When it comes to starting a new business, securing early investment can be the difference between failure and success. Of those that get in the door with an investor, only a handful succeed in securing investment. A great business idea isn’t enough to generate the attention of investors. If you want to raise investment, it all begins with your pitch deck.
Many investors receive dozens of pitch decks every month. Even startups with a strong pitch deck may have a hard time getting seen. If you leverage it correctly, your pitch deck can be a great tool to secure investor meetings or strike an investment deal. In this post, we will discuss three ways to leverage your pitch deck to win over investors.
1. Use the right deck at the right time
Entrepreneurs often develop a single pitch deck and then use those slides for every application. But this isn't the best way to get investors' attention. The truth is, there are different types of pitch decks, and each has its own benefits at each point of the fundraising process.
Presentation decks are often short in length with large text, lots of bullet points and heavy graphics. Their function is to support the presenter. In this case, the presenter is the star of the show and the pitch deck is the supporting cast - giving context to the pitch while the presenter delves into the fine detail.
Introductory decks are best used when introducing a business to an investor through email. Since there is no presenter, the pitch deck itself is the star of the show. In this situation, the pitch deck has to provide the specifics and it generally includes a greater number of slides and more text per slide. The font size is generally a bit smaller and each slide provides enough content to properly get the message across.
Competition decks are typically the shortest type of pitch deck. Usually, competitions will have a time limit (3-5 minutes) and the pitch deck will need to support a much shorter pitch length.
2. Carefully tailor your deck
Pitch decks are not static documents. An experienced venture capitalist firm will expect a largely different pitch than a first-time angel investor. The more that you know about your audience, the better you will be able to leverage your pitch deck and play to the strengths of your startup.
Before sending your pitch deck off, investigate the person you're sending it to. Identify the different types of businesses that they have invested in previously. Look for patterns in the investments they have made previously. Find out what they value, and tailor your pitch deck around those focus points. Investors take notice when you go above and beyond to learn what is important to them. Not only does it personalize your pitch, but it also shows them that you are a tenacious entrepreneur who will go the distance to succeed.
If you find that the investor has invested in several pre-revenue businesses, for example, focus on showcasing user growth in your pitch deck. Not every investor is the same, and your approach should directly align with the desires of your audience.
3. Prepare for potential objections
Every pitch will meet some level of investor objection. By default, startups and SMEs may not have the level of validation that established businesses do. Therefore, investors will likely bring up certain weaknesses in a business before deciding to invest - and if you want to strike a deal, you should be prepared to address each objection.
The best way to address these objections is to build them into the pitch deck. The obvious benefit of doing so is being able to answer the investor’s objections before they voice it themselves. The second, and most important benefit, however, is that it shows investors that you can objectively identify weaknesses and that you have addressed them with a plan of action.
Choose the most important objections to address and make sure that after an investor views your deck, they are left with an eagerness to learn more, rather than concerns of the risks.
A potential investor shouldn’t be the first person to view your pitch deck. Before sending it out to angels and VCs, put your deck through several checkpoints with others. First, critique it with your team and try to identify potential questions that an investor may have after viewing it. Then, send it to family and friends, ask them what questions come to mind after they have read it. Finally, send your pitch deck to your advisors. As you go through each level of objections, modify your pitch deck to address the most important ones.
Whilst you're looking into investment options, it's also worth taking a quick look at the alternative finance options currently available to UK SMEs, such as invoice financing, merchant cash advances and small business loans. Using a combination of angel investment or venture capital with alternative finance could provide your small business with the boost it needs to grow and thrive. For more information, take a look at this start up guide to business funding for information about the main funding options currently available to start up founders across the UK.
About the Author
Mike Sims is the owner and founder of ThinkLions; a team of app developers and business plan writers that have helped dozens of startups bring their technology to life. With a background in business development and marketing, Mike works closely with entrepreneurs around the world, consulting them through challenging situations and identifying valuable strategic opportunities to advance their businesses.