You’re about to go in front of a prominent investor and deliver your pitch deck, but you’re not sure if you have all your ducks in a row. As you will have heard many times before, 90% of all startups fail. As daunting as it sounds, you could be looking at joining that 90% if you aren’t able to secure the funding needed to take your business to the next level. In a world of rising economic uncertainty, your pitch deck has become more crucial than ever.
Don’t fret. The fact that you’re even reading this blog is a good start, as it shows you are mindful of the problems you are likely to encounter when delivering your pitch deck. As Albert Einstein famously said, “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”
In other words, once you have worked out the likely mistakes you will encounter in your pitch deck you are at least halfway there.
To help you get there, I’ve put together a list of the top five pitch deck mistakes based on my extensive experience in fundraising advisory, presentation preparation, financial modeling, capital structure, and management consulting. Within these common mistakes, I also highlight pitch deck best practices and show you how to write a perfect pitch deck.
1. Failing to anticipate questions or feedback
An investor is unlikely to sit there and hear your pitch deck without having questions or feedback for you. If you aren’t prepared to answer the most fundamental questions associated with your pitch deck, then this will not put you in good stead with the potential investor.
This is where practice becomes key. Ideally, you would practice your pitch deck in front of colleagues, peers, friends, and family and seek their critical feedback. If you aren’t able to answer their questions on the spot, it’s likely you may struggle to answer similar questions under pressure in front of an investor. Bear in mind that an investor will want to see you think on your feet; they won’t want a deferred or delayed answer.
If an investor is asking you questions, it means they are likely engaged with the subject matter. Potential questions you can expect to hear from the investor include questions about your team and management, as well as questions about the market opportunity, financials and key metrics, the risks, the competition, how the investor’s money will be used, intellectual property, and so forth.
Even straightforward questions can trip you up if you aren’t prepared for them. As Penny Lee, a senior advisor at public affairs firm Venn Strategies and a member of the K Street Capital angel group explained, when her team asks a question as simple as “how can we be helpful to you?” many entrepreneurs end up standing there with a blank stare.
2. Providing unrealistic projections
This is another area where doing extensive homework will likely pay off in the long run. Investors don’t want to see outlandish and unrealistic evaluations where you are forecasting a multi-million dollar projection within the span of three years.
There appears to be nothing more frustrating for an investor than to see multi-million figures thrown in the air that are not based on any demonstrative evidence.
You also need to take into account all the factors that could affect your numbers in the long run. For example, it would be wise to take note of the identifiable risks and competition in the market (both existing and anticipated) so that you can provide more accurate projections to the investor.
At the end of the day, if you are projecting high-end figures, you will need to justify the numbers with evidence.
3. Not being able to tell a story
You need to sell your product but you need to do so in a clear and logical way. The easiest way to do this is to identify a problem. As American inventor Charles Kettering once aptly said, “A problem well stated is a problem half-solved.”
One of the first things you should be doing is pitching the problem to the investor, not the solution. Make the problem specific with the aim of getting the investor to agree that it is, in fact, a problem, and don’t try to solve too many problems at once. Be clear about the size of the problem, why the problem is important, and who you are solving the problem for.
Once the problem is established, you can then pitch your solution.
Thinking of the pitch in these simple terms will ultimately help you boil your business proposal down to the fundamentals, which will, in turn, enable you to clearly and coherently pitch the idea to an investor.
4. Failing to do your homework
The importance of doing your homework cannot be overstated. Your homework strategy must be all-encompassing. You can’t rely on the fact that you have a great business idea, a great team, a great structure, and growth potential. This will ultimately prove to be worthless if you are expending time, money, and energy delivering a pitch deck to a disinterested investor.
To begin with, you wouldn’t want to be pitching anything to an investor unless it is clear the business is in a space he is interested in. One Washington-based partner at the world’s largest venture capital firm also told the Washington Post that entrepreneurs would do well to research the type and size of investments the firm or investor has made in the past. Check out our Guide to What Investors Look For in a Startup for more on this.
Even sending an executive summary or business plan unsolicited to a potential investor is generally seen as a no-no. Investors are inundated with an immeasurable amount of correspondence on a daily basis. Having a go-between of high standing (for example, a lawyer, investor, or colleague) to refer your work in the first place will likely get you further traction than if you go in alone.
5. Not having a professional pitch deck
Your pitch deck presentation needs to look professional. It should not look as though it was done by an amateur. This will entail that you have a strong, professional-looking design, organized content, good transitions, and presentable charts or graphs. The presentation should also not look as though you have merely plugged information into a template. Make it your own.
Presentation slides should not be text-heavy. In this respect, less will always be more. The presentation itself should not be overly long and would ideally be less than 15 slides. If an investor is interested in the business, there will always be a time and place to provide them with further information.
Thankfully, there are plenty of example templates online which you can refer to, including the pitch deck for Mint.com, a startup that eventually sold to Intuit for $170 million. You can also access a Google template, as well as Facebook’s original pitch deck from 2004. We’ve also compiled a list of tips from our network here on how to write a pitch deck: Experts’ Corner: Pitch Deck Tips for Fundraising Success.
If need be, hire a designer. It may cost money now (perhaps $300-500), but it will be a small amount to pay in the grand scheme of things if it gets you that deal you have been waiting for.
These are just five of the classic pitch deck mistakes that you are likely to encounter. However, avoiding these five key mistakes and preparing in advance for them will automatically put you in good stead.
Understanding the basics
A basic pitch deck should include a problem, market size, and solution or product page so that the audience can best understand exactly what you do and why this product/service is needed. It should also include a clear understanding of the business model and something that a lot of entrepreneurs forget - a Contact Us page with all the business’ information.
A pitch deck should be between 10-15 pages.
I send my clients a VC Outline and ask that they create a first draft presentation based on the order and content of the outline. Then, I review this draft and work with the entrepreneur to refine the deck until we are comfortable with the content. This method allows the entrepreneur to walk into an investor's office with full confidence of why every single word, picture, and chart is on each page.