Putting together a fundraising deck can bring on the pressure of having to share a great amount of information in a limited amount of time and space.Trying to balance granular details with really compelling your investors can be a challenge. However, with a clear understanding of your purpose, market, and plan, you can show investors exactly what they’re looking for while communicating your greater goals.
I spoke with Will Freeman, one of our Senior Delivery Managers, who has some pretty simple ways to make sure you’re including the right information—while still getting to the point and delivering exactly what potential investors actually want to hear.
When formulating your pitch, we suggest including the follow items:
As tempting as it may be to throw in every number that you have, you really want to keep it simple and quick for investors—It’s not a research paper! First, you need to start with the state of the world, or the state of your market. What are people really doing in your space already? Perhaps it’s a totally untapped market, in which case you can explore what that means for your company.
Next, you’ll want to explain what problem your software service solves; you’ll want to clearly communicate the value it provides. By outlining the problem, you demonstrate the need for a solution. Include a personal touch if needed.
You also want to explain why the problem exists. Is it a lack of knowledge? Lack of resources in the space? Or likely, somebody hasn’t come along yet to solve the problem. (Until you, of course!)
This brings you to explaining how you are positioned to solve the problem. You might need to be a little more imaginative if your market doesn’t exist yet. Share how a combination of your expertise and experience is suited to assist and address the needs of the current or new space. You also need to make sure that you show how your company is positioned to continue to solve problems the market changes. No market is truly stagnant, so you want to show that you are prepared to address the problem and provide the solution every step of the way.
Finally, you need to show why you’re the one to do it. There are likely other people who are trying to do the same thing—be sure to show what’s different and groundbreaking to your approach.
A well-formulated and detailed pitch should concisely tell the story of your business. It’s crucial, however, that you can support your claims with data and numbers. You want to show the metrics that demonstrate success and stability, as well as your understanding of the challenges you are facing and will face.
You’re likely wondering: how can you show data in the early stages if you don’t have a real world of numbers? The answer relies on you showing what you have so far and proving your research.
Potential investors want to know that a) you understand who you’ll be selling to, b) you know how to sell to them, and c) there is a market with a need that you will be solving for.
You’ll have to show some specific unit economic metrics as well.
You and your investors both know that your service does not exist in a vacuum. Do your homework, and be prepared to analyze what the competitive landscape is. Investors want to see that you not only understand what is going on in the market, but also that you’re being realistic and understand the challenges.
Additionally, you’ll want to include an appendix at the end. This is not something that you’re going to walk through with your investor; it’s simply going to be all of the math included to produce the conclusions you showed them. You’ll want to just get to the point in your presentation and then, if they want to, they can refer to all the numbers later.
Once you’ve explained your pitch and showed the numbers to back it up, you’ll want to show your targets. Your metrics should show that you’re actually trending towards industry standards. This is also where knowing the competitive landscape and industry standards comes into place! Show your investors you know how to build growth in a realistic way. Build slides and a supporting model to show not just how you’re going to start but how you’re going to continue to grow.
With actual numbers and a well-thought, coherent plan, investors can see you’ve deeply and carefully considered your market and service. If you haven’t thought about it enough to use actual numbers, they won’t consider it worth their time. You want to show what your road to profitability is.
Finally, while it may go without saying, make sure your presentation is engaging and aesthetically pleasing. Put a little love into your slides so your pitch doesn’t look thrown together:
We love this article from Crunchbase that breaks down and gives examples of great pitch decks, lackluster ones, and everything in between.
Overall, it’s really a delicate balance of maintaining interest, giving clearly detailed yet concise responses, having numbers and data to support your claims, and showing you’ve thought about your product at every angle. Your fundraising pitch is an opportunity for you to build this world for investors by showing a high-level business model to prove you have a unique idea for a problem worth solving. As with most things finance, it’s not just about the numbers; it’s about the story your business is telling.
Not sure where to start? We’ve helped dozens of customers calculate and aggregate the necessary metrics to prove their business value to investors. We’re no strangers to the fundraising process and materials, and would be happy to talk with you about any questions you might have, big or small. Let us know how we can help!