or service. Here you can talk about its features and unique traits. Try to answer the following questions:

– What unique does your technology have to compete with existing market players?
– Have you collected big datasets you can now analyze and use in a particular way to monetize and create value?
– Do you and your team obtain very valuable knowledge, skills or other assets that put your company above others?
– Do you have any other so-called unfair advantage you can leverage to bite the bigger piece of the market?
– Why are you better than your rivals?

Answer these questions while comparing to your competitors or just make it on 2 slides – that depends on the context.

A few tips for the competitors’ map for your investor deck:
– don’t pitch your competitors, just show you know who they are, add the links to their webpages and show where you stand in comparison to them;
– make sure you identified the markets where your product is correct! Don’t try to compare your software solution with existing old-fashioned physical ways of doing anything, it’s obvious that software is much better. Search for similar solutions in every category you touch, it may be at the same time markets for, i.e., mobile apps for food delivery, food delivery services, last-mile delivery services etc.

8. Achievements / traction

Display a timeline showing how far you have come with your company up to now. Has this slide updated monthly? Include your key numbers to illustrate traction.

iconis pitch

If you already have good traction and sales, just show the key figures, like the number of downloads, number of acquired customers, number of paid users, number of conversions, number of companies in the pipeline, churn rate and so forth.

Important here: make it clearly visible what was already achieved as well as your future projections. Unify information into one of the global currencies – USD or EUR, investors won’t waste their time on converting each and every one of your numbers.

Show your roadmap for conquering the world and include dates. Sometimes we get a very nice timeline with no year identified, so we have to guess when they did this and are going to do that.

9. Market

No use in just putting 3 circles with TAM, SAM and SOM you found somewhere on the web. Instead of that, work it out a bit better and propose the real numbers of how much customers are projected to pay for your product/service, and information why investors should invest in this particular market or even niche.

Some funds and angels prefer focusing on a very niche solution, as it’s their field of expertise and they see how to make it big. Others, on the contrary, do not believe in a narrowed target and will prefer to look at a company with a wider market. That’s your choice which investors you should pitch to. But you definitely need to make it clear (again) where you see your customer.

You noticed a growing trend in some of the markets and want to catch the moment? Share some information about it to show the attractive sides of your market.

10. Unit economics

You can skip this slide if it’s not relevant for your kind of product, or if you are still at a very early stage. For SaaS companies, for instance, some time is needed to calculate the right CAC (cost of customer acquisition), LTV (lifetime value of the customer) and other figures that talk more about their potential sales growth than anything else.

Just be careful with defining your units that will become a fundamental measurement for your projections. You can google all of the formulas and tips for that. Make sure to have this slide in your investor deck.

In case you ‘d like to know more about the unit economy and pricing policy, you can read the article of Leszek Orłowski.

11. Go-to-market strategy / user acquisition

Tell us about how you are going to reach out to your customer?
What tools will you use to raise brand awareness, sell the product and also permanently increase these sales?

Identify the distribution channels where relevant. Perhaps your product is already in top on the ProductHunt and it boosted your sales a lot, so what are you going to do with it next?

If you’re developing a mobile app, how will you use the stores to acquire customers? Via ads on other apps or via the web landing and other various PR campaigns?

Here you should explain how you see your customer persona, where they are, what they use, and how you will make them buy your product/service and – even more important – use it for a long time, or how you will make your outbound user flows continue repeatedly.

Avoid the mistake of putting here too many revenue streams or go-to-market strategies, prioritize the top ways for now, and explain what you will do after achieving the next milestone in sales or product development.

12. Team

It’s one of the most important parts of the presentation – the story about your team. But don’t overdo it, add information about the expertise and background of your core team (founding team). If you worked on other projects before, include this too.

To show the whole force, write basic info about the rest of your team, for example:
Design team: 3 full-time graphic designers, 1 freelance UX researcher, 1 part-time UI designer
Development team: 5 full-stack devs in Kyiv office, 4 part-time outsourced developers
Marketing team: 1 full-time PR manager, 1 full-time community manager, 1 part-time SMM manager, 3 freelance graphic designers, 1 freelance copywriter

If you have advisors, mentors, angel investors, corporate partners, and various locations – put it all here too. It helps to see how much you actually work on the company and how you grow it.

13. What are you asking for?

Final slide answers the question – so what?
If you send the investor deck to a fund, that means you’re looking either for money or for a valuable partnership. bValue is an operational fund, therefore we make a so-called smart investment, meaning that after closing the round, we start working with the team shoulder-to-shoulder, helping to open the office in Poland, hire people, finetune the marketing strategy, improve the communication and connect with the right partners.

But you should initially identify for yourself what you need now to make the great leap? How much are you looking for and how will you allocate the investment? What would be your runtime for this money? Will you fundraise the next round after that or are you looking for an exit next?

Do not wait for the offer from the fund – we offer smart money and that’s more than obvious. Better start from your ask.

Finally – design

Of course, we care about the context and meaning of your investor deck. But if you put in a little bit more effort and make the design look nice and clear – you will show how much you actually care about your company image. This is your first impression, make it stand out.

Too many elements on the slide, very small size of the text, screaming color contrast will not make that good impression. The slides order should also be correct as you’re telling the story and leading us to the final “Ask.” Here we just recommend a structure of the slides but you do not have to follow it as it is listed above, adapt it to your case.

 


Summary

Just to summarise shortly, remember that funds usually get dozens of decks per day, so your offer should be really to the point, clear and attractive. Make investors believe in your product and trust your team. Explain why the investor just has to invest right now into this or that market. Invite to further dialogue, be open to negotiations and push-back, push all the time to make it work out. Good luck!

Have you already created your investor deck? Do not hesitate to send it to: pitch@bvalue.vc.

Alina Rozanova

Associate for CEE @ bValue VC

 

 

Slide examples pictures used from:

Venngage & Business Tuts Plus