Chapter 4: Pitch Deck Guidelines
Authors: Daniele Pistelli
Estimated reading time: 9 min
Whenever founders need to pitch their idea or company, either to potential investors or customers, they will rely on a pitch deck to make the presentation more effective. A pitch deck typically consists of 15-20 slides and is intended to showcase the company both from a qualitative and quantitative point of view, presenting:
- How the company intends to monetize from their idea
- The financial projections, the milestones and the investment needs
- The problem that the company or the product is tackling and how it will be solved
- The product, the target customers and the market, the competitive landscape and the go-to-market strategy
- The team that manages the operations in the company
- The vision and the mission of the company.
Problem & Solution
In this section, the founders need to outline the problem that has stimulated their minds and the solution they came up with. In the problem slide, it is cardinal to state how widespread the problem is in terms of sectors, industries, companies and individuals affected and why that problem has relevance in their lives.
Further focus should be put on what would be the issue if that challenge is not addressed. Moreover, it can be beneficial to the founders to showcase who you are solving the problem for, thus providing a very quick description of the potential benefited stakeholders and target customers.
On the solution slide, the founders have to explain how they believe their product can solve the problem. It is usually composed by a section focusing on which part of the challenge they are trying to address and a section aimed at comparing the proposed solution with those already existing in the market, highlighting the strengths and how their product will differentiate by its main competitors. The aim of this slide is not to provide a detailed description of the product or of the competitors (topics covered in Product and Market Analysis section), but rather to give an overview of the innovations and improvements that respond to the challenges in the market.
The next step is about the presentation of the target customers, starting from the definition of the market niche that the company aims and is able to reach due to its status quo and competitive advantage. Target customers need to be assessed on a qualitative basis, analysing their location, their attitude towards the problem and any behavioral trends which can drive future changes in the market. In this way, it is possible to quantitatively assess the target segment, obtaining a first estimation of the number of potential clients that can be served by the company, an estimation that will be presented in detail in the Market analysis section.
The value proposition helps all the stakeholders to understand how the product can benefit them. It differentiates itself from the solution, since the latter is mostly focused on how the product can solve the considered problem to customers, while the former is a broad description of all the advantages that the product can give to all the stakeholders. In order to deliver a powerful value proposition, the following 3 questions need to be answered:
- What do you do?
The answer has to cover what the audience needs to understand about the product, focusing on the customers’ needs, motivations and goals that can drive them to use what the founders are offering.
- What are the key benefits of your product?
In this answer, founders explain how they differentiate from other players in the market, by depicting what benefits the product can bring to the customers.
- How is your product unique or different from your competitors?
In this last answer, founders present to the audience the unique features that differentiate the product from other competitors, providing proof that it cannot be found anywhere else or at least that it has a competitive advantage.
Vision & Mission
The first slide is aimed at presenting how the company works and what are the long term objectives. It helps to align everyone to the same purpose, thus enhancing efficiency and productivity in the organization.
In particular, the Vision statement depicts what the company wants to become in the long run, shaping its identity and starting to generate branding for all the involved stakeholders.
On the other hand, the Mission statement describes what are the current operations and where the business is heading to, thus providing to potential investors and partners a view of the company’s short term objectives.
The business model is one of the most significant factors when it comes to selling the concept of the startup. It allows founders to prove that their startup does not only have a disruptive idea, but that they can also make money with it.
Investors want to understand and challenge your business model, thus this section includes information regarding the fashion by which the company is able to generate revenue, come up with a pricing strategy and create long-term value by acquiring and retaining customers.
This section is at the core of the presentation, because it provides a bridge between the qualitative presentation of company and product and the quantitative analysis that will be provided in the financial section.
The financial section of a pitch deck is the most quantitative part of the presentation. It has to include the projections for upcoming years (usually 3 to 5 years), the milestones for the selected time span and the investment needs.
In the financial projections, founders have to showcase the current situation and the potential burn rate (the rate at which the company is spending venture money for its operations and overhead costs). The estimates need to be realistic and mainly backed by logical assumptions that also need to be presented in the deck. It is advisable to develop conservative estimates for the revenue growth and apply a mid-to-worst case scenario for the development of operating and non-operating costs.
The milestones slide is about the future goals that the company wishes to achieve. It includes any information regarding early traction, strategic partnerships that have been created or that are expected, any technological development that the company plans to obtain and future funding needs.
The investment-need slide presents how much funding is required by the company to develop its operations and how the proceeds will be used. This section of the deck is also linked to the milestones section which presents the objectives to be reached through the financing.
Product and Market Analysis
In this section, based on previously conducted analysis, founders need to provide a qualitative description of the product, an assessment of the market and a brief introduction to the go-to-market strategy.
The first slide regards the product, with a detailed overview of its key features and how it differentiates itself from what is already on the market. It can be beneficial to the audience to present the product with images or videos that can help people to better comprehend how the product works and what are its main strengths. Moreover, founders should present the technology backbone, so if there are any intellectual property rights that can protect themselves from being copied by competitors and the milestones concerning the future development of the product.
Once having provided a detailed description of the product, it is time to move on to the market and competition analysis section. This section starts with a slide regarding the market analysis, in which founders provide a description of the relevant market and a further segmentation of the latter. Starting from the targeted niche, it is possible to estimate the market size, assessing the Total Addressable Market (TAM) and then restricting to the Service Addressable Market (SAM) and the Service Obtainable Market (SOM). The SOM is particularly important since it represents the potential market that the firm can reach by exploiting the current gap into the competitive forces in the market and their own resources and it is the measure that investors will probably look at in case of funding rounds.
The competitive analysis slide needs to present all the results obtained in the assessment of the competitive landscape. Therefore, it should depict all the potential contenders and then provide an evaluation of direct and indirect competitors through different instruments such as SWOT analysis or Performance Matrix, tools able to showcase in a more comprehensible way strengths and weaknesses of the competitors.
Next slide has to present the target segment obtained through a thorough analysis of the market and the competition. It is particularly relevant, because in this way the audience is able to understand which is the niche that the company is addressing .
The Go-To-Market (GTM) strategy slide is aimed at presenting to potential investors in which way the founders want to penetrate the market and obtain the desired position. The GTM strategy is a tactical plan regarding how the company plans to release and promote its product, and ultimately sell it to the targeted customer base. This slide is a summary of what has previously been assessed regarding the product, the target market and the target customers, but it also includes the marketing strategy and the definition of the marketing budget.
Especially for early-stage startups that cannot show past operative results, the team slide is essential, since investors love to allocate capital to companies backed by a very strong team that will be able to reach breakeven and start generating earnings as soon as possible.
In this section, every team member needs to be professionally presented, with a short description of its previous working experiences and academic background. If relevant, it might be beneficial to also include external partners or advisors so that founders can strengthen the credibility of the company.
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